Crypto Currency Thread (Vol.2)

[Condi]

kestonian said:

Intrinsic value is just an opinion and they vary wildly. Not all bonds produce a coupon, not all shares produce a dividend. What’s the intrinic value of one share of Tesla? What’s the dividend it’s returned? What utility has it provided?

If I buy one bitcoin from a miner, the miner has swapped electricity and hardware costs for USD. I then sell it someone who uses it to buy a pizza from a guy who flips it back to USD at slightly below market because they don’t like the volatility of the transaction currency who then takes a spread selling it to the next guy who wants to send currency across the world it’s not just a bunch of crypto idiots sitting in their underpants making each other richer or poorer.

Crypto has many uses, one of them is as a store of value, another is as a speculative instrument. Same as houses.

Honestly, must we go over this again?

You buy a share, that share is a part ownership of the company, it's assets, it's future profits, the added value of the employees.

And while there are bonds which don't pay a coupon, they cost less than their redemption value. You buy it for £10 today, get nothing until it matures and you get £12. Nobody is buying a bond for £10, expecting to get £10 later, except in highly unusual circumstances.

Bitcoin does what? It doesn't provide ownership of anything tangible or physical. It doesn't generate a return. It doesn't entitle you to any future value. It is at best a speculative asset, which btw, houses are not, you live in them or rent them out. Few people buy a house, leave it empty, and expect to sell it for a profit in future. And, as previously discussed, as a store of value bitcoin is about the worst thing you can buy, given the volatility. That's not my opinion, it's a fact and can be measured. Nobody is using bitcoin as a currency, it's too costly, too slow, and too few places even accept it.

[kestonian]

Houses are totally used as speculative assets. And stores of value, of which I would say they have shortcomings compared to bitcoin.

Yes I could rent it out. Same as I can my bitcoin, or my Tesla share.

[Condi]

kestonian said:

Houses are totally used as speculative assets. And stores of value, of which I would say they have shortcomings compared to bitcoin.

Yes I could rent it out. Same as I can my bitcoin, or my Tesla share.

By whom? Who are these people buying houses and leaving them empty?

[g4ry13]

Condi said:

kestonian said:

Houses are totally used as speculative assets. And stores of value, of which I would say they have shortcomings compared to bitcoin.

Yes I could rent it out. Same as I can my bitcoin, or my Tesla share.

By whom? Who are these people buying houses and leaving them empty?

Russian oligarchs, criminals and oil money.

Bishops Avenue is full of empty houses!

[Condi]

g4ry13 said:

Russian oligarchs, criminals and oil money.

Bishops Avenue is full of empty houses!

Ah, the investment for the everyday man!

And also, ironically, the people who need crypto - oligarchs under sanctions, criminals and states which have so much money they build snow slopes in the desert.

[kestonian]

Condi said:

By whom? Who are these people buying houses and leaving them empty?

Between 5 and 8 per cent of Hong Kong property is left empty depending who you ask. Slightly below the rates of Westminster, Kensington & Chelsea for which I’ve seen estimates closer to 50% but still a decent chunk.

[Condi]

kestonian said:

Between 5 and 8 per cent of Hong Kong property is left empty depending who you ask. Slightly below the rates of Westminster, Kensington & Chelsea for which I’ve seen estimates closer to 50% but still a decent chunk.

It's not. It's tiny fractions of 1% of the total house ownership of the country. Tiny tiny fractions.

[kestonian]

Condi said:

It's not. It's tiny fractions of 1% of the total house ownership of the country. Tiny tiny fractions.

I didn’t say it was a lot. I said that property can be a speculative asset, which I believe it can and is.

By the same token, the majority of trading in US stocks these days is undertaken by speculators that couldn’t give two hoots about dividends, intrinsic value, discounted future cash flows, chattels or other such concepts.

Not everyone has the same intention or view. Its what creates a market.

[Condi]

kestonian said:

I didn’t say it was a lot. I said that property can be a speculative asset, which I believe it can and is.

By the same token, the majority of trading in US stocks these days is undertaken by speculators that couldn’t give two hoots about dividends, intrinsic value, discounted future cash flows, chattels or other such concepts.

Not everyone has the same intention or view. Its what creates a market.

You said it was "a decent chunk" (quote), which it clearly isn't. Property can be used as a speculative asset but its exceptionally unusual given the same property can be rented out and generate a return. The very wealthy who may own empty property are few and far between.

Equally, traders in US stocks are not trying to claim it's an investment, a store of value, or anything other than a quick buck. If that's all Bitcoin is then cool, I appreciate that point of view, but if that's the case then don't claim it's a store of value or an investment! Equally traders are very upfront that all their profits come from other people taking an opposing point of view. They understand differing views are needed to create a market, something sometimes lost in this thread!

[greengreenwood7]

@ Condi.....

"What use does Bitcoin or any other crypto have?"

You've posted enough on here, so i guess that's not a joke question?
I'm pretty sure that when the internet was invented or rather slowly 'released' to the public that kind of comment "what use will this have" was repeated over and over, same as when personal computers came to households in the 80's.

I think that the next short time period will show what use BTC has, and the same for a few ( a very few) cryptos.
Whether the push by some of those to decentralize current operations truly becomes 'a thing' - we'll see, but for sure i'd wager heavily that smart contracts, paymnent rails, decentralized finance will definitely be 'a thing', very fast.

You think that entities like B/Rock are giving lip service to talking about the real world tokenization of assets?

We're not too badly off in countries like Uk/US, atleast compared to other countries with hyperinflation & debasement - for those, i'd suggest that having a bit of wealth in an asset such as BTC which has a amount of inflation would be prudent. And although UK/US spout about strength of the economy etc, deep down they know the system is totally fked.

FIAT not underwitten by a common store of value is the greatest ponzi of all.

Far as i can tell, seems the biggest arguments against BTC are 'whats it for/its volatile'. Well the latter may well change, given adoption is increasing and scarcity is growing - it may take brave moves to try and influence large drawdowns.
As to what its for....folks can choose AT THIS MOMENT how they percive it's use to them: hedge against trad markets, an opportunity to get exceptional alpha returns, a payments mechanism with finality that eclipses trad rails, etc etc.

To a degree one could argue 'whats the use of Gold' from a personal perspective. Barring trinkets and that which is in fairness used commercially, the vast bulk ( literally) is stuck in vaults - BTC just happens to be stored in cyberspace, with the an accurate ledger.

[kestonian]

Condi said:

You said it was "a decent chunk" (quote), which it clearly isn't. Property can be used as a speculative asset but its exceptionally unusual given the same property can be rented out and generate a return. The very wealthy who may own empty property are few and far between.

Equally, traders in US stocks are not trying to claim it's an investment, a store of value, or anything other than a quick buck. If that's all Bitcoin is then cool, I appreciate that point of view, but if that's the case then don't claim it's a store of value or an investment! Equally traders are very upfront that all their profits come from other people taking an opposing point of view. They understand differing views are needed to create a market, something sometimes lost in this thread!

I stand by my 5-8% of HK domestic property being empty being a decent chunk. The government survey is on the lower end of that.

The ONS has the England-wide figure as 6.1% with caveats that this will include some that are used infrequently rather than totally vacant. Some parts of London are clearly much higher.

The renting out to generate a return is another thread entirely and it’s understandable why some simply choose not to.

But at least we can agree that it takes different view to make a market, and a thread . I’m quite happy with bitcoin’s storage properties. You’re clearly not and that’s fine, too.

[Condi]

greengreenwood7 said:

@ Condi.....

"What use does Bitcoin or any other crypto have?"

You've posted enough on here, so i guess that's not a joke question?

Not a joke at all, quite a fundamental question for anyone who's putting money into it to understand, I would have thought.

greengreenwood7 said:

I'm pretty sure that when the internet was invented or rather slowly 'released' to the public that kind of comment "what use will this have" was repeated over and over, same as when personal computers came to households in the 80's.

Possibly, although the internet had very obvious benefits from the start and was actively funded by Governments who saw the benefits as being useful to society. Increasing the speed of information transfer has been something humans have been trying to achieve ever since man first ran from one village to the next, and the internet is just an extension of that progress, in the same way the telegram and morse code was, followed by the telephone later on.

greengreenwood7 said:

I think that the next short time period will show what use BTC has, and the same for a few ( a very few) cryptos.
Whether the push by some of those to decentralize current operations truly becomes 'a thing' - we'll see, but for sure i'd wager heavily that smart contracts, paymnent rails, decentralized finance will definitely be 'a thing', very fast.

But why though? Bitcoin has been around well over 10 years, and it's been at least 6 years since some of the biggest commodity traders in the world tried to use smart contracts to track/manage a shipment of soyabeans from Brazil to Europe(/China?). What has changed, or is going to change, which wasn't available 6 years ago or 10 years ago? If anything the number of places accepting Bitcoin as a payment method has decreased, not increased. Musk famously said Tesla would take Btc as payment, only to abandon that idea 6 months later.

greengreenwood7 said:

You think that entities like B/Rock are giving lip service to talking about the real world tokenization of assets?

I think Blackrock are in favour of anything they can charge their clients to access. As far as I am aware, Blackrock are not holding any bitcoin on their own account. Also, there is a difference between tokenizing assets, and Bitcoin. Tokenizing assets is no different to offering shares, in many ways, it's just a ledger of who owns what. There are clear advantages to that for finance companies, however that is not the same as saying Btc should be worth anything. No ledger of assets is going to run on Btc and you don't need Btc to run the ledger.

The 2 are different - Blackrock as an asset manager will offer access to Btc + Btc ETF's because they can charge their clients money to do so, and Blackrock will make more money off that than more vanilla products. Blackrock don't care what happens to Btc price as they simply charge a fee.

A ledger of assets/tokenised assets has nothing to do with Btc or any crypto currency, and will likely be on a private or semi-private ledger run by finance companies and overseen by regulatory bodies. It is essentially nothing more than a big semi-public database.

greengreenwood7 said:

We're not too badly off in countries like Uk/US, atleast compared to other countries with hyperinflation & debasement - for those, i'd suggest that having a bit of wealth in an asset such as BTC which has a amount of inflation would be prudent. And although UK/US spout about strength of the economy etc, deep down they know the system is totally fked.

FIAT not underwitten by a common store of value is the greatest ponzi of all.

This has some merit, for countries which suffer from inflation. I would still argue it's a fairly poor, store of value mind, even for countries with high inflation. Inflation might be 20% per year. Btc can drop 20% in a few weeks. Inflation is predictable, Btc is not. Look at a lifetime Btc price graph, if you bought in Nov 2021, by Nov 2022 you've lost 75% of your assets and will need to wait another 2 years before it is back to the level you bought at. All very well if you can wait until it recovers, not so useful if you have bills to pay in the meantime.

The "ponzi" which underwrites FIAT money is that it is the only way you can pay your taxes and the only official currency of the country you live in - unless you happen to live in Ecuador.

greengreenwood7 said:

Far as i can tell, seems the biggest arguments against BTC are 'whats it for/its volatile'. Well the latter may well change, given adoption is increasing and scarcity is growing - it may take brave moves to try and influence large drawdowns.
As to what its for....folks can choose AT THIS MOMENT how they percive it's use to them: hedge against trad markets, an opportunity to get exceptional alpha returns, a payments mechanism with finality that eclipses trad rails, etc etc.

To a degree one could argue 'whats the use of Gold' from a personal perspective. Barring trinkets and that which is in fairness used commercially, the vast bulk ( literally) is stuck in vaults - BTC just happens to be stored in cyberspace, with the an accurate ledger.

Folks can perceive it to be what they like, but it would be interesting to know why people hold these opinions and debate the evidence. Maybe "digital gold" is the answer (sans gold's actual usage for electronics, heat shielding, jewellery etc). If so then it's not what it set out to be, and not what it was designed to be used for. However, I would strongly argue that until it finds a real world use then it will simply rely on more people wanting to buy to keep the price up, and eventually that supply of new buyers will run out. It costs money to trade it, it generates no return, and once the volatility goes out of it then what is the advantage of holding it when you can put the cash in the bank and get a 5% return?

[greengreenwood7]

@ condi

- and there you have it - a total miusunderstanding; you keep banging on about btc and crypto currency

btc is NOT like the 10's of thousands of crypto PROJECTS; you asked what benefits etc there'd be from crypto, i gave you some and yet you circle back to BTC.

You might do better to separate the 2:
BTC and crypto projects, and then from those 'projects' separate them further until you get to see the top projects and what they bring to the table now - which i'd argue is similar in some ways to the early internet; useful for some, not for all. Hence my view that time, and likely a short time will bring change or the option of change to many.

Clearly pointless debating with you, as on the one hand you agree with statements ie/ internet adoption by way of a similar 'new technology' and then argue the opposite when it comes to these new technologies.

I get that BTC is a devisive technology, but there's plenty of institutions who are onboard and more getting onboard every week. Not necessarily just offering it to their retail customers, but adding it to their own held assets. I imagine they'll have done their homework.

[Condi]

greengreenwood7 said:

@ condi

- and there you have it - a total miusunderstanding; you keep banging on about btc and crypto currency

btc is NOT like the 10's of thousands of crypto PROJECTS; you asked what benefits etc there'd be from crypto, i gave you some and yet you circle back to BTC.

You might do better to separate the 2:
BTC and crypto projects, and then from those 'projects' separate them further until you get to see the top projects and what they bring to the table now - which i'd argue is similar in some ways to the early internet; useful for some, not for all. Hence my view that time, and likely a short time will bring change or the option of change to many.

I do agree that semi-private ledgers of tokenised assets probably have a future, but these will be largely/solely a B2B solution and will not require any coins, have any opportunity to "trade" or make a profit from, and will simply be a more robust and open database of who owns what, or things to that effect.

However, as I see it, there is no future for anything calling itself a "currency" or "coin" or whatever else retail investors see, simply because they serve little or no utility. Once you take away the volatility, which it is generally assumed must happen for them to be a store of value or anything approaching a currency then you remove the biggest reason 90% of people invest, and at that point holding whatever it is is less beneficial than holding cash in the bank which pays interest.

greengreenwood7 said:

I get that BTC is a devisive technology, but there's plenty of institutions who are onboard and more getting onboard every week. Not necessarily just offering it to their retail customers, but adding it to their own held assets. I imagine they'll have done their homework.

Such as who? What institutions are adding it to their own assets? And they're using it for what? As far as I know the large finance houses (such as Blackrock) are not holding it on their own accounts.

Most of your post is about how the future is going to be projects which are not currencies/coins, and then at the end say how Btc adoption is increasing. You accuse me of "circling back to Btc" then do so yourself at the end of your post!

[dimots]

Condi said:

Such as who? What institutions are adding it to their own assets? And they're using it for what? As far as I know the large finance houses (such as Blackrock) are not holding it on their own accounts.

Are you debating the technicalities of custodial solutions here? Blackrock are legally obligated to hold bitcoin. I suspect you don't understand what you are talking about here so I'll explain.

Blackrock is only allowed to sell 'paper' bitcoin to customers if they hold physical bitcoin to back it. SEC decided that. Good idea, financial services companies selling st they don't own is why the economy looks like it does.

The bitcoin they buy are held by Coinbase, their custodial partner. This is a storage solution akin to putting your gold in a vault. It's unnecessary because it's very easy to custody your own bitcoin, but this is probably just a case of liability management. It's on Coinbase if it gets lost.

Therefore although legally the bitcoin Blackrock owns are owned by their customers, it is Blackrock who bought the bitcoin, and it is Coinbase who hold the keys.

Forget the legality of this, because laws can change and bitcoin is forever. Not your keys, not your coins is the maxim that applies here

[Condi]

dimots said:

Are you debating the technicalities of custodial solutions here? Blackrock are legally obligated to hold bitcoin. I suspect you don't understand what you are talking about here so I'll explain.

No, I'm saying that Blackrock have no, or very little exposure to Btc. They don't take the risk. They simply buy on behalf of customers, and charge them a fee for doing so. Blackrock are not "backing" Btc, or taking any opinion on it's future, it's price direction, it's utility. It could be literally anything.

[dimots]

Condi said:

No, I'm saying that Blackrock have no, or very little exposure to Btc. They don't take the risk. They simply buy on behalf of customers, and charge them a fee for doing so. Blackrock are not "backing" Btc, or taking any opinion on it's future, it's price direction, it's utility. It could be literally anything.

Well that's semantics and it's like saying Blackrock don't have any exposure to anything. They manage their client's exposure to assets and they hold 200k BTC so...

[Condi]

dimots said:

Well that's semantics and it's like saying Blackrock don't have any exposure to anything. They manage their client's exposure to assets and they hold 200k BTC so...

It's not semantics at all. For all the talk about "Blackrock involved in Btc OMGGG", it means nothing as Blackrock are just providing a service. Blackrock are not taking any view at all about anything to do with Bitcoin, they're not "backing it", they're not investing their own money in it (or, as I understand it in any of their own managed portfolios), they're just offering market access.

[BandOfBrothers]

Condi said:

However, as I see it, there is no future for anything calling itself a "currency" or "coin" or whatever else retail investors see, simply because they serve little or no utility.

Aren't you missing the very aspect that makes BTC unique and valuable amongst crypto currencies - its complete decentralisation?

If you don't see that as valuable and unique to BTC, then I'd suggest you don't actually understand it.

[Condi]

BandOfBrothers said:

Aren't you missing the very aspect that makes BTC unique and valuable amongst crypto currencies - its complete decentralisation?

If you don't see that as valuable and unique to BTC, then I'd suggest you don't actually understand it.

I understand why it's unique, but don't see why it's valuable.

Maybe you could explain the benefits to average Joe? Someone who has a bank account, a middle income salary, pays his mortgage on time, uses credit cards to buy things online.

If the answer is "it's not for them", then who's it for? Even Nigerians in the middle of nowhere have payment via their mobile phones.