The Cryptocurrency Thread

[Markola]

An announcement of a passive ETF to be listed on the NYSE that will invest in the Bloomberg index of public companies involved in block chain and mining. It will not invest in cryptocurrencies. No expense ratio is announced yet.

https://seekingalpha.com/news/37667...to-launch-the-grayscale-future-of-finance-etf

 

[joesxm3]

Sure, I agree, for the most part. How does that legitimize Bitcoin?

Why does bitcoin need to be "legitimized"?

I was just making the point that the current money printing and currency devaluation can be directly mapped to the corresponding increase in asset prices and that by traditional valuation metrics investing in the the stock market at this could would be considered quite dangerous.

What worries me and prompts my interest in learning more about bitcoin is that I think there may be a real problem with the fixed income portion of our portfolios.

From my limited understanding of the bond world, you either earn a return based on the interest rate that the bond or collection of bonds pay or you earn a capital gain as the mark to market price of the bond increases due to the interest rate on new issues dropping.

At this point, the interest rate on new bonds is very low. The Federal government pays about $350 billion on interest with the exceptionally low interest rate. The 10 year treasury seems to pay 1.5% right now. So if we want to get back to a reasonable 5% return on fixed income that would mean nearly $1 trillion net interest.

Of course with 6.5% admitted inflation, even a 5% yield is negative in real terms.

So, it seems that the government cannot easily raise interest rates.

The rates are very low, so they can't drop them much more.

Therefore, how does the fixed income portion of the portfolio contribute?

I think in the past it was able to offset rate cuts with capital gains on bond values, but I don't think this can happen going forward for the next five or ten years.

Hence the need to take on more risk in equities and crypto and to chase real estate as inflation hedges.

 

[Mr._Graybeard]

Why does bitcoin need to be "legitimized"

It doesn't have to be, I suppose. There's also money to be made in methamphetamine and scrap catalytic converters ...

Hence the need to take on more risk in equities and crypto and to chase real estate as inflation hedges.

Real estate is something I can understand. I have made money in real estate. I can stand on it, survey it, eat off it if I have to. Yes, I like real estate more than Bitcoin.

 

[captain3d]

I simply question the fundamental economic value of cryptocurrency for most people. Past performance does not equate to economic value. The tulip bulb is, I think, a perfect analogy.

I would like to see your and any others criteria for Bitcoin or Crypto in general no longer being a tulip mania and becoming something you would considering as part of a long term portfolio. I think this would be helpful for everyone.

For myself I see it already as...
1. Insurance against an accelerating devaluation of fiat (US$)
1b. An alternative to Gold which does not seem to be doing a good job any more regarding 1.

2. An early investment in upcoming technology with the potential for great change (eg internet)

Things I would like to see change and make it less 'tulip' like...
1. More adoption (treasury) by established institutions and business as well as countries. This does seem to be increasing steadily.
2. Traditional investment vehicles (Spot ETF etc) to avoid the complexities of self storage and to give easy access to fund managers.
3. Clear rules around tax status of the many cryptos. We know Bitcoin and Ethereum are officially NOT securities now which makes it a great vehicle for Tax loss harvesting.

I guess ultimately there will be no need to invest in crypto separately as it will be fully integrated into normal business systems or it will be non existent.

Are you happy to just wait it out and let it organically mix in?
Or are you worried about a more radical shift in Fiat to Crypto that could pose a personal financial risk.

This last point does seem to be a major separating factor between current crypto enthusiasts vs crypto sceptics. The higher we see inflation moving the more likely crypto will seem attractive to more people.

 

[captain3d]

I'm not old enough to remember the tulip mania, but I do remember the dot-com frenzy of the late 1990s. Balance sheets didn't matter anymore because the Internet changes everything. When the economy went into recession in 2000, things went south in a hurry.

I think this is an excellent point and is appropriate for the crypto landscape today. We know there are 7000+ active crypto related 'projects' today. What percentage of those will be successful in the longer term? 0% 5%? 10%? 20%? Even in the best outcome similar to how successful and essential the internet has become very few companies made it through the dot-com bust.

But here we are talking about the businesses that ran on top of the internet infrastructure. The internet infrastructure itself (TCP/IP etc) just steadily grew without failing. In crypto there are businesses running on top like amazon and webvan did on the internet but also you can invest in the infrastructure itself by buying crypto like Ethereum or Solano. These structural cryptos are designed to be the backbone for business to 'plug in'.

This I think makes crypto investing unique compared to traditional business investing.

 

[captain3d]

An announcement of a passive ETF to be listed on the NYSE that will invest in the Bloomberg index of public companies involved in block chain and mining. It will not invest in cryptocurrencies. No expense ratio is announced yet.

https://seekingalpha.com/news/37667...to-launch-the-grayscale-future-of-finance-etf

Will be interesting to see what % of proxy crypto you will get by holding it.

 

[captain3d]

Mining Bitcoins - NIMBY


https://www.wsj.com/articles/bitcoi...-11636730904?mod=hp_trending_now_article_pos5

Maybe they can drown it out with a chorus of Voo Voo Zella music.

I used to live near a car wash that loved its big car blow dryer and leaf blowers. It was awful.

 

[Mr._Graybeard]

I think this is an excellent point and is appropriate for the crypto landscape today. We know there are 7000+ active crypto related 'projects' today. What percentage of those will be successful in the longer term? 0% 5%? 10%? 20%? Even in the best outcome similar to how successful and essential the internet has become very few companies made it through the dot-com bust.

But here we are talking about the businesses that ran on top of the internet infrastructure. The internet infrastructure itself (TCP/IP etc) just steadily grew without failing. In crypto there are businesses running on top like amazon and webvan did on the internet but also you can invest in the infrastructure itself by buying crypto like Ethereum or Solano. These structural cryptos are designed to be the backbone for business to 'plug in'.

This I think makes crypto investing unique compared to traditional business investing.

Pardon my cynicism. But if crypto proves to be a sustainable alternative to traditional currency in a fashion that it can produce a significant, commanding profit, the economic powers in the G8 will find a way to elbow the pioneers out of the way to the trough.

 

[captain3d]

Pardon my cynicism. But if crypto proves to be a sustainable alternative to traditional currency in a fashion that it can produce a significant, commanding profit, the economic powers in the G8 will find a way to elbow the pioneers out of the way to the trough.

No not currency. A financial transaction structure for trading. But yes you might be right. If it is integrated enough to run financial trading then it is also dominated by the gov.

 

[captain3d]

An article about upcoming deadlines for ETF approval...

https://www.research.arcane.no/blog/btcetfs

THE BITCOIN ETF RACE
Research Blog
Oct 1
This quarter could be an eventful quarter for bitcoin as we await SEC’s final verdict on the ever-growing list of pending bitcoin ETFs. Since 2013, there have been several attempts to launch exchange-traded bitcoin funds in the U.S., but so far, all of them have been rejected. Will we see a bitcoin ETF being approved this year, and if approved, what impact could ETFs have on the bitcoin price?

 

[aja8888]

Many of the non-miners, BTC/Crypto non-owners who want a piece of legitimizing "crypto" are in it for the FEES! It's just another thing to make money off of.

Can't say that I blame them!

 

[Running_Man]

Notice a pattern? Appeal to authority, if X, Y and Z are with it, it must be good. Part of the confidence game, you must get people to buy in to the scheme. None of the valid objections are answered, just ignored, glossed over, then appeal to authority and look how large the transactions and how long it has been going, therefore it is legit. Don't tell me you are one of the dinosaurs who dares to question this revolutionary new tech, you are too old and dumb to understand it anyway.

Nowhere was that stated nor are any valid objections answered.

Here are the objections I see
1) It's just like the Tulip Bulb mania there is no inherent value
2) Only Criminals use it
3) It is not feasible to use on a day to day basis
4) Uses too much electricity lack of green agenda makes impractical as you know carbon molecules
5) Governments will ban it.

1) Already answered this is an absurd comparison if one actually studies mania's.The South Sea bubble like the Tulip Bubble lasted 6 months. By 2011 Bitcoin had advanced from $1 in 2009 to #20 in 2013 and was considered a mania, it has with some large fluctuations increased steadily to $60,000 as the electronic value of validation and uniqueness of a bitcoin is understood to have great value in a world where nearly every item is digitalized. Bitcoin because of it's inherently rare yet transparent nature allows other tokens to be created and use deposits of Bitcoins for uses such as Starbuck using tokens as digital rewards for coffee.
https://www.yahoo.com/now/customers-reload-starbucks-card-bitcoin-154130368.html

2)The main value in Bitcoin is Decentralized Finance the removal of intermediaries to accomplish financing goals:

Decentralized finance uses technology to disintermediate centralized models and enable the provisioning of financial services anywhere for anyone regardless of ethnicity, age, or cultural identity. DeFi services and apps are mostly built on public blockchains, and they either replicate existing offerings built on the rails of common technology standards or they offer innovative services custom-designed for the DeFi ecosystem. At the same time, DeFi applications provide users with more control over their money through personal wallets and trading services that explicitly cater to individual users instead of institutions.

What Are the Components of DeFi?
At a broad level, the components of DeFi are the same as those for existing financial ecosystems, meaning they require stable currencies and a wide variety of use cases. DeFi components take the form of stablecoins and services like crypto exchanges and lending services. Smart contracts provide the framework for the functioning of DeFi apps because they encode the terms and activities necessary for the functioning of these services. For example, a smart contract code has a specific code that establishes the exact terms and conditions of a loan between individuals. If certain terms or conditions are not met, collateral could be liquidated. All of this is conducted through specific code rather than manually by a bank or other institution.

All components of a decentralized finance system belong to a software stack. Each layer’s components are meant to perform a specific function in the building of a DeFi system. Composability is a defining characteristic of the stack because the components belonging to each layer can be composed together to fashion a DeFi app.

3)Because of the nature of it's economy where most of the money comes through money transfers into the economy and intermediaries fees reduce much of the take Bitcoin is now an official currency of ElSalvador. Miami with it's many Latin American city is fully embracing the crypto conversion.
El Salvador’s economy relies heavily on the remittance market, representing over 20 percent of GDP, or around $6 billion annually, with 95 percent of remittances sent from Salvadorans working in the U.S. to their families back home. As this is shown to work this is an increasing amount of adoption. Ironically the people who most see the value in bitcoin are the poorest and the richest people on the planet.

4) There is a financial motivation to use solar energy for the mining of bitcoin and if nuclear reacters were increased in usage in the rest of the world as they are being implemented in China this would be a non issue. Chinas plan to go green is to build 135 new nuclear reactors, while the rest of the world plans on anyway the wind blows.

5) The fact that the richest people on the planet are working and embracing crypto currency exclusively prevents governments from banning the currency. This has been claimed since the begginning and adoption has only increased. As the total value of Bitcoin and cryptos expand, governments are forced to embrace it for the damage would be from banning the currency not from it's existence. It is already far too late to ban cryptocurrencies.

Some tokens will shoot up 1,000's of percent others will fall to zero that is for sure as the digital projects they are written for are either accpeted and increase in use or fail. But Bitcoin and Euretheum are the stalwarts that provide the backbone for the digital transacting that crypto makes possible.

Certainly they are going to be needed for metaverses. META which is the 4th biggest company in the S&P500 originally. Facebook is in the making of a digital wallet to outsize coinbase that will be used to create a marketplace where any currency crypto or soveriegn could be converted to transact on the Meta marketplace. Eventually you may be shopping at the grocery store through a VR enhanced store and shopping into a basket and paying with crypto in your wallet and have a robot deliver your basket of goods.

The digitation of all actions of citizens marches forward and traditional systems are not usable in these situations and will be gone much as the horse is gone as a primary means of transportation for the rich.

The doubters can continue to doubt and the sovereign currency assets will most likely continue to increase in price with the largest companies getting an ever expanding piece of the pie as small mom & pops cannot compete with the updated innovation.

 

[37andhappy]

Many of the non-miners, BTC/Crypto non-owners who want a piece of legitimizing "crypto" are in it for the FEES! It's just another thing to make money off of.

Can't say that I blame them!

Of course! This is capitalism at play and what has made America great. The key point here is that as investors, we try to predict the future demand for Bitcoin (as it is future demand which determines future price). For this purpose, it can help to see what incentives are in place which may drive future demand and adoption. Hence, as we see exchanges, miners, fin-tech companies etc start to build business around Bitcoin and in turn list their companies on stock exchanges (sharing their businesses with millions of shareholders), creating employment, paying taxes, dividends, etc, we can see how more and more people of power and influence are aligned in ensuring further Bitcoin adoption over time.

… if crypto proves to be a sustainable alternative to traditional currency in a fashion that it can produce a significant, commanding profit, the economic powers in the G8 will find a way to elbow the pioneers out of the way to the trough.

That is one view (and they tried that). What we can instead see happening now, is an “if you can’t beat’em, join’em” approach. You can be very sure that these “powers” are quietly and surely accumulating Sats before eventually announcing measures that further support / legitimize Bitcoin. A great example is what’s happening with the spot ETF approval applications. The game plan is simple for the established bankers and politicians – buy, hodl prior to announcing a spot ETF. Make an immediate 30% gain on the approval. Everyone’s happy. Call it unfair, but this is how the game of the established powers has always been played. The great thing with Bitcoin is that if we believe / accept that this will occur, we can in fact get in ahead and benefit from this by being more nimble than the big players. Its a rare opportunity that we can take advantage of ahead of established powers and yet thereafter be aligned and mutually benefit.

Mining Bitcoins – NIMBY

Ahh, nothing like the sound of fresh money being printed… Seriously though, yes these fans are loud (just as any data-center is). Existing laws of noise control should of course be applied. Interestingly Jack Dorsey is working on “micro-mining” technology for Bitcoin – essentially empowering people to mine in miniscule amounts via their Twitter connected devices but pooled and scaled on a massive level among Twitter users. This of course will be very quiet, and will help to further decentralize, secure, and encourage adoption. Expect to hear much more on this in the coming weeks…

The gold standard here seems to be either a combination of the Vanguard Equity Index Fund and the Vanguard Bond Index Fund, or the Vanguard Balanced Fund.

What are the metrics that are used to prove that this is the optimum strategy for the retirement portfolio?

Average annual return?
Low management fees?
Better return than managed funds?
Low volatility?
Price stability?

I don't want to put words into anyone's mouth, but what say you to the idea that we specify the metrics that justify the Vanguard funds and once we agree upon the list run the same metrics against bitcoin?

Joe you make some great points in your posts, including this one. My comments below:

Average annual return? – To date, Bitcoin vastly superior.
Low management fees? – Clearly Bitcoin is superior (provided you self-custody).
Better return than managed funds? – To date, Bitcoin vastly superior.
Low volatility? – Most Vanguard funds have lower short term volatility. (Hence the importance of understanding the HODL for anyone new to Bitcoin and the importance of learning to distinguish long term value from short term vol).
Price stability? - As per above.

Notice a pattern? Appeal to authority, if X, Y and Z are with it, it must be good. Part of the confidence game, you must get people to buy in to the scheme. None of the valid objections are answered, just ignored, glossed over, then appeal to authority and look how large the transactions and how long it has been going, therefore it is legit.

Jim – I think any of the “objections”, valid or not, have been patiently and very clearly answered by Running Man, Joe, myself and many others here. If you have a specific question ask it and I will try by best to address as time permits.

As for “notice a pattern”, yes the pattern should be clear and obvious – we are seeing more and more examples of people of influence and power understand, adopt and support Bitcoin. Why is this important? Because, in order to determine future price, we need to predict future demand. Adoption and support by people of influence and both an good indicator and an obvious driver of future demand. But yes, clearly those already in the “scheme” as you put it, are incentivized to ensure adoption continues. So, if we understand this, as investors we need to figure out if the “scheme” will be fought/defeated or if it will continue to flourish. As asset allocators, we basically need to make a call on this question, and then act accordingly.

To the extent that there is any “angst” of “having missed out” or being “too late” I would say, for many reasons, that there is still plenty of time. Bitcoin still has to grow 10x to match the market cap of gold (which brings us to around the USD 500K per coin mark). We are, in the US with access to both knowledge, existing wealth, the internet and in living in a country which cherishes and protects democratic values, very well placed to get in well ahead of the masses of the world who will be brought in over the next decade. Being a whole-coiner is still well in reach for many (to the extent this is an underlying concern).

All - Finally this week is going to be really interesting. We are implementing the Taproot upgrade (literally as I write this over the weekend) which brings some really positive improvements to Bitcoin (arguably diminishing some of the benefits ETH evolved into in terms of smart contract support), more efficient transaction processing, improved privacy features etc, all of which will ultimately help BTC further scale into more mainstream areas of finance. Bitcoin is very slow and methodical in any improvements, and as the pristine form of digital money, any improvements are very carefully and deeply scrutinized before being adopted. Second, we can expect over coming weeks some really interesting announcements from Jack Dorsey, not just with Square, but rather with Twitter where he essentially will be articulate and expand on his plans of turning every Twitter account in the world into a Bitcoin wallet (and indeed only for Bitcoin as opposed to any "alts").

Exciting times ahead!

 

[SecondAttempt]

The money you see in your bank account is supposed to be redeemable for dollars. One problem is that this money (essentially a debt by the bank to you) isn't backed 100% by dollars. So if enough people all demanded their dollars from the bank all at once, the bank would collapse. This is what we call a "run on the bank" and such collapses do occur from time to time.

This is more fear-mongering I cannot let you get away with this! In the United States bank deposits are backed by the FDIC up to reasonable levels. Brokerage accounts are backed by government mandated private insurance (SIPC) to a higher level. I'm fairly certain there is no insurance back of crypto currency deposits at all since they do no quality as securities. So right off the back you have a risk management confession to make to yourself.

We also have the Federal Reserve serving as the "lender of last resort." If a bank faces a liquidity crisis as you described, the Fed will lend to fill any need. The Fed owns the currency printing presses and there is literally no limit to how big a need they can fill. A bank cannot fail in the Unied States without the Fed permitting it!

Your description of the banking system is simplistic to the point of being misleading. It is not technically "wrong" but misstates many facts and ignores safeguards that are in place and have worked in the recent past.

Let's consider a tiny bank with 10 depositors each with $100 on deposit. The bank has $1000 in total deposits. Let's say it is required to keep 10% on reserve for withdrawals. That means it can lend out $900 and keep $100 on reserve. Is it free to lend the $900 to anyone? No! It can only use that $900 to buy extremely low risk investments like US Treasuries. Maybe i can use $50 for a car loan or mortgage. Sure, if it were a bigger bank it could take some risks to earn a bit more return and profit. But those are highly regulated!

So yes, our tiny bank only has $100 available to supply withdrawals. But should a rumor cause depositors to worry that the bank is about to fail and they all show up to withdraw their money, the bank has many options and can support withdrawals completely with government backing. In most areas of the US there are mechanisms in place to distribute vast amounts of currency within minutes or hours. (Think of a major southern California earthquake tha takes out power and internet. People will need cash to survive for a few weeks and there are contingencies for this). So your bank run scare tactic is simply not realistically possible. We could have paper dollars to any bank within minutes or at least a couple of hours almost anywhere in the US.

In fact these options are exercised routinely. Every single bank in the United must balance its book at the end of every day. Assets (loan portfolio) must equal liabilities (deposits subject to withdrawal). If they do not, the bank borrows or lends to the Fed to balance every single day (or to other banks). Basically every bank is exercising these lend/borrow mechanisms on a daily basis!

So there is no factual concern over bank runs in the United States! I understand that they happened in the 1930s and they make for great fear-mongering but they will not happen. We saw that in 2008. We had a severe financial crisis. Plenty on banks failed. But the FDIC effectivity prevented bank runs. And I will even give credit to politicians of both major parties for coming together to deal with a national emergency quickly and professionally.

Most modern developed countries have similar processes and systems in place. Bitcoin is neither a necessary nor practical solution for most of the world where bank runs are simply not something anyone should lose sleep over.

 

[37andhappy]

I'm still up, and now back from a party where we watched and celebrated the mining of the first Taproot enabled Bitcoin block. So, we are now live with Taproot!

SecondAttempt - your statement that:

"there is no factual concern over bank runs in the United States! I understand that they happened in the 1930s and they make for great fear-mongering but they will not happen"

is false.

Over the last 20-30 years we have had countless bank failures, These include:

Washington Mutual - 2008
Continental Illinois National Bank and Trust - 1984
First RepublicBank Corporation - 1988
IndyMac - 2008
American Savings and Loan - 1988
Colonial Bank - 2009
Bank of New England- 1991
MCorp - 1989
FBOP Corp banking - 2009
Gibraltar Savings and Loan - 1989
First City National Bank Houston - 1988
Guaranty Bank Austin - 2009
Downey Savings and Loan - 2008
BankUnited FSB Coral Gables - 2009
HomeFed Bank - 1992
AmTrust Bank - 2009
WesternBank - 2010
United Commercial Bank - 2009
Southeast Bank Miami - 1991
Goldome - 1991
City Federal Savings and Loan - 1989
Imperial Federal Savings Assoc. - 1990
Great American Bank - 1991
CenTrust Bank - 1990
Empire of America Savings - 1990
California National Bank - 2009
Crossland Savings Bank - 1992
The Connecticut Bank & Trust Co. - 199
Corus Bank - 2009
Gibraltar Savings Association - 1988
MeraBank - 1990
First Federal Bank of California - 2009
Sunbelt Savings - 1991
Doral Bank - 2015
R-G Premier Bank of Puerto Rico - 2010
Western Savings and Loan - 1989
Columbia Savings & Loan Assn. - 1991
Franklin Bank - 2008
Lincoln Savings and Loan Association - 1989
Silverton Bank - 2009
Imperial Capital Bank - 2009
PFF Bank & Trust - 2008
La Jolla Bank - 2010
Frontier Bank - 2010
Amcore Bank - 2010
First National Bank of Nevada - 2008
Riverside National Bank of Florida - 2010
Midwest Bank and Trust Company - 2010
First National Bank - 2013
Superior Bank - 2011
TierOne Bank - 2010
Irwin Union Bank and Trust Company - 2009
Orion Bank - 2009
EuroBank - 2010
First Community Bank - 2011
Integra Bank, N.A. - 2011
ANB Financial - 2008
First Regional Bank - 2010
ShoreBank - 2010
Silver State Bank - 2008
New Frontier Bank - 2009
Georgian Bank - 2009
Vineyard Bank - 2009
Peoples First Community Bank - 2009
County Bank - 2009
Hillcrest Bank - 2010
Advanta Bank Corp. - 2010
CF Bancorp - 2010
Mutual Bank - 2009
Community Bank of Nevada - 2009
First Bank of Beverly Hills - 2009
Temecula Valley Bank - 2009
New South Federal Savings Bank - 2009
Community Banks of Colorado - 2011
Hamilton Bank - 2002

...and many more.

Whilst you may not have been personally affected by one, bank failures occur frequently, not just in the US, but globally, Bitcoin offers us a defense against that. Remember too, that Bitcoin is not just used in the US. Rather it is a global asset. Bear in mind also that for many people globally, they don't even have bank accounts in the first place. Bitcoin for the first time, offers them an ability to store wealth in a form that is accepted and transferrable and accessible globally, without any counterparty risk.

You are partially correct that some types of deposits in retail banks in the US are insured (currently up to 250K per person for certain types of qualifying deposits). But trust me, being involved in a banking collapse as a customer is not fun (nor lucrative). And say for example you have even just 2.5m in cash, spreading it around 10 banks is a pain.

Further we have institutions like Lehman's which were not insured. I have friends who lost millions with them, many who have now moved to Bitcoin as a store of wealth they feel more comfortable with.

Regulated crypto exchanges in the US are privately insured, and further cash deposited with them is FDIC insured. This will of course also increasingly be the case as existing banks offer crypto related services. However, as stated earlier, with Bitcoin we don't need a counterparty. We can self-custody, which is what I would recommend we all do for the majority of our Bitcoin.

Finally, (as I explained in earlier posts in this thread), when the US prints money, it has a proportionate counter-effect in devaluation of the value of the USD. So yes, it is correct that the Government can "save" a failing bank (effectively by printing money), but this leads to the value of the existing amount of money in circulation of that currency being diluted. Bitcoin is out defense against that which is why after 2008 we say massive inflows from cash into hard assets (and why, it was no co-incidence that Bitcoin was launched shortly after the 2008 crisis).

OK, gotta go. Its morning here, sun is rising, I am dog-sitting a dog who needs his morning walk along the beach, and a champagne breakfast awaits!

 

[joesxm3]

It seems that the Dodd-Frank bill of 2010 has some language to prevent bank bail outs and specifies bank bail ins instead. I think as 37 said it will not affect people with less than $250,000 in a bank, but would affect larger depositors.

https://www.investopedia.com/articl...716/why-bank-bailins-will-be-new-bailouts.asp

It seems that many of the posts in this thread consider money printing to be the solution to every problem. Money printing devalues the currency and is the root of the problem, not the solution.

 

[joesxm3]

I'm still up, and now back from a party where we watched and celebrated the mining of the first Taproot enabled Bitcoin block. So, we are now live with Taproot!

OK, gotta go. Its morning here, sun is rising, I am dog-sitting a dog who needs his morning walk along the beach, and a champagne breakfast awaits!

Wow. Living large. Walk on the beach and champagne. I will be having oatmeal and Maxwell house in a few minutes. Maybe I should get me some of that bitcoin.

So the bitcoin network is still working after the upgrade?

I was worrying that it would by Y2K all over again.

Is the bitcoin core written using COBOL? Most serious financial applications are written in COBOL, so I would hope so

 

[explanade]

130 posts and the vast majority of them are in this thread and a previous crypto thread.

Hmmm.

 

[SecondAttempt]

Over the last 20-30 years we have had countless bank failures, These include:

And in no case did any depositor lose money. The protective mechanisms worked as designed. You undermine any credibility you may have when you resort to demonstrably wrong fearmongering. Surely you can see that.

 

[aja8888]

Green Bay over Seattle. Shutout....first time in 10 years they have been held to no points.

Time to shut this thread down.

 

[37andhappy]

And in no case did any depositor lose money. The protective mechanisms worked as designed. You undermine any credibility you may have when you resort to demonstrably wrong fearmongering. Surely you can see that.

Again, false. Many did lose money, and were not fully covered by insurance. (I know some of them personally). Further, not all banking collapses occur in the US, and not all people in the US keep funds only with US banks.

 

[travelover]

1) Don't feed the trolls
2) The IGNORE function is easy to use and provides instant relief.

 

[37andhappy]

Wow. Living large. Walk on the beach and champagne. I will be having oatmeal and Maxwell house in a few minutes. Maybe I should get me some of that bitcoin.

So the bitcoin network is still working after the upgrade?

I was worrying that it would by Y2K all over again.

Is the bitcoin core written using COBOL? Most serious financial applications are written in COBOL, so I would hope so

Lol the champers breakfast is a rare occurrence. I'm normally a double-espresso only for breakfast type of guy.

The Bitcoin network seems fine so far since the upgrade. And as you know, all coins are backwards compatible in case anything was to go wrong.

Yes, with any upgrade there is a Y2K effect. Its definitely introduces some caution and risk into the market (both for rational and irrational reasons). Less so with Bitcoin given how slow and methodical and carefully any improvements are made given this is the entire base layer of money for the digital economy. But there is still some risk.

So, short term Taproot implementation in Bitcoin is arguably negative to price, but long term should be very positive. The benefits of the Taproot upgrade will only really show in the months and years ahead...

 

[SecondAttempt]

Again, false. Many did lose money, and were not fully covered by insurance. (I know some of them personally). Further, not all banking collapses occur in the US, and not all people in the US keep funds only with US banks.

If they followed the rule and kept BANK deposits under the limits they were protected. If they were stupid they got what they deserved.

And I did not say we have had no bank failures. Both the savings and loan crisis and the 2008 financial crisis led to numerous "failures" that you listed. While they were indeed failures, the vast majority were absorbed by other banks. All of the government expenditures made for "Troubled assets" under the Troubled Asset Relief Program (TARP) were repaid with interest. Bad banks should fail and they have of course.

What I said is that we have had no BANK RUNS in modern times so raising that fear in the United States is fear-mongering. Please provide your evidence of this (a bank run in the US since, say, 1950) happening.

Americans who keep money in foreign banks likely have good reasons. But when bad things happen because of inadequate legal protections, they have simply experienced a cost associated with their choices.

I see bitcoin and other cybercurrencies as a viable option for people in the developing world for many of the reasons you have cited. But they represent a minicule part of the global economy. I still contend that bitcoin has no real economic value to most of the developed world beyond speculation and facilitating financial and other crimes including ransomeware, money laundering, tax evasion, human trafficking and arms trafficking.

Can you make a quantitative case for the value of bitcoin to developed world citizens if it were of no utility to criminals because of full government transparency? You keep ignoring this challenge.

 

[37andhappy]

What I said is that we have had no BANK RUNS in modern times so raising that fear in the United States is fear-mongering. Please provide your evidence of this (a bank run in the US since, say, 1950) happening.

Do you recall the 2008 financial crisis by any chance?

In almost all the examples I provided in that long list of US bank collapses, these were precipitated by withdrawals as those with funds panicked. Word leaks out quickly, and it then becomes a viscous circle of every increasing withdrawals and ever increasing deposits. This is how banking collapses occur. (In some cases it was more institutional money being pulled out, in others it was literally people coming in and demanding to withdraw money or lining up at ATMs to pull out money).

You accept that demand for Bitcoin will be supported by the utility it provides in the developing world. We are making progress and are in agreement there! And I know you accept that as a result BTC will likely rise in value (as you mentioned you agreed with in a prior post), so we agree on that also.

So, as to the utility Bitcoin provides to people in the US, the most important in my view is its use as a preservation of value and defense against devaluation caused by money printing and inflation. [MOD DELETE]