Crypto Currency Thread (Vol.2)

[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.

[dimots]

Condi said:

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.

Watch this. 15 minutes and you should understand everything from what we mean when we say bitcoin is a protocol, to the applications of it, to why decentralization is essential, to why bitcoin is so secure, to why hash rate is so important. It's one of the most comprehensive introductions to bitcoin I have seen.

https://www.youtube.com/watch?v=5_HW0x8V0o4

[BandOfBrothers]

Condi said:

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.

It's not currently for the average Joe, that doesn't mean it will never be.

It's incredibly (and uniquely) valuable if your government goes tits up, or decides it wants to take your assets or other governments place sanctions against your government and national currency.

I suspect a lot of the current demand is from Russians.

[Blown2CV]

decentralisation is only a benefit to a particular group of the population; mainly tinfoil hat people. The rest of the population either believe centralisation is a good thing, and the rest don't give a fk... certainly not enough to have to deal with the complexities and volatility of crypto.

[BandOfBrothers]

Blown2CV said:

decentralisation is only a benefit to a particular group of the population; mainly tinfoil hat people. The rest of the population either believe centralisation is a good thing, and the rest don't give a fk... certainly not enough to have to deal with the complexities and volatility of crypto.

I wonder if the Russians thought that 3 years ago too?

Not to mention that the vast majority of the Western governments have national debts levels that would have been considered crippling even only a decade ago. That all has to unwind somehow too.

[Condi]

dimots said:

Watch this. 15 minutes and you should understand everything from what we mean when we say bitcoin is a protocol, to the applications of it, to why decentralization is essential, to why bitcoin is so secure, to why hash rate is so important. It's one of the most comprehensive introductions to bitcoin I have seen.

https://www.youtube.com/watch?v=5_HW0x8V0o4

I get "what" it is, I don't "why" it is. He calls it "cash for the internet" which clearly is inferior to using a credit card for most people, not least because anyone in the UK using a credit card gets Section 7 protection, and is also protected against scams and fraud by the bank being liable.

It also makes me laugh that he claims central banks are held back by their own rules, and yet Bitcoin has far far more ridged rules than central banks operate under. Central banks can, pretty much, do what they like - they are judged by investors and the market - there are very few central bank rules which "cannot be broken".

[RichTT]

Condi said:

there are very few central bank rules which "cannot be broken".

"The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust."

Satoshi Nakamoto

One doesn't wait until your house is burned down to buy some insurance.

[dimots]

Condi said:

I get "what" it is, I don't "why" it is. He calls it "cash for the internet" which clearly is inferior to using a credit card for most people, not least because anyone in the UK using a credit card gets Section 7 protection, and is also protected against scams and fraud by the bank being liable.

It also makes me laugh that he claims central banks are held back by their own rules, and yet Bitcoin has far far more ridged rules than central banks operate under. Central banks can, pretty much, do what they like - they are judged by investors and the market - there are very few central bank rules which "cannot be broken".

He's talking about creating an electronic protocol for cash. You don't seem to understand what that means in terms of why it is good and why it is a logical and practical improvement to the system of money we have now. The root of your entire position seems to be 'Money needs banks'.

Money doesn't need banks. Or governments. Money can be completely democratised. In fact, I'd go much further than that...ownership of everything can be democratised through tokenization AS LONG AS that tokenization is decentralised.

I don't know why you are so locked into your little bubble, it's weird tbh.

[Condi]

dimots said:

He's talking about creating an electronic protocol for cash. You don't seem to understand what that means in terms of why it is good and why it is a logical and practical improvement to the system of money we have now. The root of your entire position seems to be 'Money needs banks'.

Money doesn't need banks. Or governments. Money can be completely democratised. In fact, I'd go much further than that...ownership of everything can be democratised through tokenization AS LONG AS that tokenization is decentralised.

I don't know why you are so locked into your little bubble, it's weird tbh.

I don't see why you are unable to understand the economics and realpolitik of money and why it is highly beneficial that central banks can control the supply of that money and change interest rates, and why it is economically useful that currencies can float relative to one another. It's weird tbh.

Didn't you learn much from the Euro crisis in 2008/2010, when countries were unable to devalue their own currency compared with other countries? If a single currency barely works across Europe it's never going to be something which can apply across the world. Also a clear issue with something which is limited to 21m coins is that people hoard it because they think it's always going to go up in value. Look at the past few pages of this thread - it's not a currency it's a store of value/investment (apparently). It always goes up in value! Great, but totally useless for use as "digital cash" if nobody wants to spend it!

And again, for 99.99% of people this does nothing which is an improvement over the systems they already have. You seem either naïve to or are simply ignoring the issues with Btc, and while in your opinion Btc is better than what we have, you've never once explained why Average Joe would benefit from Btc over £/$.

[RichTT]

Condi said:

I don't see why you are unable to understand the economics and realpolitik of money and why it is highly beneficial that central banks can control the supply of that money and change interest rates, and why it is economically useful that currencies can float relative to one another. It's weird tbh.

It's useful in a centrally planned monetary system. Which is extractive and a net negative for most regular people in the economy. The cantillon effect is alive and well in every wealth distribution chart you might wish to peruse. If your savings are constantly devalued through inflation of the money supply you need to become a savvy investor in order to beat inflation and not become poor. This is also evident in the long term trends of asset and equity price inflation (in fiat terms) and the down trend in savings and a strategic disincentive to save in 'money'.

Keynsian economics is non-sensical because it supposes that a centralised authority is omniscient to the monetary needs of an organic and highly complex financial system. This is now slowly unravelling due to the excessive debt loads and the very real knowledge that $1 spent to stimulate an economy does not yield $1 of economic growth and that number is falling by the year.

Mises said:

Sustainable economic growth depends on individual producers’ freedom to divide their income into consumption and saving in accordance with their own preferences, not the preferences assumed for them by politicians and bureaucrats. It is a bizarre delusion to argue that a sustainable outcome which reflects agent preferences can be improved by manipulating interest rates or credit markets. At best, such manipulations can only increase short-term production through inflation. As repeated experience has demonstrated, they can also bring about speculative bubbles and recurrent recessions which make welfare-maximizing consumption smoothing impossible. Monetary expansion and deficit financing should hardly be promoted as welfare-enhancing policy measures, the Keynesian resurgence notwithstanding.

https://mises.org/quarterly-journal-austrian-economics/central-fallacy-keynesian-economics

Condi said:

Didn't you learn much from the Euro crisis in 2008/2010, when countries were unable to devalue their own currency compared with other countries?

Yes, I learned that I don't want faceless bureaucrats in a central bank deciding when we should accept that our money has been devalued.

Condi said:

And again, for 99.99% of people this does nothing which is an improvement over the systems they already have. You seem either naïve to or are simply ignoring the issues with Btc, and while in your opinion Btc is better than what we have, you've never once explained why Average Joe would benefit from Btc over £/$.

No, it's better for some. Its worse for others. That 99% in one country that it doesn't 'work' for, could be 99% of people in a country that it does work for. That doesn't mean that it has failed, just that it is entirely situational.

[BandOfBrothers]

Condi said:

dimots said:

He's talking about creating an electronic protocol for cash. You don't seem to understand what that means in terms of why it is good and why it is a logical and practical improvement to the system of money we have now. The root of your entire position seems to be 'Money needs banks'.

Money doesn't need banks. Or governments. Money can be completely democratised. In fact, I'd go much further than that...ownership of everything can be democratised through tokenization AS LONG AS that tokenization is decentralised.

I don't know why you are so locked into your little bubble, it's weird tbh.

I don't see why you are unable to understand the economics and realpolitik of money and why it is highly beneficial that central banks can control the supply of that money and change interest rates, and why it is economically useful that currencies can float relative to one another. It's weird tbh.

Didn't you learn much from the Euro crisis in 2008/2010, when countries were unable to devalue their own currency compared with other countries? If a single currency barely works across Europe it's never going to be something which can apply across the world. Also a clear issue with something which is limited to 21m coins is that people hoard it because they think it's always going to go up in value. Look at the past few pages of this thread - it's not a currency it's a store of value/investment (apparently). It always goes up in value! Great, but totally useless for use as "digital cash" if nobody wants to spend it!

And again, for 99.99% of people this does nothing which is an improvement over the systems they already have. You seem either naïve to or are simply ignoring the issues with Btc, and while in your opinion Btc is better than what we have, you've never once explained why Average Joe would benefit from Btc over £/$.

Who is hoarding BTC?

And BTC is no more speculative in its nature than gold, apparently the most popular store of wealth. People are choosing to speculate in it, but they could equally choose to speculate in tulips.

In fact BTC has fewer speculative qualities than gold, because the finite amount is known and it doesn't have any other use than as a currency to distort demand.

And arguing that removing a government's ability to devalue currency to get itself out of trouble as a positive is questionable too.

[Condi]

BandOfBrothers said:

Who is hoarding BTC?

Everyone who considers it an investment rather than a currency. Everyone who is not using it for what it was designed to do. IE, most people on this thread who have spent the last 3 pages arguing it's an investment and look how much money we've made!

BandOfBrothers said:

And BTC is no more speculative in its nature than gold, apparently the most popular store of wealth. People are choosing to speculate in it, but they could equally choose to speculate in tulips.

In fact BTC has fewer speculative qualities than gold, because the finite amount is known and it doesn't have any other use than as a currency to distort demand.

Is this bit true? I would guess the amount of money in shares/bonds/gilts vastly exceeds the amount in gold.

And you're right, it has very few uses, but you seem to be confusing yourself - you're saying it's use is as a currency then saying people are using it to speculate with. Evidence of its use as a currency is very few and far between, very few places accept bitcoin.

BandOfBrothers said:

And arguing that removing a government's ability to devalue currency to get itself out of trouble as a positive is questionable too.

Why is it questionable? The ability to float currencies is a huge buffer or crash barrier against economic conditions, by actively making the country more competitive and so going some way to offset the economic hardship of the people.

Unless you have a considered opinion to the contrary, rather than just dismissing it because in your idealised world you don't like the idea.