Bitcoin Price Hits All-Time High of $19,786, Topping 2017 Record(wsj.com)
wsj.com
Bitcoin Price Hits All-Time High of $19,786, Topping 2017 Record
https://www.wsj.com/articles/bitcoin-hits-all-time-high-of-19-786-topping-record-from-december-2017-11606750573
261 comments
The resources consumed by Bitcoin should be compared with those consumed by other transaction-clearing and store-of-value methods. Credit-card companies consume a few percent of revenue for a large chunk of consumer transactions. Gold mining is an environmental catastrophe [1].
Bitcoin is far from perfect, but it is important to place it in context with other systems that achieve the same ends. As bitcoin-mining technology matures, it is increasingly reasonable to think about home-heating/data-furnace ways to make use of the waste heat.
[1] https://www.google.com/maps/place/Cripple+Creek,+CO/@38.7295...
Bitcoin is far from perfect, but it is important to place it in context with other systems that achieve the same ends. As bitcoin-mining technology matures, it is increasingly reasonable to think about home-heating/data-furnace ways to make use of the waste heat.
[1] https://www.google.com/maps/place/Cripple+Creek,+CO/@38.7295...
Energy consumption in the classical model is substantially lower because if you scaled up Bitcoin to the size of Visa alone it would exceed the amount of energy generated on earth a few times over and the amount of ewaste generated on earth too.
This is a classic pro Bitcoin argument that’s trivially falsifiable.
The fact folks here think their transactions in the online economy should heat their homes is so bananas to me. What is this, the industrial revolution? I mean, I know we’ve got our plague doctor masks on but that’s not intentional.
This is a classic pro Bitcoin argument that’s trivially falsifiable.
The fact folks here think their transactions in the online economy should heat their homes is so bananas to me. What is this, the industrial revolution? I mean, I know we’ve got our plague doctor masks on but that’s not intentional.
You're making two mistakes.
The first is that scaling Bitcoin up to the size of visa is not particularly possible. You might be able to match visa's throughput by greatly increasing the block interval (e.x. one block every week) but the protocol cannot reasonably scale past a couple hundred transactions per second without taking a massive hit to transaction latency. So, in this sense the question of how much energy Bitcoin would consume if you scaled it up is meaningless, it cannot be scaled up.
The second mistake is that Bitcoin's energy consumption has no relationship with its scale. Say you built a hypothetical MiniBitcoin which was exactly the same except each block was so small they could fit just one transaction, MiniBitcoin would consume almost exactly the same amount of energy as Bitcoin does now. The energy usage goes up as competition between miners increases. The energy usage does not go up as more transactions are processed.
The first is that scaling Bitcoin up to the size of visa is not particularly possible. You might be able to match visa's throughput by greatly increasing the block interval (e.x. one block every week) but the protocol cannot reasonably scale past a couple hundred transactions per second without taking a massive hit to transaction latency. So, in this sense the question of how much energy Bitcoin would consume if you scaled it up is meaningless, it cannot be scaled up.
The second mistake is that Bitcoin's energy consumption has no relationship with its scale. Say you built a hypothetical MiniBitcoin which was exactly the same except each block was so small they could fit just one transaction, MiniBitcoin would consume almost exactly the same amount of energy as Bitcoin does now. The energy usage goes up as competition between miners increases. The energy usage does not go up as more transactions are processed.
> The first is that scaling Bitcoin up to the size of visa is not particularly possible.
That’s no mistake, folks are suggesting that on a per transaction basis - today - Bitcoin is cheaper or more efficient if you take into account hand wavey externalities not captured in the classical transaction cost model of a payment processor like visa.
What I’ve done is invalidate that argument not by scaling visa down to a single transaction (as that doesn’t capture externalities, per the argument posited) but scale BTC up as the argument is BTC captures all externalities. By then showing that it’s physically impossible I’ve disproved the thesis.
You’re making a different argument about avenues for scaling and that deserves its own conversation.
That’s no mistake, folks are suggesting that on a per transaction basis - today - Bitcoin is cheaper or more efficient if you take into account hand wavey externalities not captured in the classical transaction cost model of a payment processor like visa.
What I’ve done is invalidate that argument not by scaling visa down to a single transaction (as that doesn’t capture externalities, per the argument posited) but scale BTC up as the argument is BTC captures all externalities. By then showing that it’s physically impossible I’ve disproved the thesis.
You’re making a different argument about avenues for scaling and that deserves its own conversation.
You haven't shown that it's physically impossible though. Scaling doesn't work that way, not even in the physical world does it work that way. As the side length of a cube increases the surface area increases with the square of the side length, and volume increases with the cube of the side length. When considering the effects of scaling a system it makes no sense to just multiply all numbers by some constant. The question of how much energy Bitcoin would consume if you scaled it up cannot be solved, even in approximation, by blindly multipling it's current energy usage by a constant.
You misunderstand. I’m not saying it’s physically impossible for Bitcoin to scale (which I do believe, separately), but that it’s physically impossible for Bitcoin to be more efficient on a per transaction basis as specced today even if you take into account all externalities.
Okay, I might be misunderstanding you. What is your argument though? I can't find anywhere in this thread where you showed it's impossible for bitcoin to be more efficient on a per-txn basis.
Energy use in equilibrium is proportional to the value of the block rewards plus transaction rewards. In a world where Bitcoin replaces gold or visa, it would be significantly worse for the environment than it is today, since the value of each unit would have to increase to satisfy the demand.
> Energy use in equilibrium is proportional to the value of the block rewards plus transaction rewards.
Good point, you're right, I was forgetting this.
> since the value of each unit would have to increase to satisfy the demand.
I didn't follow this though, what do you mean?
> In a world where Bitcoin replaces gold or visa
It doesn't seem very meaningful to me to talk about energy usage in this world because Bitcoin can't replace visa. To replace visa we would have to make enough changes to it that I don't have much of an idea of what the energy usage of the modified system will look like.
Though let's consider Nervos' NC-Max, which gets a lot closer to replacing visa than an unmodified Bitcoin can. It works by, effectively, massively increasing the block size limit. In a NC-Max world energy usage would still be proportional to the coinbase but the coinbase might stay small because there's so much room in each block that transaction fees stay low.
Good point, you're right, I was forgetting this.
> since the value of each unit would have to increase to satisfy the demand.
I didn't follow this though, what do you mean?
> In a world where Bitcoin replaces gold or visa
It doesn't seem very meaningful to me to talk about energy usage in this world because Bitcoin can't replace visa. To replace visa we would have to make enough changes to it that I don't have much of an idea of what the energy usage of the modified system will look like.
Though let's consider Nervos' NC-Max, which gets a lot closer to replacing visa than an unmodified Bitcoin can. It works by, effectively, massively increasing the block size limit. In a NC-Max world energy usage would still be proportional to the coinbase but the coinbase might stay small because there's so much room in each block that transaction fees stay low.
> I didn't follow this though, what do you mean?
I should have worded it better, I just mean that if Bitcoin were to replace gold as the primary store of value, the price of Bitcoin would have to rise significantly to absorb the demand, since supply is inelastic. This in turn would increase the environmental externalities.
I should have worded it better, I just mean that if Bitcoin were to replace gold as the primary store of value, the price of Bitcoin would have to rise significantly to absorb the demand, since supply is inelastic. This in turn would increase the environmental externalities.
Thanks for clarifying. I'm not sure it would increase the environmental externalities.
Since transaction inclusion is a marketplace and since most products we care about will continue to be denominated in local currencies I don't think transaction fees will change much as the price of bitcoin changes.
As the dollar-denominated value of a 0.01btc fee increases people will become less willing to spend that 0.01btc. There might be some stickiness but I expect the kwh-denominated fees will grow much more slowly than the price of bitcoin.
Since transaction inclusion is a marketplace and since most products we care about will continue to be denominated in local currencies I don't think transaction fees will change much as the price of bitcoin changes.
As the dollar-denominated value of a 0.01btc fee increases people will become less willing to spend that 0.01btc. There might be some stickiness but I expect the kwh-denominated fees will grow much more slowly than the price of bitcoin.
>Energy consumption in the classical model is substantially lower because if you scaled up Bitcoin to the size of visa alone it would exceed the amount of energy generated on earth a few times over and the amount of ewaste generated on earth too.
This seems to be a misunderstanding of how mining works. The amount of energy used for mining is largely disconnected from transaction volume. Mining a block with one transaction takes about the same amount of energy (within a few watts) as mining a block with 10000 transactions.
This seems to be a misunderstanding of how mining works. The amount of energy used for mining is largely disconnected from transaction volume. Mining a block with one transaction takes about the same amount of energy (within a few watts) as mining a block with 10000 transactions.
There’s no misunderstanding. To the extent that the cap remains 7tx/sec and saturated at that level then my point remains valid. There’s no plan to change it so let’s stay away from hypotheticals.
Yup, last I checked there is so much resistance to increasing the block size that there was multiple forks about it.
The hope for scaling bitcoin is on stuff like the lightning network and other more esoteric stuff like coinjoin. That being said lighting network could scale arbitrarily in theory, but the security properties depend on being able to tx on the main chain in a timely manner. In the case that there is a wide spread theft attempt on the lighting network we could see many LN channels trying to be closed at the same time and shooting the fees up beyond the attack value.
The hope for scaling bitcoin is on stuff like the lightning network and other more esoteric stuff like coinjoin. That being said lighting network could scale arbitrarily in theory, but the security properties depend on being able to tx on the main chain in a timely manner. In the case that there is a wide spread theft attempt on the lighting network we could see many LN channels trying to be closed at the same time and shooting the fees up beyond the attack value.
Well a lightning channel requires 1 on chain transaction to open and 1 to close so it’d cost $12 and for everyone on earth to open and close a single channel would take over 70 years. So it’s not really a scaling solution. And L2 isn’t blockchain anyways, you could conceivably implement lightning with classical assets.
Most people have been txing with a trusted source (e.g. coinbase).
> you could conceivably implement lightning with classical assets.
Not with the same security properties. The idea of building a money transfer service where you simply have many people with liquidity that transfer IOUs instead of the actual money has been around since at least the 8th century: https://en.wikipedia.org/wiki/Hawala
There was no formal ultimate settlement layer though.
I personally think that we need to continue to investigate ways to push what we trust and eventually have a workable system that actually trusts individual public keys to not double spend on pain of losing their reputation.
Until that happens I'll continue to hold some BTC.
> you could conceivably implement lightning with classical assets.
Not with the same security properties. The idea of building a money transfer service where you simply have many people with liquidity that transfer IOUs instead of the actual money has been around since at least the 8th century: https://en.wikipedia.org/wiki/Hawala
There was no formal ultimate settlement layer though.
I personally think that we need to continue to investigate ways to push what we trust and eventually have a workable system that actually trusts individual public keys to not double spend on pain of losing their reputation.
Until that happens I'll continue to hold some BTC.
> Most people have been txing with a trusted source (e.g. coinbase).
That's not blockchain, and it's not crypto. You can do that right now with literally any asset in an InteractiveBrokers account.
That's not blockchain, and it's not crypto. You can do that right now with literally any asset in an InteractiveBrokers account.
It depends upon the scaling algorithm -- as volume goes up, there may be efficiencies that allow the (competing!) miners to reduce their transaction fees.
In theory, since there is no notion of a Bitcoin chargeback and no need to extend credit to any party in the transaction, the intrinsic cost of a bitcoin transaction should be lower.
In theory, since there is no notion of a Bitcoin chargeback and no need to extend credit to any party in the transaction, the intrinsic cost of a bitcoin transaction should be lower.
The intrinsic cost of a transaction is basically zero, the cost associated with Bitcoin is Smaug-style keeping people off your coins. There is no scaling algorithm and no scaling to date.
Believe it or not chargebacks and credit are good things. This you can find out if you ask literally anyone why they use their credit card instead of their debit card.
Believe it or not chargebacks and credit are good things. This you can find out if you ask literally anyone why they use their credit card instead of their debit card.
>Credit-card companies consume a few percent of revenue
And anyone that "accepts" bitcoin as payment probably takes more than that due to Bitcoin's volatility.
If at the moment of a transaction, 1 BTC = 20k USD and I go to buy something that is $20k USD, it's not going to show up as "1 BTC" on the checkout.. it will probably be like 1.05 BTC.
Also, credit-card companies give guarantees to both the buyers and sellers, so they are providing a service. Buyers get extra protection with extra warranties, ability to reverse fraudulent/deceptive sellers. Sellers get extra revenue with people buying stuff they don't have cash for, and don't have to worry about fraudulent cash/checks etc. Yeah sellers overall take a bit of a hit, but the argument can be made the couple percent is worth it to never have to worry about getting scammed by a buyer.
Anyway.. crypto offers absolutely NONE of that. So comparing it to credit card companies is honestly quite laughable.
The only thing you can try to argue is crypto offers anonymity to a degree? Although it sure seems like you have to jump through a lot of hoops for this to even be true since it's a public ledger...
And anyone that "accepts" bitcoin as payment probably takes more than that due to Bitcoin's volatility.
If at the moment of a transaction, 1 BTC = 20k USD and I go to buy something that is $20k USD, it's not going to show up as "1 BTC" on the checkout.. it will probably be like 1.05 BTC.
Also, credit-card companies give guarantees to both the buyers and sellers, so they are providing a service. Buyers get extra protection with extra warranties, ability to reverse fraudulent/deceptive sellers. Sellers get extra revenue with people buying stuff they don't have cash for, and don't have to worry about fraudulent cash/checks etc. Yeah sellers overall take a bit of a hit, but the argument can be made the couple percent is worth it to never have to worry about getting scammed by a buyer.
Anyway.. crypto offers absolutely NONE of that. So comparing it to credit card companies is honestly quite laughable.
The only thing you can try to argue is crypto offers anonymity to a degree? Although it sure seems like you have to jump through a lot of hoops for this to even be true since it's a public ledger...
>it's not going to show up as "1 BTC" on the checkout.. it will probably be like 1.05 BTC.
In my experience the spread is usually under 1% of the 24 avg.
>[...] and don't have to worry about fraudulent cash/checks etc. Yeah sellers overall take a bit of a hit, but the argument can be made the couple percent is worth it to never have to worry about getting scammed by a buyer.
But how are you going to get scammed accepting bitcoin? It's not like it's easy to forge a bitcoin.
In my experience the spread is usually under 1% of the 24 avg.
>[...] and don't have to worry about fraudulent cash/checks etc. Yeah sellers overall take a bit of a hit, but the argument can be made the couple percent is worth it to never have to worry about getting scammed by a buyer.
But how are you going to get scammed accepting bitcoin? It's not like it's easy to forge a bitcoin.
>In my experience the spread is usually under 1% of the 24 avg.
And how does that work? For example, the last 24hr bitcoin is up like 10%.. Let's call 5% below the current price the 24hr average.. are you suggesting that the exchange rate is 1% above the 24avg, or 4% below the current price, meaning the seller is eating 4% of the current price? That certainly does not make any sense.
>But how are you going to get scammed accepting bitcoin? It's not like it's easy to forge a bitcoin.
I agree the seller can't really get scammed, but the buyer has --zero-- recourse. So sure the seller loves it because there is no recourse and they can add a nice spread (my first point). But the buyer does not.
Whereas credit cards- both parties get benefits (even if it skews toward the buyer, however that is a good thing, it shouldn't be equal.. the seller has more information about the transaction thus the buyer should have more recourse).
And how does that work? For example, the last 24hr bitcoin is up like 10%.. Let's call 5% below the current price the 24hr average.. are you suggesting that the exchange rate is 1% above the 24avg, or 4% below the current price, meaning the seller is eating 4% of the current price? That certainly does not make any sense.
>But how are you going to get scammed accepting bitcoin? It's not like it's easy to forge a bitcoin.
I agree the seller can't really get scammed, but the buyer has --zero-- recourse. So sure the seller loves it because there is no recourse and they can add a nice spread (my first point). But the buyer does not.
Whereas credit cards- both parties get benefits (even if it skews toward the buyer, however that is a good thing, it shouldn't be equal.. the seller has more information about the transaction thus the buyer should have more recourse).
>And how does that work? For example, the last 24hr bitcoin is up like 10%.. Let's call 5% below the current price the 24hr average.. are you suggesting that the exchange rate is 1% above the 24avg, or 4% below the current price, meaning the seller is eating 4% of the current price? That certainly does not make any sense.
That was based on how I remembered some merchants handled conversion a few years ago. I just did a test with coingate and the spread between their rate and the market rate is under 0.05% (yes that's a fraction of a percent, not 5%).
>I agree the seller can't really get scammed, but the buyer has --zero-- recourse
I don't disagree that credit card protections are good for the consumer. The problem is that there's no opt out (eg. horror stories about people's paypal accounts being frozen because of a surge in donations), and you're forced to use the bank (or credit card company) as the escrow.
That was based on how I remembered some merchants handled conversion a few years ago. I just did a test with coingate and the spread between their rate and the market rate is under 0.05% (yes that's a fraction of a percent, not 5%).
>I agree the seller can't really get scammed, but the buyer has --zero-- recourse
I don't disagree that credit card protections are good for the consumer. The problem is that there's no opt out (eg. horror stories about people's paypal accounts being frozen because of a surge in donations), and you're forced to use the bank (or credit card company) as the escrow.
Bitcoin costs about 6$ per transaction (based on block reward). That is more than many transactions I make. Also, if you are using electricity to heat a house, heat pumps are about 4x more effective than bitcoin mining. This "mine for heat" meme has no real basis in fact.
I admit $6 is very expensive when compared to credit card fees, but Bitcoin is the only way I know of sending someone in a different country $10k for just a $6 fee. It would still be $6 if you sent $1M.
There’s plenty of ways. Consider TransferWise. They generally charge 0.8% for USD-CAD and 0% for USD-INR. Pretty cheap. InteractiveBrokers allows you to exchange at market rates on the multi trillion dollar forex market for 2/10ths of a basis point ($20 per million).
You’re also leaving out two steps in your calculus that really tilt the scales. You’re not paid in Bitcoin and your recipient cannot spent Bitcoin, therefore you need to pay a 1-2% fee at origin, $6 for a BTC TX, $90 in electricity socialized across the block reward and a 1-2% fee at destination.
Moving $10,000 USD to CAD on the blockchain is roughly $399 not $6.
You’re also leaving out two steps in your calculus that really tilt the scales. You’re not paid in Bitcoin and your recipient cannot spent Bitcoin, therefore you need to pay a 1-2% fee at origin, $6 for a BTC TX, $90 in electricity socialized across the block reward and a 1-2% fee at destination.
Moving $10,000 USD to CAD on the blockchain is roughly $399 not $6.
>InteractiveBrokers allows you to exchange at market rates on the multi trillion dollar forex market for 2/10ths of a basis point ($20 per million).
but that only covers conversion, right? Or does IB also allow you to send to arbitrary accounts?
>therefore you need to pay a 1-2% fee at origin [...] and a 1-2% fee at destination.
That's only if you use the managed exchange service. If use the trading interface (ie. placing bids/asks manually), it's much lower. eg. 0.5% for coinbase pro[1], 0.25% for gemini activetrader[2]
[1] https://help.coinbase.com/en/pro/trading-and-funding/trading...
[2] https://gemini.com/fees/activetrader-fee-schedule#section-ac...
but that only covers conversion, right? Or does IB also allow you to send to arbitrary accounts?
>therefore you need to pay a 1-2% fee at origin [...] and a 1-2% fee at destination.
That's only if you use the managed exchange service. If use the trading interface (ie. placing bids/asks manually), it's much lower. eg. 0.5% for coinbase pro[1], 0.25% for gemini activetrader[2]
[1] https://help.coinbase.com/en/pro/trading-and-funding/trading...
[2] https://gemini.com/fees/activetrader-fee-schedule#section-ac...
Indeed the IBKR approach is longer and there are more steps. You transfer cash to the account in the source country, make the FOREX transaction, transfer the money to your own bank account in the destination and the use a local payment system. It is however the cheapest option I’m aware of in the entire world. $20 per million + 0%.
If you’re sending comparatively smaller quantities then the delta between that and TransferWise is negligible, and it is a one stop shop.
If you’re sending comparatively smaller quantities then the delta between that and TransferWise is negligible, and it is a one stop shop.
I have used Bitcoin to send money internationally. I did not spend any money on turning my dollars into bitcoin, because I already had bitcoin. I did not pay $90 in electricity costs, it seems a little silly to bring the block reward up. You already have a good argument for what you're trying to say, you don't need to pretend that a cost others pay is a cost the transaction sender pays. As far as I know the recipients of my transactions did not pay any fees to convert the bitcoin back into their local currencies, because they were fine with holding on to it as Bitcoin.
I am not trying to say that Bitcoin solves every problem. I agree with you that there are many problems it does not solve. The $399 number is disingenuous though, you're ignoring that there are situations where bitcoin really does have lower fees than the alternatives.
I am not trying to say that Bitcoin solves every problem. I agree with you that there are many problems it does not solve. The $399 number is disingenuous though, you're ignoring that there are situations where bitcoin really does have lower fees than the alternatives.
Ill grant you socialized cost of block reward is contentious and probably a distraction, though I personally stand by it. I’d argue your friends have simply deferred the conversion fee back to fiat, but I digress.
There may be times when it’s less expensive, although it is also riskier, just ask the dude who lost $400K to the Quadriaga collapse.
There may be times when it’s less expensive, although it is also riskier, just ask the dude who lost $400K to the Quadriaga collapse.
Anyone who loses their money when an exchange collapses has not lost bitcoin, they already spent that bitcoin on a bitcoin-denominated-receivable and then lost that receivable.
Yeah and anybody who loses their money on the stock exchange, already spent that money on a security and then the security lost value. What's the difference?
The GP seems to be implying that using bitcoin is risky, which is true, but as evidence cites someone who lost money while not holding bitcoin. I'm sure people also lost CAD they had been storing in Quadriga; when you put money into an uninsured bank/exchange you might lose it, losing it is not evidence that bitcoin itself is risky.
You can’t spend Bitcoin anywhere which means you need to rely on these exchanges to get something you can exchange for goods and services. This makes them a mandatory part of the exchange transaction and ecosystem as such their risk must be factored in. You can’t pretend the platonic ideal exists for crypto when comparing it to real world pricing and risk for existing solutions. That’s disingenuous at best.
With bitcoin the choices seems equivalent to unsecured banks (trust someone else), or gold bars under the mattress (hope they don't get stolen, you don't get incapacitated and they get forgotten about, etc). I wouldn't want to store a significant chunk of my savings in either of those situations.
current state of the art is not very good, storing large amounts of cryptocurrencies is not as convenient as large amounts of fiat and it may never be as convenient, but usability is slowly improving.
Hardware wallets and safe deposit boxes and multisig let you build a system which is far better than storing your money in an unsecured bank and far less vulnerable to theft/loss than the mattress strategy.
Hardware wallets and safe deposit boxes and multisig let you build a system which is far better than storing your money in an unsecured bank and far less vulnerable to theft/loss than the mattress strategy.
Moving $10,000 USD to CAD on the blockchain is roughly $399 not $6.
This is so disingenuous it's not even funny.
There are so many countries that US residents can't send to without going through a middleman, which takes a cut. Bitcoin isn't for sending money to CAD, which of course you can do. It really shines to sending money to places that don't have nearly as much financial infrastructure.
A regular wire transfer can take up to 3 days and cost 5-10%.
A bitcoin transaction that takes 1 day is cost 1 satoshi per byte. A satoshi is 1/100,000,000 of a bitcoin. Checking a realtime dashboard (https://bitbo.io), a satoshi is worth $0.00019225.
This is so disingenuous it's not even funny.
There are so many countries that US residents can't send to without going through a middleman, which takes a cut. Bitcoin isn't for sending money to CAD, which of course you can do. It really shines to sending money to places that don't have nearly as much financial infrastructure.
A regular wire transfer can take up to 3 days and cost 5-10%.
A bitcoin transaction that takes 1 day is cost 1 satoshi per byte. A satoshi is 1/100,000,000 of a bitcoin. Checking a realtime dashboard (https://bitbo.io), a satoshi is worth $0.00019225.
(1) https://transferwise.com/help/articles/2571942/what-countrie...
(2) the countries without infrastructure generally can’t afford to be spending even $6 on a transaction. Venezuela’s minimum wage is $2 per month.
(3) Bitcoin isn't for sending money to CAD, which of course you can do.
Funny how it’s always not for the thing I point out it doesn’t work for haha. Nobody can quite figure out what it is for except speculation and crime.
(2) the countries without infrastructure generally can’t afford to be spending even $6 on a transaction. Venezuela’s minimum wage is $2 per month.
(3) Bitcoin isn't for sending money to CAD, which of course you can do.
Funny how it’s always not for the thing I point out it doesn’t work for haha. Nobody can quite figure out what it is for except speculation and crime.
Nobody can quite figure out what it is for except speculation and crime.
Bitcoin is a non-sovereign, hard-capped supply, global, immutable, decentralized digital store of value. It’s an insurance policy against monetary and fiscal policy irresponsibility from central banks and governments globally.
Bitcoin is a non-sovereign, hard-capped supply, global, immutable, decentralized digital store of value. It’s an insurance policy against monetary and fiscal policy irresponsibility from central banks and governments globally.
I agree with part (1) but there's no reason (1) implies (2).
After all, Chuck-E-Cheese tokens fit a large part of the definition in part (1). After all they're non-sovereign, limited issuance, global, immutable and decentralized. But you'd be hard pressed to find someone who believes that implies Chuck-E-Cheese tokens are an insurance policy against monetary and fiscal policy irresponsibility from central banks and governments globally.
After all, Chuck-E-Cheese tokens fit a large part of the definition in part (1). After all they're non-sovereign, limited issuance, global, immutable and decentralized. But you'd be hard pressed to find someone who believes that implies Chuck-E-Cheese tokens are an insurance policy against monetary and fiscal policy irresponsibility from central banks and governments globally.
The phrase "limited issuance" applies to bitcoin far more than it applies to chuck-e-cheese and given the rest of your comments it's clear you already know this. It seems you've decided you hate bitcoin and you're happy to use whatever argument justifies that opinion no matter how flimsy.
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The fact that credit card fees are high is not reason enough for Bitcoin to win this forever. Nothing stops interchange from switching from a % model technically - the costs to the issuer and the network scale on a txn basis (same as bitcoin). All it takes is banks to cap their interchange - which they can, if bitcoin ever becomes competitive?
Its free in Europe between the countries, might be expensive in America where you tend to use credit cards to send money.
The most important use-case for Bitcoin is the separation of money and state. As in, taking the place of USD as the worlds reserve currency. It does not need to be used to settle every little transaction for this, but rather used as a base layer for institutions. I know you are unlikely to see this use-case as plausible, but that is why so many people are buying Bitcoin right now.
For this use case, the amount of energy used to secure Bitcoin should be compared to the amount of energy used to secure the USD. Not just the energy to print cash, maintain digital system, etc, but the energy and human lives spent on war to maintain dominance.
For this use case, the amount of energy used to secure Bitcoin should be compared to the amount of energy used to secure the USD. Not just the energy to print cash, maintain digital system, etc, but the energy and human lives spent on war to maintain dominance.
> the energy and human lives spent on war to maintain dominance
This is a really important point that I want to emphasize. Maintaining the value and scarcity of a fiat currency such as the dollar requires strong law enforcement and ultimately, for a global reserve currency, dominating military power. Bitcoin mining is a rounding error compared to the peacetime US defense budget, let alone all the externalities associated with militaries and war.
This is still a big if, but if the function of establishing a scarce digital global reserve currency can be done by an algorithm without relying on law enforcement or militaries, at a fraction of the cost, that is a huge win for the world.
This is a really important point that I want to emphasize. Maintaining the value and scarcity of a fiat currency such as the dollar requires strong law enforcement and ultimately, for a global reserve currency, dominating military power. Bitcoin mining is a rounding error compared to the peacetime US defense budget, let alone all the externalities associated with militaries and war.
This is still a big if, but if the function of establishing a scarce digital global reserve currency can be done by an algorithm without relying on law enforcement or militaries, at a fraction of the cost, that is a huge win for the world.
this has been discussed to death. ultimately Nic Carter's piece settles it i think: https://www.coindesk.com/the-last-word-on-bitcoins-energy-co...
"Ultimately it’s just a matter of opinion as to whether the existence of a non-state, synthetic monetary commodity is a good idea. The truth is that blockspace is a service which is paid for, and that’s where its resource cost is derived. Something duly purchased cannot, by definition, be a waste. Its buyer derives benefit from its existence, regardless of anyone else’s subjective opinion of the merit of the transaction. These same arguments have been made countless times about perceived “costs” of the gold standard, and rebutted on similar grounds before. Fundamentally, millions of individuals the world over still value physical, bank-independent savings, so it still gets pulled out of the ground with regularity. As long as people value Bitcoin, so, too, will the block-space auction continue in perpetuity.
The Bitcoin-energy worriers need not despair, however. There is a solution. All they must do is persuade Bitcoin fans to use and value an alternative settlement medium. Their best bet will be to devise a system that is even more secure, offers stronger assurances, settles faster, is more privacy preserving and is more censor resistant – all without using Proof-of-Work. Such a system would be miraculous. I’m waiting with bated breath."
"Ultimately it’s just a matter of opinion as to whether the existence of a non-state, synthetic monetary commodity is a good idea. The truth is that blockspace is a service which is paid for, and that’s where its resource cost is derived. Something duly purchased cannot, by definition, be a waste. Its buyer derives benefit from its existence, regardless of anyone else’s subjective opinion of the merit of the transaction. These same arguments have been made countless times about perceived “costs” of the gold standard, and rebutted on similar grounds before. Fundamentally, millions of individuals the world over still value physical, bank-independent savings, so it still gets pulled out of the ground with regularity. As long as people value Bitcoin, so, too, will the block-space auction continue in perpetuity.
The Bitcoin-energy worriers need not despair, however. There is a solution. All they must do is persuade Bitcoin fans to use and value an alternative settlement medium. Their best bet will be to devise a system that is even more secure, offers stronger assurances, settles faster, is more privacy preserving and is more censor resistant – all without using Proof-of-Work. Such a system would be miraculous. I’m waiting with bated breath."
You would love Eth 2.0 then! The idea of proof of stake is to remove waste from the equation
Isn't the basic idea of ETH still "distributed computer" a.k.a. "pointless redoing every computation over and over" albeit with 2.0 it's sharded (i.e. only a subset of verification nodes redoing each computation)?
Still sounds wasteful, except slightly less massively so.
Still sounds wasteful, except slightly less massively so.
That's accurate, although Eth 2 is planning to use fairly small shards (128 nodes according to the current spec). So there should be ~128 nodes redoing each computation, vs several thousand in Eth 1.
Some newer projects (including the one I work on, mirprotocol.org) are using cryptographic proofs to verify each computation, to avoid re-execution entirely.
Some newer projects (including the one I work on, mirprotocol.org) are using cryptographic proofs to verify each computation, to avoid re-execution entirely.
[deleted]
Proof of stake does not have the same security properties as proof of work. The arguments are too complicated for me to usefully communicate them in a short HN post, but as a heuristic just keep in mind that most cryptocurrencies haven't adopted PoS despite it facially seeming better/"less wasteful".
Given that ETH is the second biggest cryptocurrency it will be a great stress test of the security properties of proof of stake.
Honestly if it runs successfully for multiple staking periods I don't think there will be much of an argument for PoW cryptocurrencies that aren't the dominate coin in their respective type of work. Essentially all coins that share a proof of work with a larger coin are constantly at risk of a 51% attack. We've seen it before with bitcoin forks.
Proof of work's security properties are broken for everything that isn't BTC, ETH (although this will change soon) and whatever the dominate CPU coin is (Monero?)
Honestly if it runs successfully for multiple staking periods I don't think there will be much of an argument for PoW cryptocurrencies that aren't the dominate coin in their respective type of work. Essentially all coins that share a proof of work with a larger coin are constantly at risk of a 51% attack. We've seen it before with bitcoin forks.
Proof of work's security properties are broken for everything that isn't BTC, ETH (although this will change soon) and whatever the dominate CPU coin is (Monero?)
> Proof of work's security properties are broken for everything that isn't BTC, ETH (although this will change soon) and whatever the dominate CPU coin is
PoW secures any coin that dominates the daily issuance of all coins (efficiently) using the same hardware. So the different hardware classes are
CPUs
GPUs
SHA256 ASICs
scrypt ASICs
Equihash ASICs
X11 ASICs
etc...
and each one can secure one dominant coin.
PoW secures any coin that dominates the daily issuance of all coins (efficiently) using the same hardware. So the different hardware classes are
CPUs
GPUs
SHA256 ASICs
scrypt ASICs
Equihash ASICs
X11 ASICs
etc...
and each one can secure one dominant coin.
> most cryptocurrencies haven't adopted PoS despite it facially seeming better/"less wasteful"
Most post-launch cryptocurrencies were designed a long time ago, though. If you look at recent credible projects, most involve proof of stake: NEAR, Solana, Coda (Mina), Cosmos, Celo, Polkadot, etc.
I can only think of a couple recent blockchain designs based on proof of work: Grin and Iron Fish.
Most post-launch cryptocurrencies were designed a long time ago, though. If you look at recent credible projects, most involve proof of stake: NEAR, Solana, Coda (Mina), Cosmos, Celo, Polkadot, etc.
I can only think of a couple recent blockchain designs based on proof of work: Grin and Iron Fish.
You're right, but that's only the case right now. Incredible effort has been and continues to be made on making PoS secure, scalable, and distributed.
I'm not aware of any insurmountable problems having been found. With Eth2.0 steadily approaching launch and other networks in various stages of progression, it seems increasingly unlikely we'll find one.
I'm not aware of any insurmountable problems having been found. With Eth2.0 steadily approaching launch and other networks in various stages of progression, it seems increasingly unlikely we'll find one.
The insurmountable problem is that a user cannot tell which is the 'real' fork of a PoS chain without some kind of sidechannel information.
My favorite argument: "it's too complicated for me to explain!"
See this comment by Gregory Maxwell (a core Bitcoin developer): https://news.ycombinator.com/item?id=25007874
Saying that PoS offers zero security seems a bit extreme but there's definitely a trade-off.
Saying that PoS offers zero security seems a bit extreme but there's definitely a trade-off.
We should tax/price externalities in general, there is no need to single out cryptocurrency.
> essentially an unproductive project
Who are you to judge? There are lots of things that I find useless that the world uses a lot more energy on.
Who are you to judge? There are lots of things that I find useless that the world uses a lot more energy on.
> The amount of energy being wasted (reportedly more than seven nuclear power plants worth) on what is essentially an unproductive project is quite absurd.
Orders of magnitude less than the amount of energy being "wasted" sustaining the millions of employees of the banking industry. I use scare quotes because the energy is being spent, not wasted.
> I mean what would be left except for just buying into the pyramid scheme, and ransomware payments
It's hard to give you the benefit of the doubt when you clearly haven't bothered to understand the argument for Bitcoin's value proposition.
Hard money (i.e. money which cannot be inflated) has valuable economic properties, and many people think that a hard money is concomitantly a valuable long-term investment/store of value.
Orders of magnitude less than the amount of energy being "wasted" sustaining the millions of employees of the banking industry. I use scare quotes because the energy is being spent, not wasted.
> I mean what would be left except for just buying into the pyramid scheme, and ransomware payments
It's hard to give you the benefit of the doubt when you clearly haven't bothered to understand the argument for Bitcoin's value proposition.
Hard money (i.e. money which cannot be inflated) has valuable economic properties, and many people think that a hard money is concomitantly a valuable long-term investment/store of value.
> Hard money (i.e. money which cannot be inflated)
1) Bitcoin has never not been in an inflationary period. Every 10 minutes or so, more gets printed.
2) There's no technical reason this can't continue forever - whoever controls 51% of the network can dictate the rules. Yes, the network could fork if the rules changed, but its impossible to say which network would be more successful.
1) Bitcoin has never not been in an inflationary period. Every 10 minutes or so, more gets printed.
2) There's no technical reason this can't continue forever - whoever controls 51% of the network can dictate the rules. Yes, the network could fork if the rules changed, but its impossible to say which network would be more successful.
I think most people would agree that finance is too large in most developed countries, but it is also important. It's not like the large companies that pay investment banks to help them with their IPOs or with issuing bonds just want to waste money.
Also, it's not like the functions that banks currently do would become unnecessary in a Bitcoin maximalist world. It's an apples to oranges comparison.
I think both of you are misunderstanding what centimeter is trying to say. They didn't suggest that Bitcoin will replace traditional finance, or that traditional finance is a waste.
Ok, but then at best the argument is whataboutism -- it's ok to waste more energy because we already waste a lot?
The reality is that Bitcoin already objectively uses a lot of energy by design, and the problem will only get worse if its price goes up.
The reality is that Bitcoin already objectively uses a lot of energy by design, and the problem will only get worse if its price goes up.
I don't want to try to argue in centimeter's place, since I'm not sure I agree with them, but the most charitable reading of their comment is not that they're trying to attack the status quo to distract from the energy usage of bitcoin.
They seem to be saying that traditional finance uses a lot of energy but we're mostly okay with that because we find financial products and services useful.
Bitcoin also uses a lot of energy, but it's only a "waste" if you think it's providing no value. Bitcoin is one of the few ways to buy "hard money" and if you value that the energy is not being wasted, it's being spent on provisioning a valuable service.
They seem to be saying that traditional finance uses a lot of energy but we're mostly okay with that because we find financial products and services useful.
Bitcoin also uses a lot of energy, but it's only a "waste" if you think it's providing no value. Bitcoin is one of the few ways to buy "hard money" and if you value that the energy is not being wasted, it's being spent on provisioning a valuable service.
Actually, is helping to reduce the carbon footprint of natural gas and oil producers: https://www.coindesk.com/energy-giant-equinor-to-cut-gas-fla...
All of the excess gas and oil that's currently wasted but goes into the atmosphere is starting to be used for Bitcoin mining:https://cointelegraph.com/news/oil-companies-will-dominate-b...
All of the excess gas and oil that's currently wasted but goes into the atmosphere is starting to be used for Bitcoin mining:https://cointelegraph.com/news/oil-companies-will-dominate-b...
When I see those kind of subjective opinions getting popular, I'm glad that projects like bitcoin exists. It's really a political topic, as much as economical or tech.
Work proof does NOT waste energy. Get your facts together. The more energy is in Bitcoin, the stronger is its guarantee of a non-tamperable ledger. Even as it currently stands, China can change the network (I assume). Coordination is not free, rationality 101.
IMO the space to watch in cryptocurrencies is distributed storage. After storage is solved we might start to see distributed compute at prices below what data centers cost.
Sia currently beats S3 at 1/6th the price.
Sia currently beats S3 at 1/6th the price.
If I build a geothermal plant in a place where no one needs power, and use it only to mine bitcoin, then only renewable energy is used, nothing is added to the climate. See https://www.theguardian.com/world/2018/feb/13/how-iceland-be...
Using excess hydro power (china) or renewables like geothermal doesn't hurt the planet. Most bitcoin is mined using marginal energy that would be wasted otherwise. It has to be, as mining is an extremely cutthroat industry where burning actual fossil fuels is generally not cost effective.
Using excess hydro power (china) or renewables like geothermal doesn't hurt the planet. Most bitcoin is mined using marginal energy that would be wasted otherwise. It has to be, as mining is an extremely cutthroat industry where burning actual fossil fuels is generally not cost effective.
Geothermal is neither renewable nor zero-carbon.
https://www.energy.gov/eere/geothermal/geothermal-faqs
> First, it's clean. Energy can be extracted without burning a fossil fuel such as coal, gas, or oil. Geothermal fields produce only about one-sixth of the carbon dioxide that a relatively clean natural-gas-fueled power plant produces, and very little if any, of the nitrous oxide or sulfur-bearing gases. Binary plants, which are closed cycle operations, release essentially no emissions.
> WHY IS GEOTHERMAL ENERGY A RENEWABLE RESOURCE?
> Answer: Because its source is the almost unlimited amount of heat generated by the Earth's core. Even in geothermal areas dependent on a reservoir of hot water, the volume taken out can be reinjected, making it a sustainable energy source.
> First, it's clean. Energy can be extracted without burning a fossil fuel such as coal, gas, or oil. Geothermal fields produce only about one-sixth of the carbon dioxide that a relatively clean natural-gas-fueled power plant produces, and very little if any, of the nitrous oxide or sulfur-bearing gases. Binary plants, which are closed cycle operations, release essentially no emissions.
> WHY IS GEOTHERMAL ENERGY A RENEWABLE RESOURCE?
> Answer: Because its source is the almost unlimited amount of heat generated by the Earth's core. Even in geothermal areas dependent on a reservoir of hot water, the volume taken out can be reinjected, making it a sustainable energy source.
We should have a carbon tax. Cryptocurrency mining isn't so awful if it's funding the development of sustainable, low negative externality energy.
>The amount of energy being wasted (reportedly more than seven nuclear power plants worth) on what is essentially an unproductive project is quite absurd.
As opposed to the energy and pollution generated by digging up yellow rocks or shiny crystals? What about billionares flying around the world in private jets or cruising in their yachts?
Moreover, if carbon emissions are the issue, why not tax it directly (aka carbon tax), rather than indirectly via a "sin" tax? That would have the effect of incentivizing the reduction of carbon emissions economy wide, rather than in a tiny sector.
As opposed to the energy and pollution generated by digging up yellow rocks or shiny crystals? What about billionares flying around the world in private jets or cruising in their yachts?
Moreover, if carbon emissions are the issue, why not tax it directly (aka carbon tax), rather than indirectly via a "sin" tax? That would have the effect of incentivizing the reduction of carbon emissions economy wide, rather than in a tiny sector.
[deleted]
Bitcoin lightning. Please check it out.
A ton of electricity is wasted. Maybe outlaw giant SUVs with 1 person in them?
A ton of electricity is wasted. Maybe outlaw giant SUVs with 1 person in them?
It's a plutocrat wealth store during uncertainty, like gold, but it has no intrinsic value. That's it, that's its only purpose.
Preface: Bitcoin is a neat idea (decentralized currency), but it’s not practical at scale.
Reply: To be fair, the US’ currency has no intrinsic value either. Prior to the removal of the gold standard, your $20 bill was backed by exactly $20 worth of gold in some vault. Mid-1970s, the gold standard was stopped and the US’ currency became “fiat”; it only has value because the US says it does. Should the US’ economy collapse, the bills become literally worthless.
It’s not exactly the same, but Bitcoin is essentially fiat money as its only value is what people say it is (somewhat similar to the stock market). So I think it’s an apt comparison.
Reply: To be fair, the US’ currency has no intrinsic value either. Prior to the removal of the gold standard, your $20 bill was backed by exactly $20 worth of gold in some vault. Mid-1970s, the gold standard was stopped and the US’ currency became “fiat”; it only has value because the US says it does. Should the US’ economy collapse, the bills become literally worthless.
It’s not exactly the same, but Bitcoin is essentially fiat money as its only value is what people say it is (somewhat similar to the stock market). So I think it’s an apt comparison.
It’s not exactly the same, but Bitcoin is essentially fiat money as its only value is what people say it is (somewhat similar to the stock market). So I think it’s an apt comparison.
Absolutely not. There's nothing "fiat" about Bitcoin. Fiat means by decree—there's no Bitcoin nation or organization that decreed that Bitcoin is valuable.
There's no authority that says what a Bitcoin is worth; the market decides.
Bitcoin, like gold, is hard money.
https://tradesmithdaily.com/educational/bitcoin-is-the-pures...
https://www.realvision.com/shows/the-interview-crypto/videos...
This is perhaps the best podcast for Bitcoin skeptics: "Bitcoin Common Misconceptions w/ Robert Breedlove"—https://podcasts.apple.com/us/podcast/btc001-bitcoin-common-...
Absolutely not. There's nothing "fiat" about Bitcoin. Fiat means by decree—there's no Bitcoin nation or organization that decreed that Bitcoin is valuable.
There's no authority that says what a Bitcoin is worth; the market decides.
Bitcoin, like gold, is hard money.
https://tradesmithdaily.com/educational/bitcoin-is-the-pures...
https://www.realvision.com/shows/the-interview-crypto/videos...
This is perhaps the best podcast for Bitcoin skeptics: "Bitcoin Common Misconceptions w/ Robert Breedlove"—https://podcasts.apple.com/us/podcast/btc001-bitcoin-common-...
Nowhere did I say Bitcoin was fiat. I said it’s like fiat in that there’s no store of physical value behind it like the gold standard had. Bitcoin has a value of $x because the market says it has a value of $x. And the USD has a value of $y because the government says it has a value of $y. But on the gold standard, a $20 bill corresponded to a literal $20 of gold - a backing currency.
Despite what Bitcoin proponents want to believe, there is no intrinsic value in Bitcoin - hence why its “exchange rate” fluctuates so much. When a new block is mined, ~$20k of gold don’t magically get added to a vault - because there’s no backing currency.
Despite what Bitcoin proponents want to believe, there is no intrinsic value in Bitcoin - hence why its “exchange rate” fluctuates so much. When a new block is mined, ~$20k of gold don’t magically get added to a vault - because there’s no backing currency.
The fact that Bitcoin is a non-sovereign, hard-capped supply, global, immutable, decentralized digital store of value and that it’s an insurance policy against monetary and fiscal policy irresponsibility from central banks and governments globally is valuable.
It can't be inflated and it can't be counterfeited. It's not subject to political pressure or the whims of a government.
To the extent that anything has intrinsic value, since value is subjective at the end of the day, Bitcoin certainly does, especially now as we have Great Depression levels of unemployment during a global pandemic. The more the global reserve currency is inflated—that would be the trillions and trillions of dollars that have been printed in the past year—the more valuable Bitcoin becomes.
It can't be inflated and it can't be counterfeited. It's not subject to political pressure or the whims of a government.
To the extent that anything has intrinsic value, since value is subjective at the end of the day, Bitcoin certainly does, especially now as we have Great Depression levels of unemployment during a global pandemic. The more the global reserve currency is inflated—that would be the trillions and trillions of dollars that have been printed in the past year—the more valuable Bitcoin becomes.
Bitcoin is perhaps the most important project we'll see in our lifetimes.
The liberation of the most important asset in a capitalist society, money, from the tragedy that has been the current fiat system can not be over emphasized.
Money touches everything and is about time the market takes control of it, takes it away from the crony-states destroying the value of our savings, hence destroying our productivity, undermining the law at every turn in defense of a faux-egalitarianism when in reality that power has only been used to inflict (unwillingly or not) more pain to the marginalized sectors propping up a financialized economy that only exacerbates the wealth gap and radicalizes society to a dangerous level that sadly we all know where it ends up.
Bitcoin may not end up succeeding, but its fight is worthwhile, and necessary, and in the end inevitable, and because of that if the price now is 7 nuclear power plants we should pay it, as god knows we waste enough resources in lobbying, war and corruption already, because the cost to society of not doing it will be even greater in the future, and most probably, bloodier too.
The liberation of the most important asset in a capitalist society, money, from the tragedy that has been the current fiat system can not be over emphasized.
Money touches everything and is about time the market takes control of it, takes it away from the crony-states destroying the value of our savings, hence destroying our productivity, undermining the law at every turn in defense of a faux-egalitarianism when in reality that power has only been used to inflict (unwillingly or not) more pain to the marginalized sectors propping up a financialized economy that only exacerbates the wealth gap and radicalizes society to a dangerous level that sadly we all know where it ends up.
Bitcoin may not end up succeeding, but its fight is worthwhile, and necessary, and in the end inevitable, and because of that if the price now is 7 nuclear power plants we should pay it, as god knows we waste enough resources in lobbying, war and corruption already, because the cost to society of not doing it will be even greater in the future, and most probably, bloodier too.
None of the social ills you identify are a function of fiat currency which is intentionally a temporary, lossy store of value. You take your fiat and you invest it and nothing you say below the first paragraph matters.
Savings are meant to be assets not currency, whether that’s stock, bonds, real estate - whatever. Even a savings account collateralizes loans. You’re not supposed to save cash. Whoever told you that has misled you. You’re supposed to keep a small stockpile to see you through a rainy few months. No more.
The issue is that people don’t have money, and they don’t have wealth. This is strictly a social problem. This is not true in all countries but it certainly is true in the US which has a worse wealth and income distribution than your average banana republic. However there’s zero political will to change it. By anyone, on either side of the political spectrum (with the possible exception of the centre-left Bernie Sanders). Social policy is the only and I do mean only way to make real meaningful progress here.
Replacing one inflationary currency with a worse distribution than a banana republic, with a different deflationary currency with a worse distribution than a banana republic changes nothing.
Savings are meant to be assets not currency, whether that’s stock, bonds, real estate - whatever. Even a savings account collateralizes loans. You’re not supposed to save cash. Whoever told you that has misled you. You’re supposed to keep a small stockpile to see you through a rainy few months. No more.
The issue is that people don’t have money, and they don’t have wealth. This is strictly a social problem. This is not true in all countries but it certainly is true in the US which has a worse wealth and income distribution than your average banana republic. However there’s zero political will to change it. By anyone, on either side of the political spectrum (with the possible exception of the centre-left Bernie Sanders). Social policy is the only and I do mean only way to make real meaningful progress here.
Replacing one inflationary currency with a worse distribution than a banana republic, with a different deflationary currency with a worse distribution than a banana republic changes nothing.
> You take your fiat and you invest it and nothing you say below the first paragraph matters.
If only.
The problematic part of a fiat system is not that is fiat, but that is in the hands of the government who knows not how to exercise constraint and inflates it at will to "pay" for things, more realistically, to promise to pay for things that if it had to actually pay for it will never be able to afford.
> The issue is that people don’t have money, and they don’t have wealth. This is strictly a social problem.
What do you think money is? Money is how societies choose to interact with each other; in a sense, money IS society, at the very least money is the first brick on which to build one. The government printing money and using it to pay for political favors (via military or natural resources contracts, monopoly markets, etc.) is at the core of the wealth gap.
> Replacing one inflationary currency with a worse distribution than a banana republic, with a different deflationary currency with a worse distribution than a banana republic changes nothing.
You don't understand what bitcoin is. Bitcoin's advantage is that the inflation rate is not controlled by the government, ie. they can't print money to buy stuff they can't afford, With bitcoin, governments can't print the wealth gap.
If only.
The problematic part of a fiat system is not that is fiat, but that is in the hands of the government who knows not how to exercise constraint and inflates it at will to "pay" for things, more realistically, to promise to pay for things that if it had to actually pay for it will never be able to afford.
> The issue is that people don’t have money, and they don’t have wealth. This is strictly a social problem.
What do you think money is? Money is how societies choose to interact with each other; in a sense, money IS society, at the very least money is the first brick on which to build one. The government printing money and using it to pay for political favors (via military or natural resources contracts, monopoly markets, etc.) is at the core of the wealth gap.
> Replacing one inflationary currency with a worse distribution than a banana republic, with a different deflationary currency with a worse distribution than a banana republic changes nothing.
You don't understand what bitcoin is. Bitcoin's advantage is that the inflation rate is not controlled by the government, ie. they can't print money to buy stuff they can't afford, With bitcoin, governments can't print the wealth gap.
> The problematic part of a fiat system is not that is fiat, but that is in the hands of the government who knows not how to exercise constraint and inflates it at will to "pay" for things, more realistically, to promise to pay for things that if it had to actually pay for it will never be able to afford.
If economic growth outpaces debt growth then it does not ever have to be paid back.
> ...what do you think money is?
Money is an intentionally lossy temporary store or value and a medium of exchange. Interact, yes. Store long term, no.
If you have problems with monetary policy vote in a new government, just taking your ball to the BVI isn’t a solution.
> ...you don’t understand what Bitcoin is.
I understand full well, and I believe those are bad things. Deflation is bad, for the reason I stated, and an inability to print means an inability to respond to geopolitical shocks (like COVID, for instance Canada has been paying everyone $2000/month this whole time). Not to mention an inability to grow supply with the entry of new market participants.
Bitcoin cannot and will not change the wealth gap when it’s overwhelmingly spoken for already. The best you can do is sentence your children to fight for scraps while the new moneyed class of criminals and lowlifes continues to grow in relative wealth as a fraction of economic activity by doing literally nothing with their money - backed on an inflation schedule created and managed not by economists or experts but a narcotics smuggler and a bunch of random GitHub contributors.
If you really want to change society for the better, run for office, don’t shill magic beans.
If economic growth outpaces debt growth then it does not ever have to be paid back.
> ...what do you think money is?
Money is an intentionally lossy temporary store or value and a medium of exchange. Interact, yes. Store long term, no.
If you have problems with monetary policy vote in a new government, just taking your ball to the BVI isn’t a solution.
> ...you don’t understand what Bitcoin is.
I understand full well, and I believe those are bad things. Deflation is bad, for the reason I stated, and an inability to print means an inability to respond to geopolitical shocks (like COVID, for instance Canada has been paying everyone $2000/month this whole time). Not to mention an inability to grow supply with the entry of new market participants.
Bitcoin cannot and will not change the wealth gap when it’s overwhelmingly spoken for already. The best you can do is sentence your children to fight for scraps while the new moneyed class of criminals and lowlifes continues to grow in relative wealth as a fraction of economic activity by doing literally nothing with their money - backed on an inflation schedule created and managed not by economists or experts but a narcotics smuggler and a bunch of random GitHub contributors.
If you really want to change society for the better, run for office, don’t shill magic beans.
The fact that so many people don't know that cash/fiat is losing value over time makes it somewhat of a problem. Furthermore the creation of cash/fiat creates high benefits to those that benefits from the newly created money first, before the money spreads and devalues its value due to inflation over time.
Inflation vs deflation debate is a complicated one, I don't know which is best in terms of enabling technical progress. One is more short termist, another is more long termist.
But fiat/inflated currencies won't go away. It's just that those kinds of currencies just tends to blow up at some point because of inflation and human nature. It's more than nice to have other options, especially digital. The idea to have some kind of worldwide standard that is open and won't change is also nice.
Inflation vs deflation debate is a complicated one, I don't know which is best in terms of enabling technical progress. One is more short termist, another is more long termist.
But fiat/inflated currencies won't go away. It's just that those kinds of currencies just tends to blow up at some point because of inflation and human nature. It's more than nice to have other options, especially digital. The idea to have some kind of worldwide standard that is open and won't change is also nice.
Not changing is nice conceptually but very bad in practice because the real world changes. It doesn’t map. It’s one of those software engineering tendencies to rewrite instead of understand and improve.
One side note though. Consider that inflation doesn’t affect the poor as the poor live paycheck to paycheck and wages in the US have kept pace with inflation. The wealthy don’t hold cash, they invest. Even cash tends to be held in a savings account with at least partially offsets inflationary pressure. Has it impacted anyone materially? I’d love to see some quantification.
One side note though. Consider that inflation doesn’t affect the poor as the poor live paycheck to paycheck and wages in the US have kept pace with inflation. The wealthy don’t hold cash, they invest. Even cash tends to be held in a savings account with at least partially offsets inflationary pressure. Has it impacted anyone materially? I’d love to see some quantification.
In practice, I'd say "selected" lower level standards aren't changed but built upon. Standard tools also tends to not change much. web protocols, C, C++, php, those are not getting away despite many attempts to reinvent the wheel. Maybe someone will make a better wheel one day, or maybe not, but for me it's nice to have a starting point in the domain of p2p "exchange" that may or may not be adopted as a standard.
As for inflation, it makes it harder for the poor workers to become wealthier, but the issue is more when it stops being sustainable. Inflationary fiat has proven that it could fail. I personally don't trust those persons handling it and I feel that such sentiment is growing among people. There's reasons behind that. That is terrible for a currency. Governments may or may not start having a better monetary policy. We don't have guarantees and much control over it, that's the issue for me. I'd rather avoid an economical disaster and keep a business running than having to deal with the failure of others.
As for inflation, it makes it harder for the poor workers to become wealthier, but the issue is more when it stops being sustainable. Inflationary fiat has proven that it could fail. I personally don't trust those persons handling it and I feel that such sentiment is growing among people. There's reasons behind that. That is terrible for a currency. Governments may or may not start having a better monetary policy. We don't have guarantees and much control over it, that's the issue for me. I'd rather avoid an economical disaster and keep a business running than having to deal with the failure of others.
Each of the languages you called out have changed dramatically to respond to the needs of users, which Bitcoin cannot, has not and will not do. You’re basically advocating for K&R C forever.
Re inflation again, has no impact on poor workers. The amount of value transferred to them in exchange for work is purely social policy and fiscal policy not monetary policy. You can improve workers mobility by supporting unions and minimum wage, not by changing the inflation characteristics of their medium of exchange they don’t get to hold on to anyways. None of your criticisms matter if you’ve invested your fiat.
Re inflation again, has no impact on poor workers. The amount of value transferred to them in exchange for work is purely social policy and fiscal policy not monetary policy. You can improve workers mobility by supporting unions and minimum wage, not by changing the inflation characteristics of their medium of exchange they don’t get to hold on to anyways. None of your criticisms matter if you’ve invested your fiat.
Bitcoin can change depending on the need of the users, assuming it's something accepted by them, which sounds fair to me.
As for the inflation/fiat it just seems to me that you keep ignoring the possibility of a failure of such system. A failure of such system would for sure have terrible consequences and the poor unlike the wealthier will have harder times. Investing the fiat is a good idea, not something remotely popular in my country alas. Here, saving mostly means saving money at the bank (which devalues over time). No wonder why they feel they're losing purchasing power. People who work shall earn wealth simply put, not diminished wealth if they don't learn about financial tricks from someone they trust.
As for the inflation/fiat it just seems to me that you keep ignoring the possibility of a failure of such system. A failure of such system would for sure have terrible consequences and the poor unlike the wealthier will have harder times. Investing the fiat is a good idea, not something remotely popular in my country alas. Here, saving mostly means saving money at the bank (which devalues over time). No wonder why they feel they're losing purchasing power. People who work shall earn wealth simply put, not diminished wealth if they don't learn about financial tricks from someone they trust.
> Bitcoin can change depending on the need of the users, assuming it's something accepted by them, which sounds fair to me.
No? In what way.
> As for the inflation/fiat it just seems to me that you keep ignoring the possibility of a failure of such system. A failure of such system would for sure have terrible consequences and the poor unlike the wealthier will have harder times.
A collapse in finance would affect the people who have money and value, that'd be the rich who'd be affected. It would not affect those who don't have money. Like inflation.
No? In what way.
> As for the inflation/fiat it just seems to me that you keep ignoring the possibility of a failure of such system. A failure of such system would for sure have terrible consequences and the poor unlike the wealthier will have harder times.
A collapse in finance would affect the people who have money and value, that'd be the rich who'd be affected. It would not affect those who don't have money. Like inflation.
The wealthier might lose more wealth overall (if we exclude the options they have to diversify and protect) but that doesn't mean it won't be harder for the poor. A poor by definition doesn't own much. They probably have no house, no easy way to eat, no way to transport if the system collapse and the merchants aren't interested in the little fiat they have. All in all I'm having a hard time to defend the idea that it would be harder for the wealthier to go through a collapse of the currency.
As for bitcoin, well, you can audit the commits on github if you want. There's plenty of things added lately. Miners or other entities like nodes can decide to fork the protocol into another chain (already happened, the protocol is then developed differently in those chains). Rules are subject to a consensus. Also if a user is not happy with a change, he's free to stop using it or to exchange his bitcoins for something else. All in all there's no reasons for participants to refuse modifying and improving the protocol over time.
As for bitcoin, well, you can audit the commits on github if you want. There's plenty of things added lately. Miners or other entities like nodes can decide to fork the protocol into another chain (already happened, the protocol is then developed differently in those chains). Rules are subject to a consensus. Also if a user is not happy with a change, he's free to stop using it or to exchange his bitcoins for something else. All in all there's no reasons for participants to refuse modifying and improving the protocol over time.
> If economic growth outpaces debt growth then it does not ever have to be paid back.
Bernie Maddoff said the same thing. He also tried to create a perpetual motion machine.
> Canada has been paying everyone $2000/month this whole time)
Canada has been lending everyone $2000/month this whole time.
> Bitcoin cannot and will not change the wealth gap when it’s overwhelmingly spoken for already.
Again, you don't understand what bitcoin is, nor money apparently. People don't stash money away, not all of it anyways, and specially not when its inflation rate is limited (as in there is not a lot of excess to stash like right now), they use it to buy stuff, to pay for stuff, to invest in stuff, they enjoy it, that is why you want money in the first place! Money is, was and always will be exchanged, which means it changes hands. Odd concept, I know.
> backed on an inflation schedule created and managed not by economists or experts but a narcotics smuggler and a bunch of random GitHub contributors.
Yes, the "experts" managing the "economy" right now are doing such a great job.
> just taking your ball to the BVI isn’t a solution.
At some point, sooner rather than later by the looks of it, it will be the only solution.
> If you really want to change society for the better, run for office, don’t shill magic beans.
Weird advice from someone convinced we'll never have to pay back our debts.
Bernie Maddoff said the same thing. He also tried to create a perpetual motion machine.
> Canada has been paying everyone $2000/month this whole time)
Canada has been lending everyone $2000/month this whole time.
> Bitcoin cannot and will not change the wealth gap when it’s overwhelmingly spoken for already.
Again, you don't understand what bitcoin is, nor money apparently. People don't stash money away, not all of it anyways, and specially not when its inflation rate is limited (as in there is not a lot of excess to stash like right now), they use it to buy stuff, to pay for stuff, to invest in stuff, they enjoy it, that is why you want money in the first place! Money is, was and always will be exchanged, which means it changes hands. Odd concept, I know.
> backed on an inflation schedule created and managed not by economists or experts but a narcotics smuggler and a bunch of random GitHub contributors.
Yes, the "experts" managing the "economy" right now are doing such a great job.
> just taking your ball to the BVI isn’t a solution.
At some point, sooner rather than later by the looks of it, it will be the only solution.
> If you really want to change society for the better, run for office, don’t shill magic beans.
Weird advice from someone convinced we'll never have to pay back our debts.
> Bernie Maddoff said the same thing. He also tried to create a perpetual motion machine.
Bernie Madoff doesn't get to print his own currency, you see why that's different right? You know who does though? Tether.
> Canada has been lending everyone $2000/month this whole time.
Paying. Lending implies that it has to be returned, it does not.
> Again, you don't understand what bitcoin is, nor money apparently.
Incorrect, I know what money is for and how it works. I don't disagree with anything you said about money. What I disagree with is that inflation matters in that context. It does not. I also see Bitcoin as having been spoken for already, and it has. with a worse wealth distribution than a banana republic, which it has.
> Yes, the "experts" managing the "economy" right now are doing such a great job.
Inflation has been in a tightly controlled 1-2% range in the US since the 1970s. They are. So forgive me for not giving a bunch of un-elected, un-accountable randos with commit privileges and a narcotics trafficker the steering wheel lol.
> At some point, sooner rather than later by the looks of it, it will be the only solution.
Agree to disagree.
> Weird advice from someone convinced we'll never have to pay back our debts.
Who is "our" and why does one have anything to do with the other?
Bernie Madoff doesn't get to print his own currency, you see why that's different right? You know who does though? Tether.
> Canada has been lending everyone $2000/month this whole time.
Paying. Lending implies that it has to be returned, it does not.
> Again, you don't understand what bitcoin is, nor money apparently.
Incorrect, I know what money is for and how it works. I don't disagree with anything you said about money. What I disagree with is that inflation matters in that context. It does not. I also see Bitcoin as having been spoken for already, and it has. with a worse wealth distribution than a banana republic, which it has.
> Yes, the "experts" managing the "economy" right now are doing such a great job.
Inflation has been in a tightly controlled 1-2% range in the US since the 1970s. They are. So forgive me for not giving a bunch of un-elected, un-accountable randos with commit privileges and a narcotics trafficker the steering wheel lol.
> At some point, sooner rather than later by the looks of it, it will be the only solution.
Agree to disagree.
> Weird advice from someone convinced we'll never have to pay back our debts.
Who is "our" and why does one have anything to do with the other?
> Bernie Madoff doesn't get to print his own currency, you see why that's different right? You know who does though? Tether.
As I said, you don’t understand money. Currency is not wealth. Purchasing power cannot be printed, despite what MMT claims real wealth has to be produced using real resources. You can print all the dollars you want, in fact, that is exactly what the monopoly board game creators do.
> Paying. Lending implies that it has to be returned, it does not.
As I said, again, you don’t understand what money is. Under the current system all money is debt. And governments have no purchasing power to give but what they confiscate from citizens via taxes in the present, or take via inflation from the future. Either way, canadians are paying those $2000 back.
> Inflation has been in a tightly controlled 1-2% range in the US since the 1970s. They are. So forgive me for not giving a bunch of un-elected, un-accountable randos with commit privileges and a narcotics trafficker the steering wheel lol.
Which is why the FED came out saying they are gonna increase the rate of inflation that has actually been lower than reported all these past years right? The inflation metrics do not represent real inflation and even the FED admitted it, nor do they capture the wealth inequality even if they did. The riots on the streets, the uncertainty, most americans living paycheck to paycheck, miles of lines at food banks, most americans not having even $400 in savings, all signs of how the experts are such experts at managing the economy right? Not even 1 week of trouble could handle this wonderful economy when covid started they had to print trillions to bail out mega corporations. Such a well managed economy right?
> Who is "our" and why does one have anything to do with the other?
You, the one that claims having a printing press and growing gdp faster than inflation means governments will outrun debts. Don’t shill magic beans.
As I said, you don’t understand money. Currency is not wealth. Purchasing power cannot be printed, despite what MMT claims real wealth has to be produced using real resources. You can print all the dollars you want, in fact, that is exactly what the monopoly board game creators do.
> Paying. Lending implies that it has to be returned, it does not.
As I said, again, you don’t understand what money is. Under the current system all money is debt. And governments have no purchasing power to give but what they confiscate from citizens via taxes in the present, or take via inflation from the future. Either way, canadians are paying those $2000 back.
> Inflation has been in a tightly controlled 1-2% range in the US since the 1970s. They are. So forgive me for not giving a bunch of un-elected, un-accountable randos with commit privileges and a narcotics trafficker the steering wheel lol.
Which is why the FED came out saying they are gonna increase the rate of inflation that has actually been lower than reported all these past years right? The inflation metrics do not represent real inflation and even the FED admitted it, nor do they capture the wealth inequality even if they did. The riots on the streets, the uncertainty, most americans living paycheck to paycheck, miles of lines at food banks, most americans not having even $400 in savings, all signs of how the experts are such experts at managing the economy right? Not even 1 week of trouble could handle this wonderful economy when covid started they had to print trillions to bail out mega corporations. Such a well managed economy right?
> Who is "our" and why does one have anything to do with the other?
You, the one that claims having a printing press and growing gdp faster than inflation means governments will outrun debts. Don’t shill magic beans.
You should really go and spend some time learning about the current monetary and fiscal systems from places other than Bitcoin subreddits.
The claim that “Purchasing power cannot be printed, despite what MMT claims real wealth has to be produced using real resources” is trivially falsifiable. The M2 money supply is 15X what it was in the 1970s but inflation caused the value to drop to 1/7th. That means net new buying power was in fact created - doubled even. The reason is you have too simplistic an understanding of money. Velocity of money matters.
There’s actually a term for excess value created through the addition of new money into the supply which eludes me right now.
> Either way, canadians are paying those $2000 back.
You have way too simplistic a take on the current financial system. Money is a social construct.
> The inflation metrics do not represent real inflation and even the FED admitted it, nor do they capture the wealth inequality even if they did.
lol, inflation is defined in terms of a specific basket of goods and services. If they want to redefine the baskets that’s fine but there’s no such thing as real inflation and fake inflation any more than there’s real math and fake math. If you want, talking about quality of life, standard of living, all that — that’s a much more interesting topic and again 100% social policy not monetary.
> Such a well managed economy right?
Yep! Well managed money supply. Well managed economy, I’m not sure Id go that far but they are two different things.
> You, the one that claims having a printing press and growing gdp faster than inflation means governments will outrun debts. Don’t shill magic beans.
You’ve hopelessly entangled a temporary medium of exchange and a long-term store of value in your brain. This has confused your understanding of economics. Spend less time in Bitcoin subreddits.
Growing gdp faster than debt does allow you never to pay it off, this principal is one that extends from personal finance. If you have an interest only loan all you ever need to pay is the interest. If the growth in the loan interest remains lower than the growth in your income (or inflation) it’s not in your interest to pay back that loan. Doing so increases opportunity cost. You get that right?
I could pay off my whole mortgage today but I won’t. Because I can do more with that money, and expect a better return than mortgage interest minus inflation. So, I refinanced. Thanks to inflation and tax deductions, my real interest rate is almost 0%.
The claim that “Purchasing power cannot be printed, despite what MMT claims real wealth has to be produced using real resources” is trivially falsifiable. The M2 money supply is 15X what it was in the 1970s but inflation caused the value to drop to 1/7th. That means net new buying power was in fact created - doubled even. The reason is you have too simplistic an understanding of money. Velocity of money matters.
There’s actually a term for excess value created through the addition of new money into the supply which eludes me right now.
> Either way, canadians are paying those $2000 back.
You have way too simplistic a take on the current financial system. Money is a social construct.
> The inflation metrics do not represent real inflation and even the FED admitted it, nor do they capture the wealth inequality even if they did.
lol, inflation is defined in terms of a specific basket of goods and services. If they want to redefine the baskets that’s fine but there’s no such thing as real inflation and fake inflation any more than there’s real math and fake math. If you want, talking about quality of life, standard of living, all that — that’s a much more interesting topic and again 100% social policy not monetary.
> Such a well managed economy right?
Yep! Well managed money supply. Well managed economy, I’m not sure Id go that far but they are two different things.
> You, the one that claims having a printing press and growing gdp faster than inflation means governments will outrun debts. Don’t shill magic beans.
You’ve hopelessly entangled a temporary medium of exchange and a long-term store of value in your brain. This has confused your understanding of economics. Spend less time in Bitcoin subreddits.
Growing gdp faster than debt does allow you never to pay it off, this principal is one that extends from personal finance. If you have an interest only loan all you ever need to pay is the interest. If the growth in the loan interest remains lower than the growth in your income (or inflation) it’s not in your interest to pay back that loan. Doing so increases opportunity cost. You get that right?
I could pay off my whole mortgage today but I won’t. Because I can do more with that money, and expect a better return than mortgage interest minus inflation. So, I refinanced. Thanks to inflation and tax deductions, my real interest rate is almost 0%.
There is no getting around the fact Bitcoin is distributed in a fabulously unequal manner.
The rest of the world is going mint a set of new global elite because they mined a stack a coins when the computational cost was tiny? If crypto dream of having Bitcoin as some global reserve currency is achieved that is what will happen.
To be honest that situation is not far off the inherited wealth of a lot of the super rich families that exist now. But at least you know somewhere along the family tree something worthwhile was achieved. Their claim to wealth is not simply being on the right internet forum in 2010.
The rest of the world is going mint a set of new global elite because they mined a stack a coins when the computational cost was tiny? If crypto dream of having Bitcoin as some global reserve currency is achieved that is what will happen.
To be honest that situation is not far off the inherited wealth of a lot of the super rich families that exist now. But at least you know somewhere along the family tree something worthwhile was achieved. Their claim to wealth is not simply being on the right internet forum in 2010.
Run for office? I prefer the trim tab approach: https://en.wikipedia.org/wiki/Trim_tab#Trim_tab_as_a_metapho...
If Bitcoiners are right, Satoshi has been the trim tab of the century thus far. Time will tell :)
If Bitcoiners are right, Satoshi has been the trim tab of the century thus far. Time will tell :)
Satoshi is likely Paul Le Roux. Let’s hope not. He’s managed to waste more of our time, money and brainpower than anyone in recent memory.
Either way my point remains that Bitcoin solves nothing other than making criminals wealthy.
Time will tell.
Either way my point remains that Bitcoin solves nothing other than making criminals wealthy.
Time will tell.
You have been grinding this axe so hard it's almost gone at this point. When BTC is 30k, 50k, 100k you will still be tilting at windmills, and no one will care. You are so wrong and incorrect on nearly everything you type, you must be an absolutely insufferable person to deal with.
I could not care less what price Bitcoin ends up at, it will not change the garbage fundamentals, or my opinion of it, nor should it change yours. There's tons of different ways to make money investing, and I stick to traditional markets. Tesla has seen a 15X increase in value over the last year, Square 20X since 2016.
I suspect I may be insufferable when I see something that's just a giant waste of time, power, energy, effort and brain power, and I'm not mad about that.
I do wish you the best of luck making money, however you choose to do so!
I suspect I may be insufferable when I see something that's just a giant waste of time, power, energy, effort and brain power, and I'm not mad about that.
I do wish you the best of luck making money, however you choose to do so!
Seems like everything is hitting all-time highs. Housing prices, stock market, bitcoin.
If you have a lot of assets, it's honestly the best time. Especially if you owned a lot of tech stocks the past decade.
If covid and the worldwide economic disruption can't put a dent in asset prices, then what will happen when the pandemic passes and the economy recovers in the next few years? I used to laugh when people said bezos or elon might be the first trillionaire in a few years, but now I think it's possible. Just have to cross your fingers and hope the good times continue.
If you have a lot of assets, it's honestly the best time. Especially if you owned a lot of tech stocks the past decade.
If covid and the worldwide economic disruption can't put a dent in asset prices, then what will happen when the pandemic passes and the economy recovers in the next few years? I used to laugh when people said bezos or elon might be the first trillionaire in a few years, but now I think it's possible. Just have to cross your fingers and hope the good times continue.
> If covid and the worldwide economic disruption can't put a dent in asset prices, then what will happen when the pandemic passes and the economy recovers in the next few years?
Pure speculation, and I am not an economist, but I'd imagine that those with wealth will acquire more wealth. And those without wealth will encounter more difficult means to acquiring wealth.
The last time the housing market crashed, investors bought a lot of the single family homes to use as wealth storage and rent them out. If housing prices go down or stabilize (we'll see what happens after forbearance periods), this will most certainly happen again, consolidating more wealth to the top while market rates for rent steadily climb. Housing shortages are high, and growing in the US. Other assets like stocks will likely increase as they have done, but entering into this market will be more difficult as consumers are spending more of their income on necessities (shelter, cars in the US, etc). All of which are becoming more expensive, and funnily enough, these assets aren't included in the Consumer Price Index, which is meant to measure inflation.
Basically, I just see this as expediting wealth consolidation. Times will be more difficult for a lot of people for a long time. Strong cultural shifts and policy changes will likely be needed to avoid furthering the divide of the wealth gap. Neither of which is easy.
Pure speculation, and I am not an economist, but I'd imagine that those with wealth will acquire more wealth. And those without wealth will encounter more difficult means to acquiring wealth.
The last time the housing market crashed, investors bought a lot of the single family homes to use as wealth storage and rent them out. If housing prices go down or stabilize (we'll see what happens after forbearance periods), this will most certainly happen again, consolidating more wealth to the top while market rates for rent steadily climb. Housing shortages are high, and growing in the US. Other assets like stocks will likely increase as they have done, but entering into this market will be more difficult as consumers are spending more of their income on necessities (shelter, cars in the US, etc). All of which are becoming more expensive, and funnily enough, these assets aren't included in the Consumer Price Index, which is meant to measure inflation.
Basically, I just see this as expediting wealth consolidation. Times will be more difficult for a lot of people for a long time. Strong cultural shifts and policy changes will likely be needed to avoid furthering the divide of the wealth gap. Neither of which is easy.
> Housing shortages are high, and growing in the US.
“Based on currently available numbers, there are about 31 vacant housing units for every homeless person in the U.S.”
https://checkyourfact.com/2019/12/24/fact-check-633000-homel...
“Based on currently available numbers, there are about 31 vacant housing units for every homeless person in the U.S.”
https://checkyourfact.com/2019/12/24/fact-check-633000-homel...
> Just have to cross your fingers and hope the good times continue.
If you've got time for it between working two jobs and driving Uber to make rent, of course.
If you've got time for it between working two jobs and driving Uber to make rent, of course.
It missed breaking the all time high on most exchanges, such as Coinbase Pro. There the all time high from 2017 was $19,892 and the highest price so far today was $19,873.
If it breaks over $20k I expect a new wave of publicity that will drive the price higher, as has happened in the past. Now it is far more accessible as an impulse buy with PayPal, Robinhood, Cash app, etc offering instant purchases.
If it breaks over $20k I expect a new wave of publicity that will drive the price higher, as has happened in the past. Now it is far more accessible as an impulse buy with PayPal, Robinhood, Cash app, etc offering instant purchases.
Look at the bitcoin CME futures. The all time open was 20650, and went straight down from there. Closing over that is key for sustained upside
Cryptocurrency is still a misunderstood concept for many ppl in the financial world. As use and integration increases, btc will likely stabilise. Meanwhile, we get interesting volatility.
Like what? What economic value do cryptocurrencies provide over our traditional banking system?
- being deflationary is not a feature, it's a bug. An inflationary currency incentivises you to invest it, otherwise you lose real purchasing power. With a deflationary currency, you can just stuff it anywhere and see gains. You steal from tomorrow. As the material wealth of the world increases, our money supply should increase to match. AFAIK there isn't any popular crypto that can easily adjust how many tokens are mined each year.
- almost every crypto's transaction throughput is ~4 orders of magnitude below what Amex/Mastercard/Visa can process.
- most of the ease of using crypto is only because it bypasses AML/KYC laws. Venmo and Zelle would be far more convenient otherwise.
I can't see it as anything other than speculation.
- being deflationary is not a feature, it's a bug. An inflationary currency incentivises you to invest it, otherwise you lose real purchasing power. With a deflationary currency, you can just stuff it anywhere and see gains. You steal from tomorrow. As the material wealth of the world increases, our money supply should increase to match. AFAIK there isn't any popular crypto that can easily adjust how many tokens are mined each year.
- almost every crypto's transaction throughput is ~4 orders of magnitude below what Amex/Mastercard/Visa can process.
- most of the ease of using crypto is only because it bypasses AML/KYC laws. Venmo and Zelle would be far more convenient otherwise.
I can't see it as anything other than speculation.
> An inflationary currency incentivises you to invest it, otherwise you lose real purchasing power. With a deflationary currency, you can just stuff it anywhere and see gains. You steal from tomorrow. As the material wealth of the world increases, our money supply should increase to match.
You don't understand the WHY of those gains.
A deflationary environment is the only real environment, that is why central banks are set up to fight deflation, because deflation is the natural order of things.
And in that real environment, gains in productivity are only possible because of savings, people invest not because of fear, the investments takes place because people truly believe the business proposals will produce VALUE, and hence REAL GAINS, which necessitates that people be not drowning in debt. That is why an inflationary system is a bubble system, it cannot be sustained on its own. It is a perpetual motion machine, or tries to be anyways.
Society has made a lot of progress, but the price has been an unprecedented amount of debt. In essence, we've mortgage the future, and at some point those bills will be paid either by will of by force.
You don't understand the WHY of those gains.
A deflationary environment is the only real environment, that is why central banks are set up to fight deflation, because deflation is the natural order of things.
And in that real environment, gains in productivity are only possible because of savings, people invest not because of fear, the investments takes place because people truly believe the business proposals will produce VALUE, and hence REAL GAINS, which necessitates that people be not drowning in debt. That is why an inflationary system is a bubble system, it cannot be sustained on its own. It is a perpetual motion machine, or tries to be anyways.
Society has made a lot of progress, but the price has been an unprecedented amount of debt. In essence, we've mortgage the future, and at some point those bills will be paid either by will of by force.
Deflation reduces the velocity of money (why spend something now when you can spend less for the same thing later). This creates a negative feedback cycle which reduces economic activity and worse it increases inequality.
This happens because the poor continue to transact hand to mouth and are unable to save while the wealthy accreted value on their idle cash. Invested cash creates economic activity. The cash in your mattress does not. The opposite is true in a deflationary environment.
Debt in an inflationary environment benefits the debtor, as the loans are denominated in the dollars at the time of loan issuance. To the extent that the economy grows faster than your debt load you do not in fact ever have to pay it off.
This happens because the poor continue to transact hand to mouth and are unable to save while the wealthy accreted value on their idle cash. Invested cash creates economic activity. The cash in your mattress does not. The opposite is true in a deflationary environment.
Debt in an inflationary environment benefits the debtor, as the loans are denominated in the dollars at the time of loan issuance. To the extent that the economy grows faster than your debt load you do not in fact ever have to pay it off.
To be fair, society already has prevalent deflationary capital - real estate.
To date since the 1970s, on average, on an inflation adjusted dollars per square foot basis, the price of real estate in the US has not changed. It’s not really deflationary since you can always build up (except where city councils tip the scales and prevent construction like SF).
Any deflationary nature is a council level imposition on an otherwise pretty neutral asset class.
Any deflationary nature is a council level imposition on an otherwise pretty neutral asset class.
By that definition Bitcoin is a neutral asset class as well since it's deflationary nature is also artificially imposed.
> the price of real estate in the US has not changed.
That's just ludicrous.
> the price of real estate in the US has not changed.
That's just ludicrous.
No, it’s well documented. [1] That data is captured by the BLS.
> By that definition Bitcoin is a neutral asset class as well since it's deflationary nature is also artificially imposed.
Deflationary is not neutral, it’s deflationary. That’s an artificial imposition of directionality. Further that’s only in isolation. Once you consider the economy expanding and contracting around it, externalities, shocks and the addition and removal of market participants - and loss of coins - its claim to neutrality is like that of a baby fighting Muhammad Ali. It requires positive control to match market conditions. It’s only neutral if you pretend the rest of the world and the economy don’t exist.
[1] https://www.google.com/amp/s/fee.org/articles/new-homes-toda...
> By that definition Bitcoin is a neutral asset class as well since it's deflationary nature is also artificially imposed.
Deflationary is not neutral, it’s deflationary. That’s an artificial imposition of directionality. Further that’s only in isolation. Once you consider the economy expanding and contracting around it, externalities, shocks and the addition and removal of market participants - and loss of coins - its claim to neutrality is like that of a baby fighting Muhammad Ali. It requires positive control to match market conditions. It’s only neutral if you pretend the rest of the world and the economy don’t exist.
[1] https://www.google.com/amp/s/fee.org/articles/new-homes-toda...
I don't follow you.
Normally, real estate markets are tracked in isolation.
Normally, real estate markets are tracked in isolation.
What I was saying is that on average real estate is not deflationary, it tracks inflation, and there’s data to back that. In specific instances of markets where it is deflationary it’s not due to intrinsic qualities of the asset class but rather externalities.
Fine, but we generally don't average out values nationally to price homes.
We don't take home values from the Detroit market, Beverly Hills market and San Antonio market to price a house in New York.
Real estate is deflationary because each asset is unique - like fine art or a 1 in millions baseball card misprint.
We don't take home values from the Detroit market, Beverly Hills market and San Antonio market to price a house in New York.
Real estate is deflationary because each asset is unique - like fine art or a 1 in millions baseball card misprint.
> Fine, but we generally don't average out values nationally to price homes.
Not home prices, but the trend in home prices. I think we do, that's why the BLS is tracking this number. I don't work in the industry though, so I can't say for sure.
> Real estate is deflationary because each asset is unique - like fine art or a 1 in millions baseball card misprint.
Respectfully I disagree. Real estate is only deflationary if you're looking at the square footage on the ground alone, but if you can build up a practically unlimited amount (and we really, really can) then it's not a relevant thing to look at. Each square foot on the ground turns into more and more square feet of real estate over time as you build higher and higher.
Not home prices, but the trend in home prices. I think we do, that's why the BLS is tracking this number. I don't work in the industry though, so I can't say for sure.
> Real estate is deflationary because each asset is unique - like fine art or a 1 in millions baseball card misprint.
Respectfully I disagree. Real estate is only deflationary if you're looking at the square footage on the ground alone, but if you can build up a practically unlimited amount (and we really, really can) then it's not a relevant thing to look at. Each square foot on the ground turns into more and more square feet of real estate over time as you build higher and higher.
> why spend something now when you can spend less for the same thing later
That is nonsense. Sadly by repeating it enough people have started to actually believe it, and repeat it without looking at the evidence of the real world.
A cheap pair of jeans, adjusted for inflation was ~$150 in 1980. Now you can get one for $10. Did no one wore jeans for 40 years? Meat, it has never been so cheap IN HISTORY to buy meat, and if the trend continues, next year you could buy even more meat with the same money! (adjusting for inflation of course) Are you not gonna eat for a year?
That is not even talking about tech, were a cheap laptop 20 years ago adjusted for inflation was over $1000 and now is $300.
People prefer things now not later, that is why if you offer them $50 today instead of $100 in 10 $10 monthly payments most people pick the $50. The same thing happens when buying stuff. Sadly evidence is not as marketable as propaganda.
So as I said, nonsense.
That is nonsense. Sadly by repeating it enough people have started to actually believe it, and repeat it without looking at the evidence of the real world.
A cheap pair of jeans, adjusted for inflation was ~$150 in 1980. Now you can get one for $10. Did no one wore jeans for 40 years? Meat, it has never been so cheap IN HISTORY to buy meat, and if the trend continues, next year you could buy even more meat with the same money! (adjusting for inflation of course) Are you not gonna eat for a year?
That is not even talking about tech, were a cheap laptop 20 years ago adjusted for inflation was over $1000 and now is $300.
People prefer things now not later, that is why if you offer them $50 today instead of $100 in 10 $10 monthly payments most people pick the $50. The same thing happens when buying stuff. Sadly evidence is not as marketable as propaganda.
So as I said, nonsense.
Those things got cheaper because of advances in supply chains and technology.
I mean you can just do the simple mathematics. Suppose there are 100 utility units of wealth in the world - machinery, homes, anything tangible to improve lives - and 100 units of currency to match. Through human labour we produce another 100 utility units. Now each unit of currency can provide me 2 utility units. This is just a system that rewards wealth more than work, even more so than our current system.
Let's look at capital flows. Why in the world would I ever loan to a small business if I could see gains just by holding the money? Why would I ever give companies money in IPOs? There is much less of an incentive to direct capital to those who can be the most productive with it.
I mean you can just do the simple mathematics. Suppose there are 100 utility units of wealth in the world - machinery, homes, anything tangible to improve lives - and 100 units of currency to match. Through human labour we produce another 100 utility units. Now each unit of currency can provide me 2 utility units. This is just a system that rewards wealth more than work, even more so than our current system.
Let's look at capital flows. Why in the world would I ever loan to a small business if I could see gains just by holding the money? Why would I ever give companies money in IPOs? There is much less of an incentive to direct capital to those who can be the most productive with it.
> Those things got cheaper because of advances in supply chains and technology.
That is why things get cheaper all the time, yes.
> Why in the world would I ever loan to a small business if I could see gains just by holding the money?
The same reason you do now, which is the only reason you ever lend money: by lending it (to someone more productive than yourself of course) you gain more.
That is why things get cheaper all the time, yes.
> Why in the world would I ever loan to a small business if I could see gains just by holding the money?
The same reason you do now, which is the only reason you ever lend money: by lending it (to someone more productive than yourself of course) you gain more.
You have to compare it to your risk free return lol
the return on holding is not risk free. in the absence of progress money will be inflationary as there are more people competing for fewer goods. there's no free lunch
lol that’s what happens when technology increases productivity. I actually addressed all this. Staples will continue to be purchased hand to mouth leaving the poor unable to benefit from deflation while the rich sit on their idle cash and grow their largesse without increasing economic activity.
> I actually addressed all this.
No, you repeated propaganda that told you to think you did, but as with the rest of your “points”, too many lols very little substance.
> that’s what happens when technology increases productivity.
Not when, technology ALWAYS increases productivity, that is the point of technology. Deflation is inevitable because productivity increases are inevitable.
And the poor have benefitted immensely from deflation, despite central banks doing everything they can to rob you of its benefits. More people than ever can now afford to eat meat, or drink single malt scotch, or whatever. More people eat lobster now than in any other time in history, that is the power and benefit of deflation.
No, you repeated propaganda that told you to think you did, but as with the rest of your “points”, too many lols very little substance.
> that’s what happens when technology increases productivity.
Not when, technology ALWAYS increases productivity, that is the point of technology. Deflation is inevitable because productivity increases are inevitable.
And the poor have benefitted immensely from deflation, despite central banks doing everything they can to rob you of its benefits. More people than ever can now afford to eat meat, or drink single malt scotch, or whatever. More people eat lobster now than in any other time in history, that is the power and benefit of deflation.
[citation needed]
> Not when, technology ALWAYS increases productivity, that is the point of technology.
Well, not bitcoin lol, it's anti-efficient.
> Not when, technology ALWAYS increases productivity, that is the point of technology.
Well, not bitcoin lol, it's anti-efficient.
I have seen a 1 million tx per second on bitcoin lightning demos.
USD dollar hasn't seen intense inflation recently. Or a kleptocratic government like most of the world.
That said there are large issues using it as a payment mechanism due to volatility in USD.
USD dollar hasn't seen intense inflation recently. Or a kleptocratic government like most of the world.
That said there are large issues using it as a payment mechanism due to volatility in USD.
>An inflationary currency incentivises you to invest it
Still not convinced that is a good thing. It perpetuates a cycle that rewards people who already have excess income to "invest" and keep making more money. Meanwhile those without any significant income to invest are left even further in the dust.
I'm not arguing for crypto at all here- just commenting specifically on that inflationary point.
Still not convinced that is a good thing. It perpetuates a cycle that rewards people who already have excess income to "invest" and keep making more money. Meanwhile those without any significant income to invest are left even further in the dust.
I'm not arguing for crypto at all here- just commenting specifically on that inflationary point.
How would anyone get capital to do anything if you could see 5% gains just sitting on the money? How many fewer tech giants and unicorns would we see?
We already know what happens when people aren't incentivised to invest - it's called a recession.
We already know what happens when people aren't incentivised to invest - it's called a recession.
>if you could see 5% gains just sitting on the money
Who said 5% sitting on money? I'm talking about a situation where there is basically no real inflation or deflation. $100 is $100. You can still choose to take your money and invest it if you want, but you aren't forced to GAMBLE your money (you can use the word invest all you want, but 99% of the time it's simply gambling).
>How many fewer tech giants and unicorns would we see?
So first of all, you are completely butchering what I said per above.. but in any case, maybe that's a good thing not to see all the tech giants and unicorns? People are so obsessed with doing things so they can "make it big" it's really just sad. HN in particular, I see it all the time here. All most people seem to care about is trying to make the most money possible and less about things that are actual helpful.
Greed is a hell of a drug.
>We already know what happens when people aren't incentivized to invest - it's called a recession.
That is quite a stretch. You will always have people that want to gamble their money. My point is you should not be FORCED to gamble your money to play the game the rich people who set the rules want you to.
Who said 5% sitting on money? I'm talking about a situation where there is basically no real inflation or deflation. $100 is $100. You can still choose to take your money and invest it if you want, but you aren't forced to GAMBLE your money (you can use the word invest all you want, but 99% of the time it's simply gambling).
>How many fewer tech giants and unicorns would we see?
So first of all, you are completely butchering what I said per above.. but in any case, maybe that's a good thing not to see all the tech giants and unicorns? People are so obsessed with doing things so they can "make it big" it's really just sad. HN in particular, I see it all the time here. All most people seem to care about is trying to make the most money possible and less about things that are actual helpful.
Greed is a hell of a drug.
>We already know what happens when people aren't incentivized to invest - it's called a recession.
That is quite a stretch. You will always have people that want to gamble their money. My point is you should not be FORCED to gamble your money to play the game the rich people who set the rules want you to.
Volatility is its principal feature in the financial world.
Yeah, but does that necessarily HAVE TO apply to "currency"?
Not in my opinion haha but it’s not really a currency.
It can not stabilize the block reward pays for the mining the fees are almost irrelevant. block reward halves every 4 year so the price has to double at least every 4 year.
if it does not it will become lucrative to do double spends at some point.
Its designed to crash some day because there is no endless doubling at constant time.
"Almost relevant" is more like it [1].
We can expect fees to dominate the block reward in about 3-4 halvings. Which will unfortunately lead to some instability [2].
[1] https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.h...
[2] https://www.cs.princeton.edu/~arvindn/publications/mining_CC...
[1] https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.h...
[2] https://www.cs.princeton.edu/~arvindn/publications/mining_CC...
Thats simply nonsense the only way fees could ever pay for it would be if transaction become extremely expensive. You can calculate yourself how much a Tx would have to cost if it should replace the current block reward.
6.25 BTC every 10 min that's currently about 120k USD. If we assume 4200 Tx in that time which is very unlikely it would result in roughly 30 bucks per Tx if and only if the network is on max load 24/7 which basically means a way higher fee to get Tx trough in a meaningful time.
ofc its possible but who would want that anyway. Tx are already moved off chain because the current fees are already too much for most transactions.
Combined that with the fact that almost all people who hold, mine or otherwise use BTC do so because it gains in value. If it stops doing that there is even less reason to move BTCs around and justify high transaction costs.
The sole reasons it doesn't matter now is because the average gains is so high it covers all that cost. If the gains are gone it over in the long run.
A collective of user literally must spend 120k USD every 10 min to keep that thing running. That money indirectly comes from price gains there is absolutely nothing else there. The people who just want to move value "fast" and "cheap" dont need BTC they switch to whatever is the best at a time. There is no way they will do 30 bucks transactions if the alternatives can do it for fractions of a cent. Even if some hypothetical risk is higher for other coins. Some kind of insurance will cover that and wont cost 30 bucks per transaction.
> Meanwhile, we get interesting volatility.
Rather than an attempt at designing a currency with really desirable properties, it seems like intent behind bitcoin was to take the WORST aspects of currency: scarcity, extreme volatility, unground it from reality, and computerize all that to make it even faster and more reckless.
Economic crashes devaste the working class when inflation skyrockets or goes into manic up-down bulimic cycles that seem to benefit only financiers. ... Yet this is what people have made as a _CENTRAL_ feature of cryptocurrency?
Bitcoin/crypto-currency makes me question even the most fundamental notions of what money "is". Whatever it becomes, I wish that crypto-currency was just a way to exchange goods and services with some useful features rather than a thrill-toy for wealthy speculators. I guess that would be too boring for people?
Rather than an attempt at designing a currency with really desirable properties, it seems like intent behind bitcoin was to take the WORST aspects of currency: scarcity, extreme volatility, unground it from reality, and computerize all that to make it even faster and more reckless.
Economic crashes devaste the working class when inflation skyrockets or goes into manic up-down bulimic cycles that seem to benefit only financiers. ... Yet this is what people have made as a _CENTRAL_ feature of cryptocurrency?
Bitcoin/crypto-currency makes me question even the most fundamental notions of what money "is". Whatever it becomes, I wish that crypto-currency was just a way to exchange goods and services with some useful features rather than a thrill-toy for wealthy speculators. I guess that would be too boring for people?
Can someone explain why BTC going from 13k to 20k in a month isn't the yearly pump and dump?
It's probably more reflective of inflation and the dollar losing value, which is the natural consequence of dropping interest rates to zero and pumping $6T more into the economy. TSLA has gone from $191 to $576 since June, GOOG from $1394->$1761, AMZN $2478->$3143, ZM $262->$466. Where I'm at restaurant meals have gone from about $13/plate to $20/plate, and houses have gone from ~$1.6M -> $2.1M.
BTC's rise isn't all that out of line with any of those. I think you're seeing investors rush out of dollars and into anything that'll have hard value in the digital economy going forward. Inflation doesn't hit all markets evenly, so you may not see it in your paycheck yet (if you still have a paycheck) and areas without a lot of people seeing money come in won't have prices rise as much. But I think you should read this as a currency crisis for the dollar, not a bubble for Bitcoin.
BTC's rise isn't all that out of line with any of those. I think you're seeing investors rush out of dollars and into anything that'll have hard value in the digital economy going forward. Inflation doesn't hit all markets evenly, so you may not see it in your paycheck yet (if you still have a paycheck) and areas without a lot of people seeing money come in won't have prices rise as much. But I think you should read this as a currency crisis for the dollar, not a bubble for Bitcoin.
Inflation has a specific definition with reference to the cost of a set basket of goods and rent. An increase in the price of assets and assets alone as a result of an increase in money supply is not inflation.
That's the definition of the CPI. The definition of inflation that an individual cares about is "the rise in prices of the goods that I want to buy". Asset purchases, housing, and food are my biggest expenses. YMMV.
I gave some examples of consumer goods inflating in my post - restaurant meals are up about 40%, housing up about 18%, groceries have also been up about 20% since the pandemic started. Also have friends that own or work in non-tech businesses (one owns a packaging factory, another sells hot tubs) that say that supply chains are in shambles and all of their producer prices are going up, significantly. You'll see that in consumer prices eventually, but it takes time to work its way through the economy.
I gave some examples of consumer goods inflating in my post - restaurant meals are up about 40%, housing up about 18%, groceries have also been up about 20% since the pandemic started. Also have friends that own or work in non-tech businesses (one owns a packaging factory, another sells hot tubs) that say that supply chains are in shambles and all of their producer prices are going up, significantly. You'll see that in consumer prices eventually, but it takes time to work its way through the economy.
Asset purchases are not inflation related. If Apple goes up because their business is doing well, that’s not inflation, that’s a good investment. You need to tease apart the performance of the underlying to even get a sense of how the money supply is impacting prices. I’d love to see a study. However simply seeing stonks go up doesn’t mean inflation.
If I had to speculate the current market froth has more to do with individuals access to leveraged investments via smartphone apps like Robinhood. The pandemic has turned them into a generation of gamblers. When you buy options from a market maker they hedge by purchasing the underlying. This has a positive feedback cycle effect causing them to purchase more and more to hedge. Look up a gamma squeeze.
https://realmoney.thestreet.com/investing/stocks/is-the-gamm...
If I had to speculate the current market froth has more to do with individuals access to leveraged investments via smartphone apps like Robinhood. The pandemic has turned them into a generation of gamblers. When you buy options from a market maker they hedge by purchasing the underlying. This has a positive feedback cycle effect causing them to purchase more and more to hedge. Look up a gamma squeeze.
https://realmoney.thestreet.com/investing/stocks/is-the-gamm...
Generally house prices are a ~somewhat decent proxy for asset inflation which is driven by monetary policy; I believe the low rates have definitely driven inflation in housing prices (and the gamma squeeze argument above does not apply to the housing market).
Part of the reason we've had an insane housing market valuation growth over the last ~40 years is that cost of capital has gone down from ~15% to 2.5% over that time frame. If rates were near the historical average right now, you would see very different asset prices.
Part of the reason we've had an insane housing market valuation growth over the last ~40 years is that cost of capital has gone down from ~15% to 2.5% over that time frame. If rates were near the historical average right now, you would see very different asset prices.
Housing prices on an inflation adjusted dollars per square foot basis are the exact same now, on average, as they were in the 1970s across the US. [1]
A few things have changed. One is in choice few major metros, like SF, city councils abjectly refuse to allow new construction taller than existing construction to the benefit of landowners. This artificial supply constraint is pretty much solely responsible for the massive increase in pricing in these metros.
The other thing that’s changed is minimum setback rules, minimum sizing rules, and various other council ordinances - in addition to what Americans consider a suitable home for their living situation. As such new homes are on average twice as big now as they were in the 1970s.
Make no mistake though the average price per square foot for a home in the United States has tracked inflation almost precisely for the last 50 years.
This is purely supply, demand and artificial constraints - not monetary policy. Compare to Tokyo where housing downtown is a few hundred thousand dollars. I suspect if interest rates were lower you’d see smaller houses, not cheaper ones - that’s what happened there!
[1] https://fee.org/articles/new-homes-today-have-twice-the-squa...
A few things have changed. One is in choice few major metros, like SF, city councils abjectly refuse to allow new construction taller than existing construction to the benefit of landowners. This artificial supply constraint is pretty much solely responsible for the massive increase in pricing in these metros.
The other thing that’s changed is minimum setback rules, minimum sizing rules, and various other council ordinances - in addition to what Americans consider a suitable home for their living situation. As such new homes are on average twice as big now as they were in the 1970s.
Make no mistake though the average price per square foot for a home in the United States has tracked inflation almost precisely for the last 50 years.
This is purely supply, demand and artificial constraints - not monetary policy. Compare to Tokyo where housing downtown is a few hundred thousand dollars. I suspect if interest rates were lower you’d see smaller houses, not cheaper ones - that’s what happened there!
[1] https://fee.org/articles/new-homes-today-have-twice-the-squa...
You are talking specifically about consumer price inflation, which is as you state a well-specified concept based on a (hilariously disconnected from reality) weighted basket of goods and how the basket's price changes over time.
Inflation as a concept itself is much broader than this.
The comment you're replying to is referring to asset price inflation, which has been happening hardcore.
You seem to be saying since the Fed's stupid basket hasn't shot up in price (based on what they're saying), that inflation hasn't happened?
Inflation as a concept itself is much broader than this.
The comment you're replying to is referring to asset price inflation, which has been happening hardcore.
You seem to be saying since the Fed's stupid basket hasn't shot up in price (based on what they're saying), that inflation hasn't happened?
I’m saying CPI inflation (which is what people mean when they say inflation) has not gone up. I suggest that to prevent confusion among the readers that folks using a nonstandard (or at least non-colloquial) definition of inflation should make that clear.
Patio11's take: (2019)
"Credit bubble? Yes, there can no longer be serious doubt about this: people bought Bitcoin with money that didn’t exist, pushing up the price of Bitcoin. A lot of people currently think they are richer than they are."
https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/
I'd be interested in reading a counter-take, most bitcoiners I know just look away.
"Credit bubble? Yes, there can no longer be serious doubt about this: people bought Bitcoin with money that didn’t exist, pushing up the price of Bitcoin. A lot of people currently think they are richer than they are."
https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/
I'd be interested in reading a counter-take, most bitcoiners I know just look away.
Yes, free money inflates risky assets, but it's also just supply and demand. Mining rewards got halved, so miners can't sell as many BTC as used to do after mining a block, so the supply of BTC just went down significantly.
The more macro stuff like worries about inflation due to the Fed printing $$$, easy money (0% interest rates), and yes, some FOMO speculation is increasing demand.
As far as I'm concerned this is working as intended. This is not the first boom / bust and this won't be the last.
The more macro stuff like worries about inflation due to the Fed printing $$$, easy money (0% interest rates), and yes, some FOMO speculation is increasing demand.
As far as I'm concerned this is working as intended. This is not the first boom / bust and this won't be the last.
Tether has accounting problems and remains a systemic risk. But this is mitigated by several factors. First, they are semi-audited and most educated guesses suggest they are collateralized one-to-one with $ at 70% or more. Second, tethers have become less systemically important over time, as other, better audited (or collateralized) stables have taken market share — this trend will likely continue. Third, tether brr doesn't compare to Fed brr and never will be able to, so ultimately, this won't matter in the long run.
Sources I’ve seen say Tether has been completely un-audited for years and only a fool will think they’ll keep collateral dollars for their Ponzi scheme.
Any sources for this? I've been trying to read up to understand how / when Binance decides to print USDT and what they do with it once it's on their exchange.
e.g., https://twitter.com/whale_alert/status/1333809716301094912
e.g., https://twitter.com/whale_alert/status/1333809716301094912
Tony Arcieri's take is pretty good, too, and extremely succinct https://twitter.com/bascule/status/1329580017446047748
I'm late for an appointment, but...
I'm reminded of the example of the closing years of the Kuomintang in China, where they were suffering from massive hyperinflation. Small businesses and co-ops would bet temporary loans from the central government in its banknotes but immediately change it to silver if possible to do business with, so they wouldn't have to deal with the debasement of the real currency over the course of the year.
I'm reminded of the example of the closing years of the Kuomintang in China, where they were suffering from massive hyperinflation. Small businesses and co-ops would bet temporary loans from the central government in its banknotes but immediately change it to silver if possible to do business with, so they wouldn't have to deal with the debasement of the real currency over the course of the year.
More on ramps and institutional investors buying in seems to be a big part of it.
This "institutional investors" meme is a bit like God: no one can prove it, but it gives its believers all the hope. There is no evidence of that happening on massive scale and no reason for them to do so.
https://www.coindesk.com/investment-giant-alliancebernstein-...
American institutions are definitely going in. It's a solid ponzi, why would they shun that one when they went in all the others?
American institutions are definitely going in. It's a solid ponzi, why would they shun that one when they went in all the others?
The PayPal integration of cryptocurrencies had a huge positive impact. Also more large institutions are diversifying their portfolio into Bitcoin.
Bitcoin is a hedge on the US dollar, so people probably suspect the economy will go down since Biden won.
Is that why Dow hit 30,000? Because investors are bearish on a Biden economy?
Holding stocks is also a hedge on the USD, not unlike bitcoin.
Perhaps the market is expecting more money printing.
Perhaps the market is expecting more money printing.
I posted this in the other thread from today that briefly hit the front page:
Bitcoin is a social phenomena - no government or company backs it. The only reason it has value is if people value it. Bitcoin promoters have convinced people it's a store of value, like gold except digital. As the Cult of Bitcoin spreads, it doesn't take that many new enthusiasts to push the price up, as unlike literally all other commodities on earth, the supply of bitcoin is truly constrained and there cannot be anymore made in response to demand above the normal rate of inflation.
This time, big money, institutions, and the very rich are coming in addition to the widespread purchase by retail. The price is going to rise a lot.
Bitcoin is a social phenomena - no government or company backs it. The only reason it has value is if people value it. Bitcoin promoters have convinced people it's a store of value, like gold except digital. As the Cult of Bitcoin spreads, it doesn't take that many new enthusiasts to push the price up, as unlike literally all other commodities on earth, the supply of bitcoin is truly constrained and there cannot be anymore made in response to demand above the normal rate of inflation.
This time, big money, institutions, and the very rich are coming in addition to the widespread purchase by retail. The price is going to rise a lot.
Bitcoin is a Bitfinex and Tether phenomenon. Since the Tether article was posted a few weeks ago another $2B fake dollars have been generated and used to buy Bitcoin. This absolutely and completely dwarfs the pennies Square and PayPal threw into the wishing well.
Tether is a cornerstone of the crypto industry. You can post some random blog posts here but Tether is actually used by trading firms, and can be minted and redeemed through their portal here https://app.tether.to/app/login
The Tether FUD is so dumb, but it's the last straw being grasped by perma-bears.
The Tether FUD is so dumb, but it's the last straw being grasped by perma-bears.
Nonsense. Tether has never been redeemed, and even if it could be redeemed, there is no possible way that they could cover the balance of issued tethers.
It’s the mother of all Ponzi schemes, clearly, and is definitely going to implode in the next big pullback.
It’s the mother of all Ponzi schemes, clearly, and is definitely going to implode in the next big pullback.
These accusations against Tether are very outdated. Read Matt Levine's take from 2019 on an ongoing lawsuit: https://www.bloomberg.com/opinion/articles/2019-04-26/things...
The quintessential part is this: The New York attorney general’s filing refutes the extreme version of those doubts — Tether mostly had the dollars — but it is nonetheless a wild ride that alleges that Tether’s backing might not be as good as it claims.
The quintessential part is this: The New York attorney general’s filing refutes the extreme version of those doubts — Tether mostly had the dollars — but it is nonetheless a wild ride that alleges that Tether’s backing might not be as good as it claims.
That article was written $16 billion imaginary dollars ago. Things move fast in the BVI.
This. I’d like to see evidence that Tether have an additional $16B USD in guaranteed cash to cover their commitments.
You have no idea what you are talking about and are just spreading more FUD.
https://www.theblockcrypto.com/post/48857/former-head-of-cir...
I worked with Dan, I worked at Circle, we redeemed / minted billions and billions with Tether.
https://www.theblockcrypto.com/post/48857/former-head-of-cir...
I worked with Dan, I worked at Circle, we redeemed / minted billions and billions with Tether.
Oh I didn’t realize Dan was an auditor. Which of the big ones does he work at? KPMG? Deloitte? PwC?
This is a classic strategy employed by scammers to legitimize a scam. You pick a prominent individual and you make the fraud work for them, so they can tell other people it’s legit.
Their last auditor quit, half way through the audit. No audit, no legitimacy, period.
This is a classic strategy employed by scammers to legitimize a scam. You pick a prominent individual and you make the fraud work for them, so they can tell other people it’s legit.
Their last auditor quit, half way through the audit. No audit, no legitimacy, period.
Respectfully this is a difficult claim to believe.
If your claim is that you redeemed billions of dollars in tethers for fiat USD then that’s newsworthy.
Even if that were the case though, it does nothing to prove that Tether is able to cover its commitments. Especially not with the additional $16B USD on the books.
If your claim is that you redeemed billions of dollars in tethers for fiat USD then that’s newsworthy.
Even if that were the case though, it does nothing to prove that Tether is able to cover its commitments. Especially not with the additional $16B USD on the books.
>Tether has never been redeemed
Why is this relevant when you can withdraw tethers for USD at any participating exchange? Or are you saying that None of the exchanges that support tether (eg. bitfinex) has never fulfilled a withdraw?
>It’s the mother of all Ponzi schemes, clearly, and is definitely going to implode in the next big pullback.
Sounds like a great way to make a lot of money. Tether is currently trading 1:1 with USD (yes, even at exchanges that offer real USD). It should be easy to short-sell a bunch of tether, and buy it back when in collapses. And unlike short-selling stocks, your downside should be relatively low as tethers can't realistically go above their current price.
Why is this relevant when you can withdraw tethers for USD at any participating exchange? Or are you saying that None of the exchanges that support tether (eg. bitfinex) has never fulfilled a withdraw?
>It’s the mother of all Ponzi schemes, clearly, and is definitely going to implode in the next big pullback.
Sounds like a great way to make a lot of money. Tether is currently trading 1:1 with USD (yes, even at exchanges that offer real USD). It should be easy to short-sell a bunch of tether, and buy it back when in collapses. And unlike short-selling stocks, your downside should be relatively low as tethers can't realistically go above their current price.
Why is it relevant? Really? It’s relevant because as soon as it’s clear the emperor has no clothes you wont be able to redeem it at any exchanges because it’s garbage.
> Sounds like a great way to make a lot of money. Tether is currently trading 1:1 with USD (yes, even at exchanges that offer real USD). It should be easy to short-sell a bunch of tether, and buy it back when in collapses. And unlike short-selling stocks, your downside should be relatively low as tethers can't realistically go above their current price.
All crypto exchanges are rigged casinos. The only way to win is not to play.
Tether absolutely swings up and down depending on how many people are fleeing into or out of cryptos at any given moment. We’ve seen like +5-7% and -20%. That’s enough to blow away any leveraged position.
Finally, of course, you neglect counterparty risk. I have to put up collateral on this short which any of these exchanges could simply run for the hills with, as they do, regularly. Seriously, who lets you short Tether except for Bitfinex - and what will they pay you out in, more Tether? They don’t have a bank account. That’s why they invented Tether.
> Sounds like a great way to make a lot of money. Tether is currently trading 1:1 with USD (yes, even at exchanges that offer real USD). It should be easy to short-sell a bunch of tether, and buy it back when in collapses. And unlike short-selling stocks, your downside should be relatively low as tethers can't realistically go above their current price.
All crypto exchanges are rigged casinos. The only way to win is not to play.
Tether absolutely swings up and down depending on how many people are fleeing into or out of cryptos at any given moment. We’ve seen like +5-7% and -20%. That’s enough to blow away any leveraged position.
Finally, of course, you neglect counterparty risk. I have to put up collateral on this short which any of these exchanges could simply run for the hills with, as they do, regularly. Seriously, who lets you short Tether except for Bitfinex - and what will they pay you out in, more Tether? They don’t have a bank account. That’s why they invented Tether.
> Why is it relevant? Really? It’s relevant because as soon as it’s clear the emperor has no clothes you wont be able to redeem it at any exchanges because it’s garbage.
Because if you're worried that they don't have enough real us dollars to back the USDTs that they've printed, being able to directly redeem USDT for USD isn't really going to make a difference.
>All crypto exchanges are rigged casinos. The only way to win is not to play.
That seems like an overly broad statement to make, especially there are a few exchanges that try to be as by-the-books as possible.
>Tether absolutely swings up and down depending on how many people are fleeing into or out of cryptos at any given moment. We’ve seen like +5-7% and -20%. That’s enough to blow away any leveraged position.
Or just don't leverage to the max? Short-selling $1000 worth of USDT with $1000 of USD in reserve and 3x leverage should allow you to withstand most shocks without being forced to liquidate.
>Seriously, who lets you short Tether except for Bitfinex
Kraken, for one.
>and what will they pay you out in, more Tether? They don’t have a bank account. That’s why they invented Tether.
Again, this goes back to my first comment. Are you claiming that bitfinex isn't processing fiat withdraws (eg. wire/ACH transfer to a real bank)?
Because if you're worried that they don't have enough real us dollars to back the USDTs that they've printed, being able to directly redeem USDT for USD isn't really going to make a difference.
>All crypto exchanges are rigged casinos. The only way to win is not to play.
That seems like an overly broad statement to make, especially there are a few exchanges that try to be as by-the-books as possible.
>Tether absolutely swings up and down depending on how many people are fleeing into or out of cryptos at any given moment. We’ve seen like +5-7% and -20%. That’s enough to blow away any leveraged position.
Or just don't leverage to the max? Short-selling $1000 worth of USDT with $1000 of USD in reserve and 3x leverage should allow you to withstand most shocks without being forced to liquidate.
>Seriously, who lets you short Tether except for Bitfinex
Kraken, for one.
>and what will they pay you out in, more Tether? They don’t have a bank account. That’s why they invented Tether.
Again, this goes back to my first comment. Are you claiming that bitfinex isn't processing fiat withdraws (eg. wire/ACH transfer to a real bank)?
lol go on redeem some. If you actually read their terms of service it specifically says tethers do not grant you any claim on their reserves. I’ve no doubt they’re used by exchanges that don’t want to comply with the law and follow AML/KYC. That’s the point.
Don’t carry water for these scammers they literally don’t have a bank account and admitted in court [1] much of their reserves are IOUs and crypto. Audit or gtfo (to tether inc not you).
[1] https://www.google.com/amp/s/www.theblockcrypto.com/amp/dail...
Don’t carry water for these scammers they literally don’t have a bank account and admitted in court [1] much of their reserves are IOUs and crypto. Audit or gtfo (to tether inc not you).
[1] https://www.google.com/amp/s/www.theblockcrypto.com/amp/dail...
It's all bullshit speculation. And rich people / institutions doing whatever they can to "make money" no matter what.
Am I saying crypto has no value at all and never will? No- but it's stupid that the "drive" for people to create new cryptos and hold current crypto is to uh.. make money off of it vs a currency like USD? That's stupid as hell.
Crypto that is not pegged to something like USD is made for gambling and to make the rich richer. If I were to "gamble" $1000 in crypto the last few years sure, maybe I make 50-100k. Whoopdydoo. Yeah that's great but it's not like mega life altering. Rich people can be like "Oh I'm going to throw $1 million into this.. oh look, I just made $50-100 million, now I can take this and buy a bunch of new businesses or buy my new mega mansion somewhere!". It's just sickening, honestly.
Am I saying crypto has no value at all and never will? No- but it's stupid that the "drive" for people to create new cryptos and hold current crypto is to uh.. make money off of it vs a currency like USD? That's stupid as hell.
Crypto that is not pegged to something like USD is made for gambling and to make the rich richer. If I were to "gamble" $1000 in crypto the last few years sure, maybe I make 50-100k. Whoopdydoo. Yeah that's great but it's not like mega life altering. Rich people can be like "Oh I'm going to throw $1 million into this.. oh look, I just made $50-100 million, now I can take this and buy a bunch of new businesses or buy my new mega mansion somewhere!". It's just sickening, honestly.
that...doesn't make any sense. return 50x is returning 50x. many people would be thrilled to have 50-100k. It means a better house, maybe better schools, better food, better life. and that's just in America!
Envy is the thief of joy
Envy is the thief of joy
The more money people throw at crypto the more risk they are taking. It’s actually the most equitable investment I know, open to almost anyone, and same return rates regardless of amount invested.
It was a bubble last time, and it’s a bubble this time. BTC or any other crypto currency for that matter is nowhere near passing the grandma test, and until it does it will be nothing but speculative novelty equity for the already baptized and a decent alternative for darknet drug dealers.
Ironically, the ridiculous volatility fueled by baseless speculation from people who have no idea what they’re doing is one of the main reasons why crypto currency is not being adopted, because no merchant with any serious stake takes a currency seriously that can change by tens of percent in any direction between it entering and leaving your account.
Personally I thought crypto currency was an interesting idea when I first heard of it, but now I’m completely fatigued. The eternal September has come and gone and the credibility of the whole endeavour is a guilt-by-association dumpster fire.
Ironically, the ridiculous volatility fueled by baseless speculation from people who have no idea what they’re doing is one of the main reasons why crypto currency is not being adopted, because no merchant with any serious stake takes a currency seriously that can change by tens of percent in any direction between it entering and leaving your account.
Personally I thought crypto currency was an interesting idea when I first heard of it, but now I’m completely fatigued. The eternal September has come and gone and the credibility of the whole endeavour is a guilt-by-association dumpster fire.
I have always been a bitcoin skeptic, but after reading the recent papers by Ark Invest (see ARKK etf) and listening to their CEO Cathie Wood I started adding it to my portfolio.
Unpopular opinion: Cathie Wood seems to buy into whatever hype is currently trending. She does not seem to have a deep understanding as to why some of her holdings will outperform.
However, she's invested in hundreds of companies, and it would be nearly impossible to do so at that point.
However, she's invested in hundreds of companies, and it would be nearly impossible to do so at that point.
What points were made that changed your mind?
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Sound like a new bubble?
Been waiting a couple years for crypto to be a topic on HN again. People still don't get it.
I learned a new term used on HN yesterday, 'bikeshedding'. It perfectly applies to bitcoin/blockchain.
I learned a new term used on HN yesterday, 'bikeshedding'. It perfectly applies to bitcoin/blockchain.
How?
How is there bikeshedding? Almost all arguments people make against bitcoin are pointless. I.e. the fees being high, transaction time being low, transactions per second, ect
Blockchain is a disruptive technology on the same level as the invention of the Internet. It is the first global, transparent, immutable ledger. We are only just beginning discovery on what we can do/improve from here.
Blockchain is a disruptive technology on the same level as the invention of the Internet. It is the first global, transparent, immutable ledger. We are only just beginning discovery on what we can do/improve from here.
True, people debate on these little details and none of them matter, they will be solved one way or another. It's guaranteed that cryptocurrencies are here to stay. Most people don't understand that cryptos in their current form is just the base and when more and more money start building on top of it that's when we will see the real internet 3.0 and all the amazing things you can do with it. It takes some imagination to see what's possible.
Would be great to short-sell right now, but that's almost impossible to do the last I checked.
Used to be the case in 2017, but no longer true. You're more than welcome to get burned if you short into a hyped bull market.
It's one thing to piss on btc on hacker news but would you really put up money shorting it? There are multiple ways to do so.
You can short crypto at many places, with 100x leverage. See Poloniex, Binance, Bitmex, etc.
I love crypto post on HN - never seen more grayed out comments in my life!
Would be interesting to see how the comments change colour over time. A while back, when I used to read and reply to a few comments on the topic, I reckoned there was a bit of a pattern to voting - non-believer comments would turn light gray almost instantly, but then get well into the black over time, like there was a small but very quick and fanatical group on the believer side trying to eliminate any dissent, but a much larger and slower group of non-believers who reign out in the long term. That was a while ago, so I don't know if it is the same now. These days I treat blockchain and cryptocurrencies like politics and religion - best not talk about them in polite company.
You should! This is not Reddit - we are all professionals here and we know what Bitcoin is and what it isn't!
bilater(2)
I remember a guy who boasted putting his entire life savings into Bitcoin during a crypto meetup. I wonder how he's doing.
It's always fun when you meet new techy people and you get comfortable enough to share your "I didn't get rich" Bitcoin stories: "I sold at $600 because it seemed like a lot at the time", "I bought a pizza with the ones I CPU mined", or "I had one but I forgot to get the key off the hard drive when I recycled my desktop" and everyone tries to laugh it off and stare into their drinks.
I still only have $11 of BTC :(
It happens every year around this time. People need to separate the stupid from their money. I cannot imagine a smart person buying this stinky piece at these prices! At $6K it was still overpriced!
Interesting to read comments back during the bear. Here is a post from December 2018 https://news.ycombinator.com/item?id=18640755
While the market is likely driven by fomo and manipulation, cryptocurrencies do have valuable use-cases. See this book[0] for a list of some and an explanation of how Bitcoin works.
[0]: https://whycryptocurrencies.com/
[0]: https://whycryptocurrencies.com/
There is not a single use case better solved by cryptocurrencies or blockchain than by a classical solution. Name one, I’ll wait. When there is I’ll eat my, err, hat.
there are many problems better solved by bitcoin than classical solutions. one example is as a bank account in a low trust society with high inflation (there are many such countries). creating a bitcoin wallet is extraordinarily easy and once you've acquired the bitcoin it's uncensorable and unconfiscatable. this is better than the classical solution, right?
Confiscation is good when executed through a legal process so I would argue it’s strictly worse. If the government is confiscating your money through unlawful means you’ve got much bigger problems. For instance, an unlawful government can easily confiscate your coins by means of a rubber hose and some pliers. Further a sufficiently motivated unlawful government can just turn off the internet.
The US government literally just confiscated a billion dollar wallet just a few days ago.
The permissionless nature does enable some use cases where the overhead associated with the classical solutions makes them impractical.
With Bitcoin, anyone can start a cash-to-bitcoin/bitcoin-to-cash office. All you need is a phone with Internet.
Could Western Union solve the same problem? In theory, yes, in practice, the overhead cost of joining the network means the guy with a phone in some remote village isn't going to do it.
This is obviously mostly relevant where the classic solutions aren't already ubiquitous. Want to wire money from Germany to France? Just use SEPA. Want to wire money from Germany to the US? You're probably better off with some traditional money transfer service like TransferWise or (for bigger amounts) a Forex/brokerage account.
Want to "wire" money from a remote village in Africa to a remote village in Asia? That's where you might benefit from your neighbor having set up a physical crypto exchange.
With Bitcoin, anyone can start a cash-to-bitcoin/bitcoin-to-cash office. All you need is a phone with Internet.
Could Western Union solve the same problem? In theory, yes, in practice, the overhead cost of joining the network means the guy with a phone in some remote village isn't going to do it.
This is obviously mostly relevant where the classic solutions aren't already ubiquitous. Want to wire money from Germany to France? Just use SEPA. Want to wire money from Germany to the US? You're probably better off with some traditional money transfer service like TransferWise or (for bigger amounts) a Forex/brokerage account.
Want to "wire" money from a remote village in Africa to a remote village in Asia? That's where you might benefit from your neighbor having set up a physical crypto exchange.
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The remote African Village use case is already solved by mobile money solutions like M-Pesa, which are cheap and easy to use via SMS or low-end feature phones. The cost of buying a smartphone with data plan to use a BTC wallet is prohibitively expensive for most people in developing countries.
Naturally you don't verify the blockchain yourself, but use a light wallet that uses very little data.
And you don't use BTC as the fees are way too expensive.
This is what people are doing in Venezuela for example.
And you don't use BTC as the fees are way too expensive.
This is what people are doing in Venezuela for example.
OK but are there any secure BTC or alt coin wallets (even light wallets) that will work on feature phones or SMS? Very few people in in remote villages can afford even the most basic Android smartphone. What incentive would they have to switch from M-PESA (or Alipay/wechatpay in Asia) that is already secure, cheap and widely accepted.
Cryptocurrency is a fascinating technology and social experiment but so far has no unique use case other than speculation.
Cryptocurrency is a fascinating technology and social experiment but so far has no unique use case other than speculation.
Not that I know of.
The real use-case is transferring to and from places that you cannot normally do. Smartphones are prevalent in Venezuela for example, but it's basically impossible to send money in or out unless you use cryptocurrencies.
The charity eatBCH uses this to give food to Venezuelans for example: https://eatbch.org/. I think that's a pretty unique use case.
The real use-case is transferring to and from places that you cannot normally do. Smartphones are prevalent in Venezuela for example, but it's basically impossible to send money in or out unless you use cryptocurrencies.
The charity eatBCH uses this to give food to Venezuelans for example: https://eatbch.org/. I think that's a pretty unique use case.
You can already send money from US to Venezuela using Moneygram and several other services cheaply. There are relatively few countries where sanctions prohibit Americans from sending money, and cryptocurrency would not make this legal.
You cannot send USD to Venezuela, only Bolivars, which isn't so good as hyperinflation will kill most of the value instantly.
One of the point of cryptocurrencies is that some countries may think certain things are illegal, but that doesn't make them wrong. To me helping to feed starving Venezuelans by sending them help directly is morally right, even if it was illegal.
One of the point of cryptocurrencies is that some countries may think certain things are illegal, but that doesn't make them wrong. To me helping to feed starving Venezuelans by sending them help directly is morally right, even if it was illegal.
I agree that the hyperinflation in VZ is a problem, but is that solved by Crypto? BTC's prices is highly volatile as well. In a bear market, there can be significant price slippage even while the recipient is waiting for a BTC transaction to confirm.
Highly volatile, absolutely.
Yet it's nothing compared to hyperinflation. In May 2019 prices in Venezuela doubled in only two days... every day.
While Bitcoin is volatile it's relatively stable compared to what Venezuela and Lebanon are going through today.
Yet it's nothing compared to hyperinflation. In May 2019 prices in Venezuela doubled in only two days... every day.
While Bitcoin is volatile it's relatively stable compared to what Venezuela and Lebanon are going through today.
allowing millions of people to actually own something for the first time ever.
The link has many such examples...
The problem of exchanging value between parties without intermediary or third-parties.
Yeah that’s not a problem though, it’s a feature.
Tell that to the Iranians or to the people in Venezuela. Countries can be mis managed, currencies can be mis managed, people can be targeted (financial sanctions), traditional financial services are just not available in a lot of places.
To top it off, It's Gold vs BTC for store of value and Gold has many, many downsides as well that we just chose to ignore because it's a shiny metal and has been in use longer.
To top it off, It's Gold vs BTC for store of value and Gold has many, many downsides as well that we just chose to ignore because it's a shiny metal and has been in use longer.
This is another classic misunderstanding.
The problem those folks have isn’t bad currency it’s bad government. You can’t solve that by allowing people to violate sanctions suddenly.
Remember, sanctions are what’s preventing these folks from trading internationally and sanctions are what’s preventing these folks from using USD. That doesn’t go away in a Bitcoin world. Amazon isn’t going to deploy stealth C-130s to airdrop in their prime packages if they pay with Bitcoin.
When the government has failed your currency is the least of your problems, and once you change the government your currency returns to normalcy.
Allowing the transfer of value in violation of sanctions has allowed North Korea to accumulate billions of dollars of crypto to fund their nuclear weapons programs. The livelihood of the average citizen changes not at all, but the largesse of the rogue state increases.
The problem those folks have isn’t bad currency it’s bad government. You can’t solve that by allowing people to violate sanctions suddenly.
Remember, sanctions are what’s preventing these folks from trading internationally and sanctions are what’s preventing these folks from using USD. That doesn’t go away in a Bitcoin world. Amazon isn’t going to deploy stealth C-130s to airdrop in their prime packages if they pay with Bitcoin.
When the government has failed your currency is the least of your problems, and once you change the government your currency returns to normalcy.
Allowing the transfer of value in violation of sanctions has allowed North Korea to accumulate billions of dollars of crypto to fund their nuclear weapons programs. The livelihood of the average citizen changes not at all, but the largesse of the rogue state increases.
Crypto is great- but BTC is a terrible crypto. Modern cryptos trade faster, with more anonymity, and more efficiently. BTC will never see mainstream transactional use- it's purely a store of value.
It still has some transactional use in online black markets for ease of purchase and name recognition- but it's considered 'legacy' and moving into unreccomended and unsupported territory on most markets.
I do believe that crypto does and will continue to gain use cases- but BTC is already on the tail end of it's useful life in any of those.
It still has some transactional use in online black markets for ease of purchase and name recognition- but it's considered 'legacy' and moving into unreccomended and unsupported territory on most markets.
I do believe that crypto does and will continue to gain use cases- but BTC is already on the tail end of it's useful life in any of those.
btc is just the value layer, it does not need to be fast or cheap chain. other chains like ethereum will be used for the more complex applications and these chains will interoperate with bitcoin.
Bitcoin is speculative, and will die a speculative death.
Until it is backed by something e.g. mandatory taxation like the USD, then its value is only as good as the next financial misinformation campaign. and here comes the btc boys.
It seems like a lot until you consider that it has been surpassed by many other investments in terms of gains such as Tesla, Paypal, Palantir stock and others. The days of Bitcoin going up 10-50x in a year are over, but still interesting to see what happens next. I think increasing regulation and the use of blacklists and 'coin tainting' erode whatever use bitcoin has though, as there will be no fungibility. This makes bitcoin worse than even cash in terms of being usable and censorship-resistant.
Given that BTC isnt based on any NPV or earnings multiple or industrial use value but is rather based on scarcity value, I dont see why gaining 10-50x returns are any more or less likely than, say, losing 90% of the value.
Could anyone provide a more methodical way of thinking about this?
Could anyone provide a more methodical way of thinking about this?
Not suggesting that this is correct in this case (edit: indeed, one can argue that it is not), but if you think of it as a store of value, whenever the USD money supply is increased (or people think it might be in the future), one might expect the fixed-quantity BTC to be exchangeable for more USD.
See: https://fred.stlouisfed.org/series/M1 .
Relative to the early days of Bitcoin, the room to fluctuate upward is much smaller than the room to fluctuate downward. Bitcoin's market cap is ~$200B, while M1 is ~$6000B. Back in the day, Bitcoin's market cap was a few million dollars or less. That said, BTC now has a powerful brand in the eyes of many possible buyers/holders, which makes a retreat all the way to zero far less likely.
I suspect that the only things that could kill BTC completely these days are a compromise of the hash algorithm, a coordinated effort against it by a consortium of governments that must include the US, or a devastating 51% attack by a consortium of miners. The third is perhaps least-likely, as the miners would stand to lose a lot if BTC imploded.
See: https://fred.stlouisfed.org/series/M1 .
Relative to the early days of Bitcoin, the room to fluctuate upward is much smaller than the room to fluctuate downward. Bitcoin's market cap is ~$200B, while M1 is ~$6000B. Back in the day, Bitcoin's market cap was a few million dollars or less. That said, BTC now has a powerful brand in the eyes of many possible buyers/holders, which makes a retreat all the way to zero far less likely.
I suspect that the only things that could kill BTC completely these days are a compromise of the hash algorithm, a coordinated effort against it by a consortium of governments that must include the US, or a devastating 51% attack by a consortium of miners. The third is perhaps least-likely, as the miners would stand to lose a lot if BTC imploded.
Thanks! This is a great explanation. I imagine expending it from M1 to also include other major countries' money supply would be a good next step in the analysis.
Curious if you could recommend any good read on BTC upside potential given this framework -- for example, right now the M1:BTC ratio is 1:30, but what factors/behaviours would dictate that ratio to change? or is the idea that the ratio keeps constant with more inflation and thus pushes BTC higher?
Curious if you could recommend any good read on BTC upside potential given this framework -- for example, right now the M1:BTC ratio is 1:30, but what factors/behaviours would dictate that ratio to change? or is the idea that the ratio keeps constant with more inflation and thus pushes BTC higher?
A govt ban on exchanges would do it as well, but the US response thankfully has been pretty moderate.
My thoughts exactly. It's about the same outcome you can expect as betting in Vegas.
Consider this: you only cited US stocks, that's not exactly open to the whole world.
Bitcoin is much more accessible, (arguably) converts to local fiat faster than US$ -> local, and having gains of 100% or close to it in a span of a few months is nothing to laugh at.
To add to this, country with capital controls (eg. china) or with foreign currency controls (venezuela).
> I think increasing regulation and the use of blacklists and 'coin tainting' erode whatever use bitcoin has though, as there will be no fungibility.
This has already happened. Bitcoin is a permissioned blockchain, now. It may be used by permission of the chainalysis industry and the regulators.
That's not to say bitcoin won't become a widely-used currency.
Maybe governments will allow bitcoin but ban all cryptocurrencies they can't track.
This has already happened. Bitcoin is a permissioned blockchain, now. It may be used by permission of the chainalysis industry and the regulators.
That's not to say bitcoin won't become a widely-used currency.
Maybe governments will allow bitcoin but ban all cryptocurrencies they can't track.
How so? Bitcoin is the best performance asset class.
Square outperformed Bitcoin by a wide margin trough to peak in 2020. Tesla vastly outperformed. Tesla is up 15X since the summer of 2019.
tesla or square is not an asset class
Bitcoin isn’t an asset class
Didnt say so but if we compare stocks to cryptos i think there is a clear winner
The parent specifically referred to Bitcoin. And I disagree. The founder shares of any big company have a par value of $0.0001 give or take so any company founders at for instance Uber would have seen the same gains or more.
Looks like it won't break the $20k threshold again. Back down it goes... I knew this was about to happen again when, just like last time, I heard regular "non-techy" people talk about it at work.
I love the crypto oracles who can sense what direction various coins are "supposed" to head to next.
Oh me too, thats been my favorite part. Everyone has their own theory about the future of bitcoin, but those that are certain of said future always give me a good chuckle.
You can short it and still make money. Go ahead.
That is one thing I love about the finance industry vs other industries.
Someone who thinks they can predict the future or at least have a strong opinion can go ahead and put their money on the line rather than just comment on a thread! It’s actually beautiful.
Someone who thinks they can predict the future or at least have a strong opinion can go ahead and put their money on the line rather than just comment on a thread! It’s actually beautiful.
Not necessarily. That person might have no liquid assets at the time, or might not have the means to short a stock, for example. Pretty weird to assume that everyone has funds to move around at a moment's notice.
I know it's gonna hit 20k at some point since I haven't seen media talking about it yet. Not enough FOMO
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This is probabyl not going to age well. It's very likely that BTC will break 30k in Q1 2021.
"Very likely" because of what? What is your reasoning?
The amount of energy being wasted (reportedly more than seven nuclear power plants worth) on what is essentially an unproductive project is quite absurd.
In a world where we should all be increasingly concerned about the looming climate catastrophe, it's wholly irresponsible for Bitcoin to exist other than as an academic curiosity.
Also I reckon if recreational drugs were legalised, there would be no real reason to use Bitcoin at all. I mean what would be left except for just buying into the pyramid scheme, and ransomware payments?