Bitcoin - World's 30th largest Currency

When I read some of the posts on this thread, I am reminded of a famous Satoshi quote:

"If you don't believe it or don't get it, I don't have the time to try to convince you, sorry."
 
When I read some of the posts in this thread, I'm reminded of the sell side brokerage analysts, boiler room. penny stock, Jordan Belfort and a saying attributed to P.T. Barnum.
 
MichaelB said:
When I read some of the posts in this thread, I'm reminded of the sell side brokerage analysts, boiler room. penny stock, Jordan Belfort and a saying attributed to P.T. Barnum.
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I am pretty familiar with this thread and it appears that only three or four posters have or have owned Bitcoin and none to my knowledge has ever posted on here encouraging others to buy. Maybe you are privy to posts that were deleted in which someone openly touted or tried to harass you into investing in Bitcoin and this has somehow caused you to mimic my post?

For the record I have never owned a crypto currency (may change on Jan 18th for a few minutes), I am currently short the premium on the NAV for GBTC (public forum record). I am not interested in crypto's as an investment as the technology the exchanges use are 50 years behind Wall Street. I prefer the anonymity of cash over cryptos and believe that the US Gov't will try to use blockchain to create a cashless society (delete this if it is not PG-13). I am very interested in the ability to move my cash globally without an intermediary as the current cost's are excessive in the opinion of myself and most expats I know.
 
flintnational said:
A recent Jason Zweig Bitcoin article.

Summary - Don't do it.

"Investors often blur the vital distinction between what is obvious and what is inevitable. It’s obvious that blockchain and digital currency have a bright future, but that doesn’t mean that it’s inevitable that any particular cryptocurrency will dominate."
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Satoshi said (about Bitcoin) Either Bitcoin will be the currency of the future,or it won't, there is no third option.
 
I was chatting about the bitcoin bubble with DS and asked him what was the biggest problem with it? First he said "there's nothing backing it". I said that is a problem, but no. Then he said "crazy volatility". I said that is also a problem, but no. I told him that the real problem is that there is nothing unique about bitcoin that can't be reproduced ad infinitum.

As of today, there are at least 1381 different crypto-currencies! I'm not sure if this link has been posted yet, but this site summarizes all of them with current market cap, price, and price movements https://coinmarketcap.com/all/views/all/

So we are in the infancy of the concept of blockchain as currency, but betting specifically on bitcoin as a long-term winner is highly speculative.
 
USGrant1962 said:
I was chatting about the bitcoin bubble with DS and asked him what was the biggest problem with it? First he said "there's nothing backing it". I said that is a problem, but no. Then he said "crazy volatility". I said that is also a problem, but no. I told him that the real problem is that there is nothing unique about bitcoin that can't be reproduced ad infinitum.

As of today, there are at least 1381 different crypto-currencies! I'm not sure if this link has been posted yet, but this site summarizes all of them with current market cap, price, and price movements https://coinmarketcap.com/all/views/all/

So we are in the infancy of the concept of blockchain as currency, but betting specifically on bitcoin as a long-term winner is highly speculative.
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Bitcoin is the poster child, but the true game-changer is the blockchain. It enables peer-to-peer payments with theoretically no (or neutral) middlemen. Once the kinks get worked out and the dust settles, it's the future (imho)
 
USGrant1962 said:
So we are in the infancy of the concept of blockchain as currency, but betting specifically on bitcoin as a long-term winner is highly speculative.
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I do not think anybody with rudimentary knowledge of the subject would disagree with you. There will be several cryptos that will exist for specific purposes, ie cross border settlements, international trade (think smart contracts) to replace international letters of credit for things like oil import/export. One for micro transactions, etc. It is clear Bitcoin can not be all of these things and the cryptos people will use in the future may not exist yet.

Cryptos may be in a bubble or fiat currencies may be deflating as a result of Global QE as the OP has suggested. As a new asset class it has merit simply because it has no correlation to anything else. As an investment or currency it has no value as it is too volatile, the exchanges are not regulated or secure,digital wallets are not secure (especially if they were set up using a smartphone) unless they are on a device that is not connected to the internet.

The fact that Wall Street has come around and will open trading desks/allow futures trading/create short long ETF's, list on the NYSE as well as the German Bourse, tells you that it is gaining acceptance and institutional interest and legitimacy.

So, there certainly is some their there. At some point all this will be determined, prices will stabilize, a measure of value will be assigned by the world and HODLers will no longer HODL and can feel safe storing their wealth in cryptos, companies can do business. bank less people can have access and traders will trade.
 
Many blockchain applications have nothing to do with currencies or payment systems. Nor are they meant to facilitate transactions between anonymous parties.

From Wikipedia:

A blockchain, originally block chain, is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block typically contains a hash pointer as a link to a previous block, a timestamp and transaction data. By design, blockchains are inherently resistant to modification of the data.​

One example is the use of a blockchain to record land ownership. Certainly, in this application it is not meant for the land owners of record to be anonymous! The land owner must be identifiable by some other means, and available to present himself to authorities if he is to assert his right to his property.
 
Even in the use of a blockchain to make payments, as I can see the majority of the transactions in real life cannot be anonymous.

Suppose I use bitcoin to pay for something I order on eBay. If the seller fails to send me the paid-for merchandise, what recourse do I have but to make a claim with eBay? How do I link the proof of my payment to the failure of the seller to ship if both my identity and my payment are anonymous?
 
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Thanks!

As one can see, a blockchain is foolproof (at this point) to record a contract between two parties, without using a 3rd party.

But to enforce the contract, we do need a 3rd party. And despite my friend redduck's offer of help, I prefer that 3rd party siding with me to be the government with its power to arrest and imprison the bastard. And to hurt him, torture him, molest him, so that he will never ever do that again. OK, I will stop now.
 
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NYEXPAT said:
I am pretty familiar with this thread and it appears that only three or four posters have or have owned Bitcoin and none to my knowledge has ever posted on here encouraging others to buy. Maybe you are privy to posts that were deleted in which someone openly touted or tried to harass you into investing in Bitcoin and this has somehow caused you to mimic my post?
Click to expand...
I’m pretty familiar with this thread too, and I wasn’t mimicking you.

NYEXPAT said:
For the record I have never owned a crypto currency (may change on Jan 18th for a few minutes), I am currently short the premium on the NAV for GBTC (public forum record). I am not interested in crypto's as an investment as the technology the exchanges use are 50 years behind Wall Street. I prefer the anonymity of cash over cryptos and believe that the US Gov't will try to use blockchain to create a cashless society (delete this if it is not PG-13). I am very interested in the ability to move my cash globally without an intermediary as the current cost's are excessive in the opinion of myself and most expats I know.
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Well, given your banking and tax situation, it’s easy to see why you would prefer an option where you can move funds outside the current banking system.
 
sengsational said:
I learned about Bitcoin January of 2009, here: https://www.grc.com/sn/sn-287.pdf (a security podcast). Steve Gibson reported a few weeks later that he got 50 Bitcoin, and he wasn't even trying...just a lame desktop machine.

Many years later, the summer of 2011, it looks like mid-August, I bought $5 worth, put the wallet on a flash drive, then promptly lost the thumb drive, LOL! Well, at least I haven't found it yet. Haven't looked that hard, though. I don't know what fraction of a coin $5 bought. Unless I find the thumb drive, I don't want to know ;)
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This was not January 2009, it was actually February 9, 2011. They have released a replay of that episode, released yesterday. The intro is recent, then they play the part of the episode from 2011. https://twit.tv/shows/security-now/episodes/643?autostart=false

So if you want a basic technical understanding of Bitcoin, you might listen to the episode.
 
NW-Bound said:
Thanks!

As one can see, a blockchain is foolproof (at this point) to record a contract between two parties, without using a 3rd party.

But to enforce the contract, we do need a 3rd party. And despite my friend redduck's offer of help, I prefer that 3rd party siding with me to be the government with its power to arrest and imprison the bastard. And to hurt him, torture him, molest him, so that he will never ever do that again. OK, I will stop now.
Click to expand...

And there is a fourth party in general - a Bitcoin to local currency exchange like Coinbase if you want to transfer local currency to Bitcoin (you know, in case your other assets, salary, and spending are in local currency). Then consider you might use a bank or paypal to handle transfers from Coinbase - that's a fifth party. Add in Lightning Network (something required to actually make feasible paying for anything less expensive than a used sedan), and we're up to six parties. And of course the IRS will require reporting of purchases and sales so we're at seven parties (unless Coinbase et al use a third party, or in this case, an eighth party). I've lost count now, but there's likely to be several other parties on your counterparty's side of the ledger in every exchange.

You can't fiat this stuff up.
 
Well, some people like to think of trades where they meet a stranger in a remote corner of a parking lot, get handed a package of something for which they will pay with bitcoins. No big amount of cash to get withdrawn from the bank, nor deposited to the bank of the seller. That sort of thing.

Other than that, there will always be other people who know about the transaction. Buy a house, a car with bitcoins? Don't some institutions always have to know about the transactions in order for the new owner to register or to title the property? How can the transactions be anonymous? Even eBay or Amazon need to know your address so they can deliver your goods.
 
NW-Bound said:
Well, some people like to think of trades where they meet a stranger in a remote corner of a parking lot, get handed a package of something for which they will pay with bitcoins. No big amount of cash to get withdrawn from the bank, nor deposited to the bank of the seller. That sort of thing.

Other than that, there will always be other people who know about the transaction. Buy a house, a car with bitcoins? Don't some institutions always have to know about the transactions in order for the new owner to register or to title the property? How can the transactions be anonymous? Even eBay or Amazon need to know your address so they can deliver your goods.
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Don't worry - the crypto folks are just 2 years away from developing a solution to your anonymity question. Of course they've been 2 years away for 5-6 years now! :)
 
Another thing about having to exchange bitcoins for dollars before you can spend it: it is not a real currency if it has to be exchanged for another one.
 
NW-Bound said:
Another thing about having to exchange bitcoins for dollars before you can spend it: it is not a real currency if it has to be exchanged for another one.
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You see, it's a ummm ahhhhh well... it's a ahhhhhhh, ummmmm storage of value... Ummmmmm well, ah, um... It's gone up 10x in the past few months, can't you just concede the point that it's bigly valuable?!?! :D

But more seriously, here's a fun read from a bitcoin enthusiast trying to pay his bar tab to the proprietor of the bar, who also loves teh bitcoin.

Long story short - the guy ends up paying $31 in transaction fees for the $20 bar tab ($51 total) and it took 2.5 hrs to complete the transaction. He could have literally washed dishes in the back of the restaurant for a couple hours and worked off his $20 bill in less time.
 
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FUEGO said:
You see, it's a ummm ahhhhh well... it's a ahhhhhhh, ummmmm storage of value... Ummmmmm well, ah, um... It's gone up 10x in the past few months, can't you just concede the point that it's bigly valuable?!?! :D

But more seriously, here's a fun read from a bitcoin enthusiast trying to pay his bar tab to the proprietor of the bar, who also loves teh bitcoin.

Long story short - the guy ends up paying $31 in transaction fees for the $20 bar tab ($51 total) and it took 2.5 hrs to complete the transaction. He could have literally washed dishes in the back of the restaurant for a couple hours and worked off his $20 bill in less time.
Click to expand...

That transaction fee is outrageous for your "peers" to encode your transaction, via the broker Coinbase as another party. And it took 2.5 hours. Visa, MC, or any of the CCs would have done it for peanuts, and in seconds.

About the storage of value, bitcoins represent a huge amount of electricity the miners spent to beat each other in trying to be the first to encode a new block with the lowest harsh value. I read somewhere that huge amount of coal was burned in China to generate electricity for the "mining CPU farms".

Imagine if that amount of energy was used for something else, like making lots of solar panels and lithium batteries that bring a sure and tangible return.

For other applications where the use of a blockchain is to have an immutable record of something, there's really no need to spend megawatthours to encode an additional record. A broker can do that for a fixed fee, and that is all that he is going to earn.
 
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NW-Bound said:
That transaction fee is outrageous for your "peers" to encode your transaction, via the broker Coinbase as another party. And it took 2.5 hours. Visa, MC, or any of the CCs would have done it for peanuts, and in seconds.
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It's even worse - I don't think that quoted $31 fee included any FX from USD to Bitcoin. The guy put in a BTC payment amount and they tacked on a BTC fee for the transfer. USD:BTC conversions (x2??) would probably come with another set of fees. :)

+1 on horrible waste of electricity implicit in the bitcoin process that only gets worse as difficulty increases on proof of work computations.
 
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