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On February 15 2021 16:20 Acrofales wrote:Show nested quote +On February 15 2021 05:48 L_Master wrote:On February 15 2021 02:26 Simberto wrote: The mechanism against that is that bitcoin does not actually do anything. It is valuable because people think it will become more valuable. This can theoretically keep going forever, but it can also just randomly crash and suddenly be worthless.
But it could also continue rising forever, and your scenario could happen. Bitcoin is a really strange thing, because it is not actually connected to anything real whatsoever. Even gold has some uses, bitcoin is a currency which is pretty shitty at being a currency, but which becomes more valuable because a lot of people think it will become more valuable. In older times, when it became adopted gold had zero use. Only with industrial age did gold gain any sort of a use case. This holds true for diamonds, emeralds, etc. Things have value for one reason and one reason alone...people want them. In the event of an extinction level collapse event the value of gold would go to zero. All value would go to food, water, perhaps shelter, and other useful for survival items. With a little more prosperity, people start to care about other things. People started to care about gold both because governments started using it to take tokens, and because it was an ornament that was rare and symbol of wealth. Over time, value shifted heavily to "it's rare, and takes lots of effort and energy to get even small quantities of", and then finally we actually got a few use cases for gold in practical applications. Guess what else is a symbol of wealth, is the abstract representation of scarcity itself, and takes significant energy to get even a small quantity? Ah. BTC. But ultimately, most of golds value is because people desire it, and believe that it stores value well. And so, self fulfilling prophecy, it has stored value reasonably well. Now for BTC....its literally better at being gold than...well...gold. Its non inflationary, its highly secure and cannot be taken away from you the way gold could by a government or authority, it can be transmitted instantly and with no energy over massive distances, etc. Did I mention non-inflationary unlike gold? On a fundamental level BTC vastly trumps gold. The only question becomes one of psychology, which is basically something like "Will people eventually see this abstract concept the same as a 'thing' like gold that is easier to understand?". The answer is "probably, but who knows" with a side of "it doesn't matter because the smarter ones (which includes nearly all rich and institutions) will understand this, and they control 99% of the value in the world. BTC/Crypto can be a 300T asset class even if 99% of the people have no idea what it is. Not true. Gold is pretty and shiny. It's also easy to shape, so primitive societies could easily make pretty things of it. The idea of gold underlying currencies while having no uses is nonsense, as gold was highly valued for being shiny and pretty long before it was used to underwrite various currencies. Precious stones are valuable for similar reasons. People pay top dollar for pretty, shiny things! Always have, and probably always will. Given that a Mad Max dystopia will still have people whose basic needs are met, there will still be a market for luxury items, and gold will remain precious. I don't see any reason why bitcoin should.
This is accurate. BTC while obviously more antifragile than gold in most situations is less extreme collapse resistant than precious metals. That said, if you're in a mad max type situation with total collapse back to pre-industrial era you probably have bigger problems.
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On February 15 2021 18:22 evilfatsh1t wrote:Show nested quote +On February 15 2021 07:54 L_Master wrote:On February 15 2021 07:27 Vivax wrote:
What else then? Everyone used precious metal coins historically, then they got replaced with promissory notes. The current currency isn't even equivalent to those. You can't just go to your central bank and turn it in for an equivalent.
Maybe you think in terms of mad max style scenarios and even then, what would you store value in that you can carry easily and isn't easily produced after gasoline, water, food, weapons?
When speaking of collapse I rather think in terms of market prices going bonkers for everyday things or having trouble finding things to buy (infl. vs deflation which we don't know what it's going to be) and nobody having any clue about the pricing of things they were used to. I'd have to go to a producer or middleman for the things I need and skip the step of paying with currency, offering something else in return.
Yes, true collapse "Mad Max" type scenarios are likely the degree required for gold to cease having value to most people. In a true Mad Max scenario, I don't think you're worried about storing value, you're probably worried about surviving. Any extra energy you get, you're storing in water/food stockpiles/investing in crops/etc. Deflation? Under what world are you going to expand the monetary supply by 75% in a year, combined with less productivity and overall goods/services/energy and get deflation? The only way this happens is if people "HODL" money to an incredible, never before seen degree. The far more likely outcome is as the pandemic restrictions relax and things look more normal people start spending more and then the inflation really kicks in. In terms of collapse, people definitely don't have a clue where to put money right now, that's for sure. Dogecoin, pokemon/magic cards/cars/housing/stock price/GME/AMC all are up absurdely. Tons of money flowing that obviously has no clue where it wants to go. On February 15 2021 07:27 Vivax wrote:+ Show Spoiler +On February 15 2021 07:06 L_Master wrote:Show nested quote +On February 15 2021 06:01 Vivax wrote:On February 15 2021 05:34 L_Master wrote:On February 15 2021 02:09 Uldridge wrote: Am I stupid for thinking a set amount of bitcoin is some kind of magic thing? If anything, instead of inflation, it'll just make a single bitcoin over time more and more valuable. You'll have scenario's where instead of now, where you'd need to pay 10000000 USD to buy a random car due to hyper inflation, you'll need to pay 0.000002 BTC to buy the same car. Or are prices to be stabilized at a certain point due to the fact of a set amount?
The year is 2050, and to be a millionair, all you need is a singular bitcoin...
This is correct, at least in the mass adoption case. The number of BTC maps to a certain underlying amount of goods/services/energy. As this underlying amount of goods/energy increases then the value of one BTC increases (assuming large scale adoption). I don't think it has any underlying. It's a tulip of modern times. Consume energy to complete a mathematical operation, there's your bitcoin. Then there's alt coins as well, so it isn't even a one of a kind thing. It's also unclear who the early buyers were, but looking at the hype probably not small fries. Yes, and gold is consumer energy to get a bar of (until recently) useless metal out of the ground. What I really want to clarify though is I'm NOT saying BTC has any underlying inherent value. Not at all. What I mean by the mapping concept is that money, fundamentally, is energy. It's a way of storing and channeling energy. So, if you look at say the US economy, there are a certain number of dollars that map to a certain amount of underlying goods/services/energy, and the (circulating) supply of those dollars mapping to those goods determines the purchasing power, the value. If you have the same amount of goods/services/energy consumption, and then circulating supply of the money increases by 100%, then the value of that money will fall by 100% (although not in a uniform matter, because inflation is not a scalar quantity, but rather a vector field). So in the hypothetical example above where BTC becomes the dominant asset for "SoV" category, then 21 million BTC will map towards the goods/services/energy of the entire world. If the world economy (goods/services/energy) grows, it still maps to the same 21 million BTC, and thus the purchasing power of BTC rises with time. ^ The above is what I mean by "underlying value". --------- Tulips, in the 1600s, had no more use than gold. They were a situationally rare collectors item, with some aesthetic value to most people. Very analogous to gold at that time. More fundamentally, I think the idea of intrinsic value is generally a silly one that is in constant flux over time. We can take various examples: - Most would say a computer has intrinsic value. If the world suddenly had an energy crisis and modern electrical infrastructure broke, would the computer have any value to anyone? Probably not. - Oil? Lots of people would say that has intrinsic value because it's a massive amount of stored energy. Transport you back 1,000 years with no modern technology and would your oil have any value? Probably not. Nobody had a structure or device to use it. The only thing in my mind that comes close to having intrinsic value are literal survival items: food, water, shelter in most climates, clothing in many climates. You can *probably* guarantee that in all situations those things have value. For all other items, its very easy to come up with situations where those things might not have value. The existence of numerous things with no obvious use case/inherent value that are nevertheless worth significant amounts of money should make it obvious that something doesn't need "intrinsic value" to have value. Tulips had significant value for a short period of time. After that period of time, people collectively decided they had almost no value. Other things, like gold, initially had no value; but conditions led to people deciding they had value and that value has been maintained over thousands of years. Moreover, there is an intelligence tax that happens here. The smarter you are, the more quickly and easily you recognize that Crypto (and specifcally BTC at the moment) is better at being gold than gold itself. In time, you explain this to others and they come to recognize this as well, until it becomes common knowledge with the smartest people having been the first to market. I understood the confusion in say....2015 or even 2018 about whether BTC = gold is correct or whether BTC = tulips is correct. I'd even argue it was still up for debate. That issue went from uncertain to strongly in favor of "BTC = gold" over the latter half of 2021. It started with MicroStrategy investing in September, then continued with Saylor's promotion to other institutions, and has become heavily solidified over the past 6 months with much of the upwards price pressure being driven by large institutional buyers. These are widely understood not to be speculative hedge fund investments, but corporations converting a portion of treasury assets or excess capital into BTC. Why? Because inflation is starting to pick up, the dollar is looking pretty fucked, interest rates are near 0%, the market is comically overinflated, gold doesn't give great returns and is inflationary, and that leaves you with.....BTC. If you're in the old room (dollars/fiat) and someone is sucking 15% of the air out per year you have two choices: 1) Stay in the room and face certain death (Savings/Bonds/Fiat) 2) Go through the strange, uncertain but promising door labeled Oxygen (BTC) I'll let you guess which choice many institutions are now making. Gold is a guarantee that the store of value isn't something easily replicated, given by its natural limits. Bitcoin promises to do the same since it also has natural limits but it lacks being singular. If any other coin preceded bitcoin and were equally marketed, we'd probably be talking about that one instead. If bitcoin is established by convention, then it can be used as an equivalent to gold, but the question is, who were the early buyers? And why wouldn't it face the same obstacles of gold from when it was the backing of currency (which meant forced deflation when hitting the limits). Not if it didn't have the same properties of BTC. There have been hundreds of other coins, and in the category "Store of Value" BTC is the dominant winner over hundreds of evolutionary iterations. "Store of Value" happens to be by FAR the most valuable property of money, and is why BTC, and not others, has the greatest marketshare. It's possible another coin, with superior properties, could come along and replace BTC. This again is the "BTC = myspace" case, which is no the improbable case. BTC = Facebook is the more likely case. It's won out over hundreds of competitors over a span of a decade, and is continue to grow. It's also where ALL of the non-speculative institutional money is going because it's the "SoV" category winner. All of this capital and those investing have every incentive to ensure BTC remains as the category lead. A different coin rising to prominence in the SoV category is a HUGE threat to the argument that BTC = superior gold, and it likely to be stopped....in exactly the same manner a competitor to Amazon is unlikely to be allowed to exist. Obviously, none of this is guaranteed. BTC may not be the winner in 20 years. Risk exists in all things. However, if you asked me to give an intuitive sense of the probability, I'd say well over 70% that BTC remains the dominant "SoV" coin winner, and well over 30% that BTC ends up eating a significant fraction of the economy. i dunno why you keep arguing that bitcoin is a good store of value. it just isnt. looking at the past few years as a trend and equating that to bitcoin being a good store of value is a foolish analysis. elon musk could literally tweet "bitcoin is worthless! stop investing!" and bitcoins price would plummet like a rock. with that kind of volatility theres no way anyone could legitimately think its a solid store of value. if you invest in bitcoin now because you dont know where to put your cash, it is still no different to gambling since youre taking the odds that people are dumb enough to think bitcoin is valuable (although i would admit those odds are pretty good). your comparison of bitcoin to gold is also absurd. the implication that gold doesnt have intrinsic value is incorrect and its also one of the key factors in why bitcoin cannot be a good store of value. bitcoin is taken over the other coins simply because it was the first cryptocurrency. the most well known. the "original".
If you think something needs "intrinsic value" (which is a hypothetical construct anyway) then you definitely dont get it yet.
Things have value for one reason only, they are desired by people. You kind of, correctly, identify BTC needs a social contract similar to gold or fiat or anything else people agree has value.
Your argument that BTC is dominant exclusively because it was first is silly. First mover effects are real. So are network effects. But your argument is "BTC was first, and first = guaranteed winner". This is not how the world works. MySpace was first. How is that looking now? IE was before google. Hows that looking? On the other hand, BTC is proven over a decade against hundreds of opponents.
As said before, it's more probable BTC is Facebook than it is BTC being MySpace.
The rest of your stuff about Musk tweets and value is obviously something you haven't thought about much. It's accurate, but totally misunderstanding what's going on.
You're confusing fundamental properties and potential with present state and incorrectly assuming the present day situation predicts the future situation. Crypto volatile now does not mean crypto will be volatile in 10 years.
We are undergoing a monetary transition. Value is shifting in mass from other asset classes to crypto, which is going to eat a large fraction of of the economy. Anytime there are large value shifts there are a tremendous number of speculators, especially when the paradigm is new and uncertain. This results in rapid price fluctuations like you see because of the frenzy of the transition and moneymaking opportunities.
This will continue over time, constantly becoming less and less over time as the value transition settles out, and all the speculative "get rich fast" drys up as market cap is reached and everyone understands the game.
The people investing now are not investing because it's a stable SoV this very second. They are investing now because they correctly see that it will be in the future.
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On February 15 2021 23:40 L_Master wrote:Show nested quote +On February 15 2021 18:22 evilfatsh1t wrote:On February 15 2021 07:54 L_Master wrote:On February 15 2021 07:27 Vivax wrote:
What else then? Everyone used precious metal coins historically, then they got replaced with promissory notes. The current currency isn't even equivalent to those. You can't just go to your central bank and turn it in for an equivalent.
Maybe you think in terms of mad max style scenarios and even then, what would you store value in that you can carry easily and isn't easily produced after gasoline, water, food, weapons?
When speaking of collapse I rather think in terms of market prices going bonkers for everyday things or having trouble finding things to buy (infl. vs deflation which we don't know what it's going to be) and nobody having any clue about the pricing of things they were used to. I'd have to go to a producer or middleman for the things I need and skip the step of paying with currency, offering something else in return.
Yes, true collapse "Mad Max" type scenarios are likely the degree required for gold to cease having value to most people. In a true Mad Max scenario, I don't think you're worried about storing value, you're probably worried about surviving. Any extra energy you get, you're storing in water/food stockpiles/investing in crops/etc. Deflation? Under what world are you going to expand the monetary supply by 75% in a year, combined with less productivity and overall goods/services/energy and get deflation? The only way this happens is if people "HODL" money to an incredible, never before seen degree. The far more likely outcome is as the pandemic restrictions relax and things look more normal people start spending more and then the inflation really kicks in. In terms of collapse, people definitely don't have a clue where to put money right now, that's for sure. Dogecoin, pokemon/magic cards/cars/housing/stock price/GME/AMC all are up absurdely. Tons of money flowing that obviously has no clue where it wants to go. On February 15 2021 07:27 Vivax wrote:+ Show Spoiler +On February 15 2021 07:06 L_Master wrote:Show nested quote +On February 15 2021 06:01 Vivax wrote:On February 15 2021 05:34 L_Master wrote:On February 15 2021 02:09 Uldridge wrote: Am I stupid for thinking a set amount of bitcoin is some kind of magic thing? If anything, instead of inflation, it'll just make a single bitcoin over time more and more valuable. You'll have scenario's where instead of now, where you'd need to pay 10000000 USD to buy a random car due to hyper inflation, you'll need to pay 0.000002 BTC to buy the same car. Or are prices to be stabilized at a certain point due to the fact of a set amount?
The year is 2050, and to be a millionair, all you need is a singular bitcoin...
This is correct, at least in the mass adoption case. The number of BTC maps to a certain underlying amount of goods/services/energy. As this underlying amount of goods/energy increases then the value of one BTC increases (assuming large scale adoption). I don't think it has any underlying. It's a tulip of modern times. Consume energy to complete a mathematical operation, there's your bitcoin. Then there's alt coins as well, so it isn't even a one of a kind thing. It's also unclear who the early buyers were, but looking at the hype probably not small fries. Yes, and gold is consumer energy to get a bar of (until recently) useless metal out of the ground. What I really want to clarify though is I'm NOT saying BTC has any underlying inherent value. Not at all. What I mean by the mapping concept is that money, fundamentally, is energy. It's a way of storing and channeling energy. So, if you look at say the US economy, there are a certain number of dollars that map to a certain amount of underlying goods/services/energy, and the (circulating) supply of those dollars mapping to those goods determines the purchasing power, the value. If you have the same amount of goods/services/energy consumption, and then circulating supply of the money increases by 100%, then the value of that money will fall by 100% (although not in a uniform matter, because inflation is not a scalar quantity, but rather a vector field). So in the hypothetical example above where BTC becomes the dominant asset for "SoV" category, then 21 million BTC will map towards the goods/services/energy of the entire world. If the world economy (goods/services/energy) grows, it still maps to the same 21 million BTC, and thus the purchasing power of BTC rises with time. ^ The above is what I mean by "underlying value". --------- Tulips, in the 1600s, had no more use than gold. They were a situationally rare collectors item, with some aesthetic value to most people. Very analogous to gold at that time. More fundamentally, I think the idea of intrinsic value is generally a silly one that is in constant flux over time. We can take various examples: - Most would say a computer has intrinsic value. If the world suddenly had an energy crisis and modern electrical infrastructure broke, would the computer have any value to anyone? Probably not. - Oil? Lots of people would say that has intrinsic value because it's a massive amount of stored energy. Transport you back 1,000 years with no modern technology and would your oil have any value? Probably not. Nobody had a structure or device to use it. The only thing in my mind that comes close to having intrinsic value are literal survival items: food, water, shelter in most climates, clothing in many climates. You can *probably* guarantee that in all situations those things have value. For all other items, its very easy to come up with situations where those things might not have value. The existence of numerous things with no obvious use case/inherent value that are nevertheless worth significant amounts of money should make it obvious that something doesn't need "intrinsic value" to have value. Tulips had significant value for a short period of time. After that period of time, people collectively decided they had almost no value. Other things, like gold, initially had no value; but conditions led to people deciding they had value and that value has been maintained over thousands of years. Moreover, there is an intelligence tax that happens here. The smarter you are, the more quickly and easily you recognize that Crypto (and specifcally BTC at the moment) is better at being gold than gold itself. In time, you explain this to others and they come to recognize this as well, until it becomes common knowledge with the smartest people having been the first to market. I understood the confusion in say....2015 or even 2018 about whether BTC = gold is correct or whether BTC = tulips is correct. I'd even argue it was still up for debate. That issue went from uncertain to strongly in favor of "BTC = gold" over the latter half of 2021. It started with MicroStrategy investing in September, then continued with Saylor's promotion to other institutions, and has become heavily solidified over the past 6 months with much of the upwards price pressure being driven by large institutional buyers. These are widely understood not to be speculative hedge fund investments, but corporations converting a portion of treasury assets or excess capital into BTC. Why? Because inflation is starting to pick up, the dollar is looking pretty fucked, interest rates are near 0%, the market is comically overinflated, gold doesn't give great returns and is inflationary, and that leaves you with.....BTC. If you're in the old room (dollars/fiat) and someone is sucking 15% of the air out per year you have two choices: 1) Stay in the room and face certain death (Savings/Bonds/Fiat) 2) Go through the strange, uncertain but promising door labeled Oxygen (BTC) I'll let you guess which choice many institutions are now making. Gold is a guarantee that the store of value isn't something easily replicated, given by its natural limits. Bitcoin promises to do the same since it also has natural limits but it lacks being singular. If any other coin preceded bitcoin and were equally marketed, we'd probably be talking about that one instead. If bitcoin is established by convention, then it can be used as an equivalent to gold, but the question is, who were the early buyers? And why wouldn't it face the same obstacles of gold from when it was the backing of currency (which meant forced deflation when hitting the limits). Not if it didn't have the same properties of BTC. There have been hundreds of other coins, and in the category "Store of Value" BTC is the dominant winner over hundreds of evolutionary iterations. "Store of Value" happens to be by FAR the most valuable property of money, and is why BTC, and not others, has the greatest marketshare. It's possible another coin, with superior properties, could come along and replace BTC. This again is the "BTC = myspace" case, which is no the improbable case. BTC = Facebook is the more likely case. It's won out over hundreds of competitors over a span of a decade, and is continue to grow. It's also where ALL of the non-speculative institutional money is going because it's the "SoV" category winner. All of this capital and those investing have every incentive to ensure BTC remains as the category lead. A different coin rising to prominence in the SoV category is a HUGE threat to the argument that BTC = superior gold, and it likely to be stopped....in exactly the same manner a competitor to Amazon is unlikely to be allowed to exist. Obviously, none of this is guaranteed. BTC may not be the winner in 20 years. Risk exists in all things. However, if you asked me to give an intuitive sense of the probability, I'd say well over 70% that BTC remains the dominant "SoV" coin winner, and well over 30% that BTC ends up eating a significant fraction of the economy. i dunno why you keep arguing that bitcoin is a good store of value. it just isnt. looking at the past few years as a trend and equating that to bitcoin being a good store of value is a foolish analysis. elon musk could literally tweet "bitcoin is worthless! stop investing!" and bitcoins price would plummet like a rock. with that kind of volatility theres no way anyone could legitimately think its a solid store of value. if you invest in bitcoin now because you dont know where to put your cash, it is still no different to gambling since youre taking the odds that people are dumb enough to think bitcoin is valuable (although i would admit those odds are pretty good). your comparison of bitcoin to gold is also absurd. the implication that gold doesnt have intrinsic value is incorrect and its also one of the key factors in why bitcoin cannot be a good store of value. bitcoin is taken over the other coins simply because it was the first cryptocurrency. the most well known. the "original". If you think something needs "intrinsic value" (which is a hypothetical construct anyway) then you definitely dont get it yet. Things have value for one reason only, they are desired by people. You kind of, correctly, identify BTC needs a social contract similar to gold or fiat or anything else people agree has value. Your argument that BTC is dominant exclusively because it was first is silly. First mover effects are real. So are network effects. But your argument is "BTC was first, and first = guaranteed winner". This is not how the world works. MySpace was first. How is that looking now? IE was before google. Hows that looking? On the other hand, BTC is proven over a decade against hundreds of opponents. As said before, it's more probable BTC is Facebook than it is BTC being MySpace. The rest of your stuff about Musk tweets and value is obviously something you haven't thought about much. It's accurate, but totally misunderstanding what's going on. You're confusing fundamental properties and potential with present state and incorrectly assuming the present day situation predicts the future situation. Crypto volatile now does not mean crypto will be volatile in 10 years. We are undergoing a monetary transition. Value is shifting in mass from other asset classes to crypto, which is going to eat a large fraction of of the economy. Anytime there are large value shifts there are a tremendous number of speculators, especially when the paradigm is new and uncertain. This results in rapid price fluctuations like you see because of the frenzy of the transition and moneymaking opportunities. This will continue over time, constantly becoming less and less over time as the value transition settles out, and all the speculative "get rich fast" drys up as market cap is reached and everyone understands the game. The people investing now are not investing because it's a stable SoV this very second. They are investing now because they correctly see that it will be in the future. your simplification of how value is determined is the issue here. the driving factor in determining value isnt simply demand, its utility. utility and demand obviously have a correlation but utility is what gives us a baseline understanding of what something may be worth. if there is zero utility for a commodity then the intrinsic value is zero because its worthless to society. this is precisely why btc is a speculative asset. i dont understand how you think the current price of btc is reflective of its worth to society and therefore makes for a good sov. you even acknowledge that people putting money into btc are speculators. i mean yeah, btc could be a stable sov far in the future when its price has dropped back down to $500 because everyone realises theres no point holding it. but to think that the current price which is obviously massively inflated will hold is wishful thinking. your comparisons for btc to myspace or facebook are still absurd. there is practical benefit to using those platforms and facebook was objectively better at fulfilling its purpose than myspace was. btc does not have any significant practical use and is not fit for purpose, like with every other crypto"currency" currently out there. therefore when you cant significantly differentiate between the available options, people tend to go for the most popular/well known one.
most people investing into btc now are hoping to make a quick buck based on the prevailing trends that the price will continue to rise. the only game to be played with btc is how long you can profit from the bubble before the price randomly decides to tank. dont assume that because most people have decided to take a gamble on bitcoin, it is somehow indicative of well educated investors coming to the conclusion that btc is a good sov for the future. the fact is most people in stocks dont know what theyre doing. even more people meddling with btc dont know what theyre doing; theyre just on the bandwagon because why the hell not?
youre probably right that volatility in price will settle down as time goes on, but what makes you think that btc will maintain its current price point? you have no basis to claim that btc can maintain this price point for the forseeable future, which is the fundamental requirement of any sov. however there are so many reasons why the current price wont continue to hold. to refer to your myspace/facebook analogy for example, maybe one day a widely accepted version of a new crypto is introduced that actually satisfies the many tests for currency. good luck to anyone holding btc then.
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On February 15 2021 06:28 L_Master wrote:Show nested quote +On February 15 2021 06:20 micronesia wrote: I don't understand cryptocurrency much and am staying away from it. However, the thing that concerns me is that there is nothing to stop people from making bitcoin#2. Who controls stuff like that? With gold, there is only so much gold in the ground, and so much that can be accessed over the next X years. First mover effects, network effects. Practicality is also an issue. BTC itself cant be changed without 51% of mining power opting for a fork. From a game theoretic incentive structure, there is no reason to make a significant fork like that. Bitcoin already did fork back in 2017 with Bitcoin cash.Bitcoin cash fork created a larger block size so that more transactions per second were possible, which means cheaper transaction fees.
Now? BTC tx fee $20, BCH fee 0.02 (2 cents).Hence why Bitcoin fans call it digital gold, because its inefficient as a currency, you're just meant to hold it.Even if you own it you have to admit BTC has plenty of issues.
But I've already covered my view on Bitcoin quite thoroughly in the Bitcoin thread.
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On February 16 2021 20:08 iPlaY.NettleS wrote:Show nested quote +On February 15 2021 06:28 L_Master wrote:On February 15 2021 06:20 micronesia wrote: I don't understand cryptocurrency much and am staying away from it. However, the thing that concerns me is that there is nothing to stop people from making bitcoin#2. Who controls stuff like that? With gold, there is only so much gold in the ground, and so much that can be accessed over the next X years. First mover effects, network effects. Practicality is also an issue. BTC itself cant be changed without 51% of mining power opting for a fork. From a game theoretic incentive structure, there is no reason to make a significant fork like that. Bitcoin already did fork back in 2017 with Bitcoin cash.Bitcoin cash fork created a larger block size so that more transactions per second were possible, which means cheaper transaction fees. Now? BTC tx fee $20, BCH fee 0.02 (2 cents).Hence why Bitcoin fans call it digital gold, because its inefficient as a currency, you're just meant to hold it.Even if you own it you have to admit BTC has plenty of issues. But I've already covered my view on Bitcoin quite thoroughly in the Bitcoin thread.
BTC has issues. No question. Hugely problematic ones at present...probably not. Minor to medium ones that serve as inconveniences, absolutely.
I'm just not sure it matters. BCH has lower fees with the fork, but almost no marketshare. Why? Lacks the same SoV properties of BTC, first mover effect in favor of BTC, network effect in favor of BTC.
To clarify, the argument I'm making is NOT that bitcoin is some god tier new money.
The argument is that it's the current overwhelming favorite over the next decade, and also that it is highly likely to eat a large fraction of the economy...especially given the current trends and economic situations (massive stimulus, QE, etc.)
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On February 16 2021 16:03 evilfatsh1t wrote:Show nested quote +On February 15 2021 23:40 L_Master wrote:On February 15 2021 18:22 evilfatsh1t wrote:On February 15 2021 07:54 L_Master wrote:On February 15 2021 07:27 Vivax wrote:
What else then? Everyone used precious metal coins historically, then they got replaced with promissory notes. The current currency isn't even equivalent to those. You can't just go to your central bank and turn it in for an equivalent.
Maybe you think in terms of mad max style scenarios and even then, what would you store value in that you can carry easily and isn't easily produced after gasoline, water, food, weapons?
When speaking of collapse I rather think in terms of market prices going bonkers for everyday things or having trouble finding things to buy (infl. vs deflation which we don't know what it's going to be) and nobody having any clue about the pricing of things they were used to. I'd have to go to a producer or middleman for the things I need and skip the step of paying with currency, offering something else in return.
Yes, true collapse "Mad Max" type scenarios are likely the degree required for gold to cease having value to most people. In a true Mad Max scenario, I don't think you're worried about storing value, you're probably worried about surviving. Any extra energy you get, you're storing in water/food stockpiles/investing in crops/etc. Deflation? Under what world are you going to expand the monetary supply by 75% in a year, combined with less productivity and overall goods/services/energy and get deflation? The only way this happens is if people "HODL" money to an incredible, never before seen degree. The far more likely outcome is as the pandemic restrictions relax and things look more normal people start spending more and then the inflation really kicks in. In terms of collapse, people definitely don't have a clue where to put money right now, that's for sure. Dogecoin, pokemon/magic cards/cars/housing/stock price/GME/AMC all are up absurdely. Tons of money flowing that obviously has no clue where it wants to go. On February 15 2021 07:27 Vivax wrote:+ Show Spoiler +On February 15 2021 07:06 L_Master wrote:Show nested quote +On February 15 2021 06:01 Vivax wrote:On February 15 2021 05:34 L_Master wrote:On February 15 2021 02:09 Uldridge wrote: Am I stupid for thinking a set amount of bitcoin is some kind of magic thing? If anything, instead of inflation, it'll just make a single bitcoin over time more and more valuable. You'll have scenario's where instead of now, where you'd need to pay 10000000 USD to buy a random car due to hyper inflation, you'll need to pay 0.000002 BTC to buy the same car. Or are prices to be stabilized at a certain point due to the fact of a set amount?
The year is 2050, and to be a millionair, all you need is a singular bitcoin...
This is correct, at least in the mass adoption case. The number of BTC maps to a certain underlying amount of goods/services/energy. As this underlying amount of goods/energy increases then the value of one BTC increases (assuming large scale adoption). I don't think it has any underlying. It's a tulip of modern times. Consume energy to complete a mathematical operation, there's your bitcoin. Then there's alt coins as well, so it isn't even a one of a kind thing. It's also unclear who the early buyers were, but looking at the hype probably not small fries. Yes, and gold is consumer energy to get a bar of (until recently) useless metal out of the ground. What I really want to clarify though is I'm NOT saying BTC has any underlying inherent value. Not at all. What I mean by the mapping concept is that money, fundamentally, is energy. It's a way of storing and channeling energy. So, if you look at say the US economy, there are a certain number of dollars that map to a certain amount of underlying goods/services/energy, and the (circulating) supply of those dollars mapping to those goods determines the purchasing power, the value. If you have the same amount of goods/services/energy consumption, and then circulating supply of the money increases by 100%, then the value of that money will fall by 100% (although not in a uniform matter, because inflation is not a scalar quantity, but rather a vector field). So in the hypothetical example above where BTC becomes the dominant asset for "SoV" category, then 21 million BTC will map towards the goods/services/energy of the entire world. If the world economy (goods/services/energy) grows, it still maps to the same 21 million BTC, and thus the purchasing power of BTC rises with time. ^ The above is what I mean by "underlying value". --------- Tulips, in the 1600s, had no more use than gold. They were a situationally rare collectors item, with some aesthetic value to most people. Very analogous to gold at that time. More fundamentally, I think the idea of intrinsic value is generally a silly one that is in constant flux over time. We can take various examples: - Most would say a computer has intrinsic value. If the world suddenly had an energy crisis and modern electrical infrastructure broke, would the computer have any value to anyone? Probably not. - Oil? Lots of people would say that has intrinsic value because it's a massive amount of stored energy. Transport you back 1,000 years with no modern technology and would your oil have any value? Probably not. Nobody had a structure or device to use it. The only thing in my mind that comes close to having intrinsic value are literal survival items: food, water, shelter in most climates, clothing in many climates. You can *probably* guarantee that in all situations those things have value. For all other items, its very easy to come up with situations where those things might not have value. The existence of numerous things with no obvious use case/inherent value that are nevertheless worth significant amounts of money should make it obvious that something doesn't need "intrinsic value" to have value. Tulips had significant value for a short period of time. After that period of time, people collectively decided they had almost no value. Other things, like gold, initially had no value; but conditions led to people deciding they had value and that value has been maintained over thousands of years. Moreover, there is an intelligence tax that happens here. The smarter you are, the more quickly and easily you recognize that Crypto (and specifcally BTC at the moment) is better at being gold than gold itself. In time, you explain this to others and they come to recognize this as well, until it becomes common knowledge with the smartest people having been the first to market. I understood the confusion in say....2015 or even 2018 about whether BTC = gold is correct or whether BTC = tulips is correct. I'd even argue it was still up for debate. That issue went from uncertain to strongly in favor of "BTC = gold" over the latter half of 2021. It started with MicroStrategy investing in September, then continued with Saylor's promotion to other institutions, and has become heavily solidified over the past 6 months with much of the upwards price pressure being driven by large institutional buyers. These are widely understood not to be speculative hedge fund investments, but corporations converting a portion of treasury assets or excess capital into BTC. Why? Because inflation is starting to pick up, the dollar is looking pretty fucked, interest rates are near 0%, the market is comically overinflated, gold doesn't give great returns and is inflationary, and that leaves you with.....BTC. If you're in the old room (dollars/fiat) and someone is sucking 15% of the air out per year you have two choices: 1) Stay in the room and face certain death (Savings/Bonds/Fiat) 2) Go through the strange, uncertain but promising door labeled Oxygen (BTC) I'll let you guess which choice many institutions are now making. Gold is a guarantee that the store of value isn't something easily replicated, given by its natural limits. Bitcoin promises to do the same since it also has natural limits but it lacks being singular. If any other coin preceded bitcoin and were equally marketed, we'd probably be talking about that one instead. If bitcoin is established by convention, then it can be used as an equivalent to gold, but the question is, who were the early buyers? And why wouldn't it face the same obstacles of gold from when it was the backing of currency (which meant forced deflation when hitting the limits). Not if it didn't have the same properties of BTC. There have been hundreds of other coins, and in the category "Store of Value" BTC is the dominant winner over hundreds of evolutionary iterations. "Store of Value" happens to be by FAR the most valuable property of money, and is why BTC, and not others, has the greatest marketshare. It's possible another coin, with superior properties, could come along and replace BTC. This again is the "BTC = myspace" case, which is no the improbable case. BTC = Facebook is the more likely case. It's won out over hundreds of competitors over a span of a decade, and is continue to grow. It's also where ALL of the non-speculative institutional money is going because it's the "SoV" category winner. All of this capital and those investing have every incentive to ensure BTC remains as the category lead. A different coin rising to prominence in the SoV category is a HUGE threat to the argument that BTC = superior gold, and it likely to be stopped....in exactly the same manner a competitor to Amazon is unlikely to be allowed to exist. Obviously, none of this is guaranteed. BTC may not be the winner in 20 years. Risk exists in all things. However, if you asked me to give an intuitive sense of the probability, I'd say well over 70% that BTC remains the dominant "SoV" coin winner, and well over 30% that BTC ends up eating a significant fraction of the economy. i dunno why you keep arguing that bitcoin is a good store of value. it just isnt. looking at the past few years as a trend and equating that to bitcoin being a good store of value is a foolish analysis. elon musk could literally tweet "bitcoin is worthless! stop investing!" and bitcoins price would plummet like a rock. with that kind of volatility theres no way anyone could legitimately think its a solid store of value. if you invest in bitcoin now because you dont know where to put your cash, it is still no different to gambling since youre taking the odds that people are dumb enough to think bitcoin is valuable (although i would admit those odds are pretty good). your comparison of bitcoin to gold is also absurd. the implication that gold doesnt have intrinsic value is incorrect and its also one of the key factors in why bitcoin cannot be a good store of value. bitcoin is taken over the other coins simply because it was the first cryptocurrency. the most well known. the "original". If you think something needs "intrinsic value" (which is a hypothetical construct anyway) then you definitely dont get it yet. Things have value for one reason only, they are desired by people. You kind of, correctly, identify BTC needs a social contract similar to gold or fiat or anything else people agree has value. Your argument that BTC is dominant exclusively because it was first is silly. First mover effects are real. So are network effects. But your argument is "BTC was first, and first = guaranteed winner". This is not how the world works. MySpace was first. How is that looking now? IE was before google. Hows that looking? On the other hand, BTC is proven over a decade against hundreds of opponents. As said before, it's more probable BTC is Facebook than it is BTC being MySpace. The rest of your stuff about Musk tweets and value is obviously something you haven't thought about much. It's accurate, but totally misunderstanding what's going on. You're confusing fundamental properties and potential with present state and incorrectly assuming the present day situation predicts the future situation. Crypto volatile now does not mean crypto will be volatile in 10 years. We are undergoing a monetary transition. Value is shifting in mass from other asset classes to crypto, which is going to eat a large fraction of of the economy. Anytime there are large value shifts there are a tremendous number of speculators, especially when the paradigm is new and uncertain. This results in rapid price fluctuations like you see because of the frenzy of the transition and moneymaking opportunities. This will continue over time, constantly becoming less and less over time as the value transition settles out, and all the speculative "get rich fast" drys up as market cap is reached and everyone understands the game. The people investing now are not investing because it's a stable SoV this very second. They are investing now because they correctly see that it will be in the future. your simplification of how value is determined is the issue here. the driving factor in determining value isnt simply demand, its utility. utility and demand obviously have a correlation but utility is what gives us a baseline understanding of what something may be worth. if there is zero utility for a commodity then the intrinsic value is zero because its worthless to society. this is precisely why btc is a speculative asset. i dont understand how you think the current price of btc is reflective of its worth to society and therefore makes for a good sov. you even acknowledge that people putting money into btc are speculators. i mean yeah, btc could be a stable sov far in the future when its price has dropped back down to $500 because everyone realises theres no point holding it. but to think that the current price which is obviously massively inflated will hold is wishful thinking. your comparisons for btc to myspace or facebook are still absurd. there is practical benefit to using those platforms and facebook was objectively better at fulfilling its purpose than myspace was. btc does not have any significant practical use and is not fit for purpose, like with every other crypto"currency" currently out there. therefore when you cant significantly differentiate between the available options, people tend to go for the most popular/well known one. most people investing into btc now are hoping to make a quick buck based on the prevailing trends that the price will continue to rise. the only game to be played with btc is how long you can profit from the bubble before the price randomly decides to tank. dont assume that because most people have decided to take a gamble on bitcoin, it is somehow indicative of well educated investors coming to the conclusion that btc is a good sov for the future. the fact is most people in stocks dont know what theyre doing. even more people meddling with btc dont know what theyre doing; theyre just on the bandwagon because why the hell not? youre probably right that volatility in price will settle down as time goes on, but what makes you think that btc will maintain its current price point? you have no basis to claim that btc can maintain this price point for the forseeable future, which is the fundamental requirement of any sov. however there are so many reasons why the current price wont continue to hold. to refer to your myspace/facebook analogy for example, maybe one day a widely accepted version of a new crypto is introduced that actually satisfies the many tests for currency. good luck to anyone holding btc then.
Define what is meant here by utility. I think we will talk completely sideways otherwise, because I can think of many things that to me have zero utility, but plenty of value.
most people investing into btc now are hoping to make a quick buck based on the prevailing trends that the price will continue to rise. the only game to be played with btc is how long you can profit from the bubble before the price randomly decides to tank. dont assume that because most people have decided to take a gamble on bitcoin, it is somehow indicative of well educated investors coming to the conclusion that btc is a good sov for the future. the fact is most people in stocks dont know what theyre doing. even more people meddling with btc dont know what theyre doing; theyre just on the bandwagon because why the hell not?
Your claim could be technically true, but what I think you're actually meaning by your claim is demonstrably false.
In fact, it was recognizing that the opposite was true that moved me from a position of "BTC has some potential but going in on this is heavily speculative on the hope it's superior properties are recognized and it becomes a big player" to "BTC has a very high probability (over 90% in my mind) of eating a large fraction of the economy.". That took the mindset from "okay, if this blows up I could get really rich, but not sure the EV is that high" to "I don't think there is anything I can do that has a higher EV than going into BTC".
Let's talk about why the claim you made above is wrong, but let me start by clarifying that there absolutely IS a solid chunk of speculative investing in BTC. I agree completely. I'm sure that's the case for many retail investors. There are FAR more retail investors than there are institutional buyers, so it's very possible your statement is true that most people investing into BTC speculatively hoping to make a quick buck.
What I *think* you really mean by that statement however is:
Most of the value coming into BTC is speculative money from entities hoping to make a quick buck
This part is false.
dont assume that because most people have decided to take a gamble on bitcoin, it is somehow indicative of well educated investors coming to the conclusion that btc is a good sov for the future.
I'm not assuming. I know that it's the case that well educated institutions have come to the same conclusions I have, because I'm closely following who is investing into BTC. There are some, but it's not a heavy cohort of hedge funs that engage in a larger degree of speculation. It's heavily skewed towards instutional buyers converting balance sheets or using BTC as a long term treasury reserve asset. Why are they doing this? Inflation is starting to run rampant. The entire stock market is an absurd bubble. Interest rates are a joke. If you're burning your cash reserves at a rate of 15% per year, you don't just sit there holding cash. That money has to go somewhere. You could have gone to an oldschool hedge like gold or silver, but that's not happening now for the heads up players. They've recognized there exists something that does everything gold does...but better.
The drive in price for BTC from 25k - 40k was heavily driven by large scale institutions, and this is massively more true for 40k -> 50k. It's an abnormally large number of institutional players entering the game. These institutions are largely not composed of entities like hedge funds that might play a little more of the speculation game. Primarily, these institutions are respectable corporations that are investing in BTC as a treasury option, think: MicroStrategy, Tesla, Square, Galaxy Holdings, and then a variety of non-publicly traded entities. It's also known that MANY more corporations are in the process of figuring out how to convert a significant portion of their reserves or assets to BTC.
I don't think we've quite hit FOMO mode with publicly traded corporations, but for now that process is accelerating, and all signs suggest the government is going to double down on the conditions driving the shift.
There is nothing speculative when public corporations convert treasury assets or balance sheets to something like BTC. JP Morgan is looking to get involved, so are many others, and not in a speculative "get rich" way. It's a permanent, long term buy and hold investment move you would make with any other stable reserve asset.
Perhaps you don't recognize this yet, or have missed this shift that is happening. You'd have to be following it closely, which I started doing when it started raining lambos late 2020 and I was trying to figure out why in the hell it was raining lambos.
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On February 17 2021 07:14 L_Master wrote:Show nested quote +On February 16 2021 20:08 iPlaY.NettleS wrote:On February 15 2021 06:28 L_Master wrote:On February 15 2021 06:20 micronesia wrote: I don't understand cryptocurrency much and am staying away from it. However, the thing that concerns me is that there is nothing to stop people from making bitcoin#2. Who controls stuff like that? With gold, there is only so much gold in the ground, and so much that can be accessed over the next X years. First mover effects, network effects. Practicality is also an issue. BTC itself cant be changed without 51% of mining power opting for a fork. From a game theoretic incentive structure, there is no reason to make a significant fork like that. Bitcoin already did fork back in 2017 with Bitcoin cash.Bitcoin cash fork created a larger block size so that more transactions per second were possible, which means cheaper transaction fees. Now? BTC tx fee $20, BCH fee 0.02 (2 cents).Hence why Bitcoin fans call it digital gold, because its inefficient as a currency, you're just meant to hold it.Even if you own it you have to admit BTC has plenty of issues. But I've already covered my view on Bitcoin quite thoroughly in the Bitcoin thread. BTC has issues. No question. Hugely problematic ones at present...probably not. Minor to medium ones that serve as inconveniences, absolutely. I'm just not sure it matters. BCH has lower fees with the fork, but almost no marketshare. Why? Lacks the same SoV properties of BTC, first mover effect in favor of BTC, network effect in favor of BTC. In terms of daily transactions BCH has surpassed BTC.Ethereum has 4 times the transactions of BCH and Stellar around 14x.If i was looking to buy in I'd be wanting cryptos with the highest adoption and most transactions.But i like to think of cryptocurrencies as having use as a currency of trade.I'd be looking at Stellar or Dash.
https://www.statista.com/statistics/730838/number-of-daily-cryptocurrency-transactions-by-type/
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On February 17 2021 18:45 iPlaY.NettleS wrote:Show nested quote +On February 17 2021 07:14 L_Master wrote:On February 16 2021 20:08 iPlaY.NettleS wrote:On February 15 2021 06:28 L_Master wrote:On February 15 2021 06:20 micronesia wrote: I don't understand cryptocurrency much and am staying away from it. However, the thing that concerns me is that there is nothing to stop people from making bitcoin#2. Who controls stuff like that? With gold, there is only so much gold in the ground, and so much that can be accessed over the next X years. First mover effects, network effects. Practicality is also an issue. BTC itself cant be changed without 51% of mining power opting for a fork. From a game theoretic incentive structure, there is no reason to make a significant fork like that. Bitcoin already did fork back in 2017 with Bitcoin cash.Bitcoin cash fork created a larger block size so that more transactions per second were possible, which means cheaper transaction fees. Now? BTC tx fee $20, BCH fee 0.02 (2 cents).Hence why Bitcoin fans call it digital gold, because its inefficient as a currency, you're just meant to hold it.Even if you own it you have to admit BTC has plenty of issues. But I've already covered my view on Bitcoin quite thoroughly in the Bitcoin thread. BTC has issues. No question. Hugely problematic ones at present...probably not. Minor to medium ones that serve as inconveniences, absolutely. I'm just not sure it matters. BCH has lower fees with the fork, but almost no marketshare. Why? Lacks the same SoV properties of BTC, first mover effect in favor of BTC, network effect in favor of BTC. In terms of daily transactions BCH has surpassed BTC.Ethereum has 4 times the transactions of BCH and Stellar around 14x.If i was looking to buy in I'd be wanting cryptos with the highest adoption and most transactions.But i like to think of cryptocurrencies as having use as a currency of trade.I'd be looking at Stellar or Dash. https://www.statista.com/statistics/730838/number-of-daily-cryptocurrency-transactions-by-type/
Some cryptocurrencies will have use as a medium of exchange, no question. It would be nice if our "final" winner in the very long term has this property, and it's possible that the very long term winner outcompetes BTC by having the security and storage properties of BTC, with excellent medium of exchange properties.
That said, it bears repeating that medium of exchange/number of transactions is not the most valuable property of money. That goes to the store of value property of money.
If you're buying altcoins for speculation/timing related things (e.g. alt szns) then nothing wrong there. Something with lots of transactions and development is certainly interesting, and likely to go up in value. It's not, however, the most valuable or most stable property of money, so it's not as obvious of a long-term investment choice.
In my mind, if you're looking for good bets on other properties of money or reasons a coin would be valuable, then BCH is not your guy, which you identify in your post. It loses the best properties of BTC in exchange for some advantages that are done vastly better with other coins. Things like Solana, Rook, Hegic, BSC/BNB, and Cake are all much more interesting and likely in my mind to have much better EV.
Monero also seems to be the lead and most promising coin in the privacy realm, at least that I'm aware of.
If you're looking to invest in the typical set and forget way, then it's a clear choice for BTC on the 1-3 year time scale. As in my post above, BTC is the coin that all large corporations are moving to for treasury reserve assets and balance sheets. It's also, most importantly, the SoV category winner, having consistently crushed it's competition over and over. SoV is the most stable, and valuable, property of money.
For now, BTC is as solid as it gets for longer term park money and forget investing. I don't see myself moving off this view until I see solid, publicly traded institutions fleeing BTC either as a result of a low probability event like 51% attack, some SHA-256 weakness, etc. OR a blatant institutional (and ideally narrative ) shift away from BTC to another coin believed to be superior in the SoV category.
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The more that time goes on the more I wonder about when and not if there is some sort of international action on btc. I don't understand the long term view of a currency that has such structural issues with transaction cost and the very measurable environmental issues that btc is causing in its pre mass adoption phase.
Do you worry about these issues coming up or is there something I dont know about that will solve them?
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United States40772 Posts
On February 18 2021 01:03 Sermokala wrote: The more that time goes on the more I wonder about when and not if there is some sort of international action on btc. I don't understand the long term view of a currency that has such structural issues with transaction cost and the very measurable environmental issues that btc is causing in its pre mass adoption phase.
Do you worry about these issues coming up or is there something I dont know about that will solve them? Lightening network should resolve the transaction cost.
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On February 18 2021 01:03 Sermokala wrote: The more that time goes on the more I wonder about when and not if there is some sort of international action on btc. I don't understand the long term view of a currency that has such structural issues with transaction cost and the very measurable environmental issues that btc is causing in its pre mass adoption phase.
Do you worry about these issues coming up or is there something I dont know about that will solve them?
Am I worried about environmental issues in terms of risk to BTC as an investment? Absolutely not. Money doesn't really care about environmental concerns.
Do I worry about transaction speed? Not especially, because BTC is not a currency that will be used for high frequency exchange. BTC, in current form, will be used by most as an infrequent transfer, perhaps 1x or 2x a year. You take 1% of your bitcoin holdings -> exchange for local fiat -> spend from there for the year using paypal, banks, existing infrastructure.
Do I think that has potential environmental impact in a negative way? Sure. That seems reasonable, although it does come with some interesting possible upsides in poor areas, e.g. former areas that were difficult to colonize because they would need massive investment (especially those near running water due to hydroelectric having stellar EROEI) are now accessible in third world countries via setting up some mining rigs for BTC and then using that money to colonize or enrich the surrounding area.
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On February 18 2021 11:17 L_Master wrote:Show nested quote +On February 18 2021 01:03 Sermokala wrote: The more that time goes on the more I wonder about when and not if there is some sort of international action on btc. I don't understand the long term view of a currency that has such structural issues with transaction cost and the very measurable environmental issues that btc is causing in its pre mass adoption phase.
Do you worry about these issues coming up or is there something I dont know about that will solve them? Am I worried about environmental issues in terms of risk to BTC as an investment? Absolutely not. Money doesn't really care about environmental concerns. Do I worry about transaction speed? Not especially, because BTC is not a currency that will be used for high frequency exchange. BTC, in current form, will be used by most as an infrequent transfer, perhaps 1x or 2x a year. You take 1% of your bitcoin holdings -> exchange for local fiat -> spend from there for the year using paypal, banks, existing infrastructure. Do I think that has potential environmental impact in a negative way? Sure. That seems reasonable, although it does come with some interesting possible upsides in poor areas, e.g. former areas that were difficult to colonize because they would need massive investment (especially those near running water due to hydroelectric having stellar EROEI) are now accessible in third world countries via setting up some mining rigs for BTC and then using that money to colonize or enrich the surrounding area. Your use of the word colonize is cringe worthy. Also your idea that previously untouched natural areas will now be accessible to human exploitation because of bitcoin mining is, if true, an exceptional example of its anti-environmental nature and not the reverse.
The main problem with BTC's environmental impact is that it requires vast amounts of power and produces nothing at all. Is that worse than pumping all the nasty chemicals involved in gold mining into the environment? Maybe not, but at least once the gold is out of the ground, its reuse is almost infinite and free. BTC will require the computation to happen for forever.
There are very real uses of blockchain technology that use the computation for real advances in processes, making them safer and sometimes even more efficient. But BTC is essentially just a massive computation dump with no intrinsic value.
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On February 18 2021 17:56 Acrofales wrote:Show nested quote +On February 18 2021 11:17 L_Master wrote:On February 18 2021 01:03 Sermokala wrote: The more that time goes on the more I wonder about when and not if there is some sort of international action on btc. I don't understand the long term view of a currency that has such structural issues with transaction cost and the very measurable environmental issues that btc is causing in its pre mass adoption phase.
Do you worry about these issues coming up or is there something I dont know about that will solve them? Am I worried about environmental issues in terms of risk to BTC as an investment? Absolutely not. Money doesn't really care about environmental concerns. Do I worry about transaction speed? Not especially, because BTC is not a currency that will be used for high frequency exchange. BTC, in current form, will be used by most as an infrequent transfer, perhaps 1x or 2x a year. You take 1% of your bitcoin holdings -> exchange for local fiat -> spend from there for the year using paypal, banks, existing infrastructure. Do I think that has potential environmental impact in a negative way? Sure. That seems reasonable, although it does come with some interesting possible upsides in poor areas, e.g. former areas that were difficult to colonize because they would need massive investment (especially those near running water due to hydroelectric having stellar EROEI) are now accessible in third world countries via setting up some mining rigs for BTC and then using that money to colonize or enrich the surrounding area. Your use of the word colonize is cringe worthy. Also your idea that previously untouched natural areas will now be accessible to human exploitation because of bitcoin mining is, if true, an exceptional example of its anti-environmental nature and not the reverse. The main problem with BTC's environmental impact is that it requires vast amounts of power and produces nothing at all. Is that worse than pumping all the nasty chemicals involved in gold mining into the environment? Maybe not, but at least once the gold is out of the ground, its reuse is almost infinite and free. BTC will require the computation to happen for forever. There are very real uses of blockchain technology that use the computation for real advances in processes, making them safer and sometimes even more efficient. But BTC is essentially just a massive computation dump with no intrinsic value.
Having an alternative to governments inflating currency, therefore confiscating the money of their citizens at whim, is hardly a "massive computation dump" with "no intrinsic value"
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If a government inflates it's currency wouldn't bitcoin also inflate as people dump it into bitcoin?
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On February 19 2021 01:16 JumboJohnson wrote: If a government inflates it's currency wouldn't bitcoin also inflate as people dump it into bitcoin?
The idea is to have bitcoin before so that when it increases in price you aren't losing any value.
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Bitcoin as an investment hedge does make some sense, but all this "it's not beholden to any governments" nonsense is pure ideology that ignores the inevitability of transactions as a necessary precondition for liquidity. In other words, putting money into Bitcoin is only one side of the equation and pretending that "turning Bitcoin into ____" is something that can exist without government involvement is the stuff of fantasy.
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On February 19 2021 01:30 farvacola wrote: Bitcoin as an investment hedge does make some sense, but all this "it's not beholden to any governments" nonsense is pure ideology that ignores the inevitability of transactions as a necessary precondition for liquidity. In other words, putting money into Bitcoin is only one side of the equation and pretending that "turning Bitcoin into ____" is something that can exist without government involvement is the stuff of fantasy.
It can exist if everyone starts accepting bitcoin. "Turning bitcoin into ____" shouldn't be part of a persons dialogue if they truly believe in the value of BTC.
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Even if the magic premise of everyone accepting Bitcoin were to become true, there are tons of regulations that would govern transactions involving the exchange of Bitcoin for other things, regulations that would affect Bitcoin’s value and role as a currency in all sorts of ways. As to your last point, I’m not sure I understand. Value is a function of a variety of things, exchange and denomination being the two most prominent.
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On February 19 2021 02:37 ShoCkeyy wrote:Show nested quote +On February 19 2021 01:30 farvacola wrote: Bitcoin as an investment hedge does make some sense, but all this "it's not beholden to any governments" nonsense is pure ideology that ignores the inevitability of transactions as a necessary precondition for liquidity. In other words, putting money into Bitcoin is only one side of the equation and pretending that "turning Bitcoin into ____" is something that can exist without government involvement is the stuff of fantasy. It can exist if everyone starts accepting bitcoin. "Turning bitcoin into ____" shouldn't be part of a persons dialogue if they truly believe in the value of BTC.
As long as SOME countries (not even governments) accept BTC, it is a solid value store. It has all the gold properties except it's easier to trade and easier to "smuggle" if you have to.
If someone was making the argument gold is not valuable because you can't buy groceries with it, it would be called out as non sense. BTC is the same, it's not some replacement for quick cash, it's a value store.
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On February 18 2021 17:56 Acrofales wrote:Show nested quote +On February 18 2021 11:17 L_Master wrote:On February 18 2021 01:03 Sermokala wrote: The more that time goes on the more I wonder about when and not if there is some sort of international action on btc. I don't understand the long term view of a currency that has such structural issues with transaction cost and the very measurable environmental issues that btc is causing in its pre mass adoption phase.
Do you worry about these issues coming up or is there something I dont know about that will solve them? Am I worried about environmental issues in terms of risk to BTC as an investment? Absolutely not. Money doesn't really care about environmental concerns. Do I worry about transaction speed? Not especially, because BTC is not a currency that will be used for high frequency exchange. BTC, in current form, will be used by most as an infrequent transfer, perhaps 1x or 2x a year. You take 1% of your bitcoin holdings -> exchange for local fiat -> spend from there for the year using paypal, banks, existing infrastructure. Do I think that has potential environmental impact in a negative way? Sure. That seems reasonable, although it does come with some interesting possible upsides in poor areas, e.g. former areas that were difficult to colonize because they would need massive investment (especially those near running water due to hydroelectric having stellar EROEI) are now accessible in third world countries via setting up some mining rigs for BTC and then using that money to colonize or enrich the surrounding area. Your use of the word colonize is cringe worthy. Also your idea that previously untouched natural areas will now be accessible to human exploitation because of bitcoin mining is, if true, an exceptional example of its anti-environmental nature and not the reverse. The main problem with BTC's environmental impact is that it requires vast amounts of power and produces nothing at all. Is that worse than pumping all the nasty chemicals involved in gold mining into the environment? Maybe not, but at least once the gold is out of the ground, its reuse is almost infinite and free. BTC will require the computation to happen for forever. There are very real uses of blockchain technology that use the computation for real advances in processes, making them safer and sometimes even more efficient. But BTC is essentially just a massive computation dump with no intrinsic value.
This is just adding a little more clarity to my assertion that its dubious whether BTC is "good". No disagreement that it will have negative downsides, and I think it's more than possible it will be a net negative.
Seems very pedantic on "colonize", especially since you provided no context. If there is a good reason it's not pedantic and technically or meaningfully wrong usage, I'd welcome the clarification. My understanding of the word is that it means new settlers coming to an area previously uninhabited by humans and settling/living there.
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