Many thanks to all that have sent me such nice messages. Great to see such interest. I won’t be able to answer all the personal messages send to me, but I will aim to post answers to key questions here on a weekly basis.
What happens to a system whose many parts become redundant when a new system arrives?
Or put another way. How can the old system adapt to be useful with the new system.? Many people do not want the responsibility of making their own permanent transactions. They will still want to pay someone in teh middle to help them.
Great to see all your posts here Capitan. What we will see is two streams of growth – fintech companies who are essentially “Bitcoin native”, and then traditional banks who make slow but steady steps to grow/adapt into Sats. Over time, there is a convergence, with companies on both sides either failing/succeeding, and in some cases merging into combined entities.
Central banks are studying how to create and manage digital currencies to address those issues and needs, along with other parts of financial infrastructure. I think it’s pretty likely we will soon see some type of digital currency. No one knows if any of the current cryptos will have a role. For now that is unlikely, because by definition currency needs to have stable value and these assets don’t.
A core role of Bitcoin vs Government digital currencies is that Bitcoin will serve as a defense against deviation / money printing. Second, digital money may have technical restrictions put on is as to how it can be used (eg, haven’t paid taxes or a fine? Banned from spending overseas. Receive a Government unemployment benefit? Can’s spend on alcohol). Third, certain Governments will ban the use of other Governments currencies in their countries due to political reasons. Bitcoin is a defense against all these concerns (although having said that I do see merit in Government money (essentially our taxpayer money) being restricted for uses in some cases, the alcoholic receiving a government pension being a good example).
As for price stability, to a Bitcoin native person, Bitcoin is perfectly stable. One Sat always = one Sat (just like USD always = one USD). All a matter of perception. The problem of course being that the USD whilst always + to one USD is not fixed in supply, and can be printed infinitely. What we do know is that based on historical data, the USD declines in value over time, whereas BTC rises over time.
…crypto currency is not currency.
This is a subjective statement, and may actually be irrelevant in any case for all practical purposes in terms of how Sats are used. [MOD EDIT]
I'm wondering how fractional reserve banking can ever work with a money supply that is forever fixed and, therefore, how a completely bitcoin economy could ever grow.
Its primarily because the total supply of Bitcoin (whilst fixed) can be infinitely divided (first down into Sats, 1/100,000,000th of a bitcoin, and then further into micro-Sats over second layer networks). Visualize a pizza, being sliced into ever smaller shares and divided by ever more people. Or maybe explained another way, in reverse, the Government cannot simply make us all "richer" by printing more money. All that happens is that whilst there is more money, the totally amount of what it can purchase remains the same. hence the "cost" of such things rise in nominal terms, which is what economists refer to as "inflation".
What happens during sustained internet disruption?
In such a case all the Bitcoin would disappear! Yikes! OK, no lol that not really what happens. Bitcoin is a decentralized mathematical algorithm. It continues to exist regardless of any powercut or outage, or any failure of a device on the network. A far far greater risk is a bank’s IT systems not only going down, but being irreparably and maliciously harmed. This is a very real risk, with banks operating on extremely old and archaic legacy systems. If we ever get into war scenarios with a country like China, watch out. (Bitcoin by the way, is our defence against that). You would think that one of the last Bitcoin skeptics Nassem Taleb of "black swan event" fame would be aware of the likelihood of such "unlikely" events occurring...
Taleb says BTC is worth exactly 0
Well, he’s been proven wrong every single second since Bitcoin was born 13 years ago. As an economist (if that’s what he is?), he should know that the value any asset is precisely the price others are willing to pay for it. Bitcoin is exchanged globally in hundreds of thousands of transactions, 24/7. The market determines price, and that price is based on a function of supply and demand. Same concept applies to fiat currencies by the way – they are only worth the value others are willing to attribute to them. This is why we see fiat currencies decline in value as people over time lose faith in the value the represent.
Grayscale's GBTC (close end Bitcoin fund) application to become a spot Bitcoin ETF is officially 'noticed' at SEC
I think there is a 45 day response window. The response is unlikely to be positive but you never know.
Let’s see. It has to come eventually. We are already seeing other countries allow spot ETFs. Many of those in the know of “how things work in the US” are speculating that the time gap is to allow “insiders” (politicians, the rich and powerful, maybe even parts of the Government) to acquire larger holdings first before “announcing” a true spot ETF, (which they know will lead to massive inflows and price appreciation). This then makes money work “like its supposed to work” – ie - benefit the rich whilst retaining control and dominance over the masses.
And how about something negative. This is a risk to many industries of course.
CHIP SHORTAGE: CAUSES, SEVERITY AND THE IMPACT ON BITCOIN
ASIC miners have been in short supply for some time now, with prominent Bitcoiners already commenting on this issue in early 2021
Captain, well it is a “problem” for miners who want to make more money mining (ie essentially the arbitrage between the cost of electricity and equipment and the BTC price). The headline is somewhat misleading, as its not a problem for BTC per se, (the reason being that Bitcoin and the network that powers it keeps running by those mining with existing mining equipment). But yes, when there is a positive price arbitrage, every miner wants more equipment to mine more Sats. When China really cracked down on mining a few months back the price arbitrage for other miners globally rocketed up, hence the increased demand in equipment.
Yes thanks for this post. It is nice to see everything about it in one place. Like any new technology, there are people willing to rip off the uninformed investor. So it is good to see some knowledgeable people here. What I fail to understand is why they tolerate the skepticism.
I might have to dig into the “ignore” feature for some posters (is there a way to limit that to a certain thread?)
I hope the folks posting useful information continue to do so. I don’t think it’s particularly valuable to read _repeated_ challenges of crypto characteristics or ad-hominem replies.
Keith/Dog, I think we should welcome (or at least tolerate) the “skeptics” posting here. Its all part of the learning process. Everyone has their own way and process of coming to accept new concepts - for some that process is somewhat “public” and can result in a range of emotions being displayed. They also “contribute” by providing topics that can be explained/clarified/rebutted. Of course some “objections” can become rather repetitive or lacking in logic, but I still think discussion should still be welcomed in the interests of investor education.
OK, that's it from me this week from me. Chat again soon guys. Hodl strong.
