Crypto Currency Thread

Crypto Currency Thread

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Behemoth

2,105 posts

130 months

Friday 19th January 2018
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All this leads to some very fundamental economics. Arguments about fees, volatility etc are short term transient elements of an emerging system. This is the long term view:

The value of a currency is determined by the exchanging parties agreeing to its value. At the micro level, decentralised cryptocurrency is designed to allow individuals to hold and exchange value securely and easily, without needing permission to use it from a central authority (whether that authority be a bank, a government or Paypal).

At a macro level, things get very interesting. The fundamental tenet is that crypto heads towards the Austrian school of economic thought, which is very much counter to the traditional Keynesian approach.

Crypto arrived with Bitcoin precisely because of the 08 financial crash. Decentralised cryptocurrency like Bitcoin is libertarian and anarchic in flavour, because it gives power to the individual to exchange value directly with another individual without interference. You're of course free to profoundly disagree with Austrian economic theory (many do) and you're free to support the Keynesian status quo (many do). However, the economic thinking behind Bitcoin's creation won't change. Mass adoption of a centralised crypto will lead to a continuation of our Keynesian world. Mass adoption of a decentralised crypto will slowly turn that world upside down.

For those wanting to know more about the macro economic backgrounds to decentralised crypto: https://en.wikipedia.org/wiki/Austrian_School & https://en.wikipedia.org/wiki/Keynesian_economics

syko89

366 posts

157 months

Friday 19th January 2018
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What exchange are you all using, and are you trading for USDT (tether) if you are expecting a big dip?
Any idea of the fee's involved?

I'm on binance but I can't trade XRP for USDT, I'd first have to trade for ETH/BTC.

Behemoth

2,105 posts

130 months

Friday 19th January 2018
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andy ted said:
The richest people in the world would be the early adopters and everyone else who is in ‘early’ becomes millionaires from a few thousand pounds original investment
Early adopters of crypto are taking enormous risks and their invested capital ultimately funds the development of these technologies and infrastructures. If it succeeds, they are right to be rewarded. If it fails, likewise, they are right to lose out. If you think every citizen should get a free coin, maybe head to Venezuela? wink

1% of the planet's population owns 50% of the wealth. Some of it through risk taking, some of it through outright theft by themselves or their ancestors (land grabs, wars, kleptocracy etc). The crypto risk / reward model will rightly play out.

NickCQ

5,392 posts

95 months

Friday 19th January 2018
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Behemoth said:
Keynesian status quo
I'm not sure this exists. Since the late 70's when it became apparently that the Keynesian model was not effectively describing the economy (stagflation etc) most advanced economies have been more or less monetarist - the primary policy framework in the US, UK and Eurozone has been inflation targeting through use of the money supply and interest rates. The nexus between Thatcher, Reagan, Hayek and Friedman was strong so describing the Austrian school as some kind of kooky heterodox idea is not that accurate.

Keynes made a bit of a comeback in 2008 for sure, but again the austerity policies of much of the West have no basis in Keynes. Remember that Keynes was instrumental in setting up the Bretton Woods system post WWII and was more or less an advocate of the gold standard (at appropriate exchange rates) throughout his life. It was Nixon that closed the gold window in '72.

Behemoth

2,105 posts

130 months

Friday 19th January 2018
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NickCQ said:
I'm not sure this exists. Since the late 70's when it became apparently that the Keynesian model was not effectively describing the economy (stagflation etc) most advanced economies have been more or less monetarist - the primary policy framework in the US, UK and Eurozone has been inflation targeting through use of the money supply and interest rates. The nexus between Thatcher, Reagan, Hayek and Friedman was strong so describing the Austrian school as some kind of kooky heterodox idea is not that accurate.

Keynes made a bit of a comeback in 2008 for sure, but again the austerity policies of much of the West have no basis in Keynes. Remember that Keynes was instrumental in setting up the Bretton Woods system post WWII and was more or less an advocate of the gold standard (at appropriate exchange rates) throughout his life. It was Nixon that closed the gold window in '72.
Thanks for the correction & comment. Yes, a Friedman/Keynes status quo would be a much more accurate description. Whilst Thatcher was certainly deeply into Hayek, Bitcoin takes the Austrian school and individualism to an entirely novel level that she would never have supported.

soupdragon1

3,966 posts

96 months

Friday 19th January 2018
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Condi said:
Ok, but my point is that if I want to send money, I can do, via Paypal, credit card, bank transfer, mobile phone number, cash, whatever. Non of these have transaction costs. You also say when, I say, IF. And nobody is going to use a wildly volatile currency to store money in, when they can keep it in Sterling and its value is stable. If you put 10k in ether and it dropped by 50%, you'd be furious and never use it again.

Meh, sorry, your answer doesnt answer anything. Its another angle, I grant you, but its not going to change the world, because its trying to solve problems which dont exist. The mere fact there are transaction fees puts it at a big disadvantage compared with jumping on your banking app and sending money, or indeed using your debit/credit card online.
It might 'appear' that the consumer doesn't pay any transaction charges for all this but the reality is, we do - and its a fair chunk. Its already built into the price of everything we buy.

If I buy something from ebay, where sellers are charged pretty hefty paypal fees - the seller builds that fee into his price so that they can still make a profit. Big retailers such as John Lewis, Tesco, Sainsburys etc all offer credit card payments, and visa/mastercard charge a fee. The retailer build this cost into the price they can sell the goods for. So yes - we do pay these fees....who else do you think pays for them?

Talking about retail - I think the big 4 supermarkets last year were operating at something like a 2% profit margin. Wafer thin. If their sales include say, 1% worth of transaction fees for card use then potentially, without any fees, they would increase their operating profits by 50%!!! Just by having no fees!!!

Of course, there will always be fees, but banking/transaction fees across the world will be a mind boggling number. Making a dent in this would be massive. Say for example, one company used a new 'low fee' solution for their business. To maintain a competitive edge, the competition will also want a piece of the pie too, otherwise their competitor would be undercutting them due to having a margin advantage.

I'm not saying current cryptos that people are buying are the way forward. I hear people saying that XRP could replace Swift and that type of thing. A quick google tells you that Swift aren't sitting on their hands, waiting for XRP to replace them. Swift are modernising big style at the moment - pushing forward with quicker and cheaper transaction times. Anyone thinking that XRP is on a straight road to domination in that space is thinking wishfully.

One thing I think is true is that the crypto evolution will change the way we use money in the future, slicker and cheaper. But lets be mindful, big banking industries won't necessarily pick an existing crypto an run with it. Heck, the crypto of the future might not even exist yet!

NickCQ

5,392 posts

95 months

Friday 19th January 2018
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Behemoth said:
Thanks for the correction & comment. Yes, a Friedman/Keynes status quo would be a much more accurate description. Whilst Thatcher was certainly deeply into Hayek, Bitcoin takes the Austrian school and individualism to an entirely novel level that she would never have supported.
Agreed on your last point certainly. That's kind of the contradiction of Thatcher - individualism without privacy: state control and intrusion for those deemed 'unhelpful'.

anonymous-user

53 months

Friday 19th January 2018
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https://www.coinmarketcal.com

basically a crpto calendar for upcoming events and releases.

Edited by The Spruce goose on Friday 19th January 13:02

jonamv8

3,145 posts

165 months

Friday 19th January 2018
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So I'm seeing a few places stating they will accept crypto, cars watches house sales etc...it's a good marketing angle but are they seriously going to take 1btc for a Daytona they have £1,250 profit in and see the profit get wiped out in 30 mins trading?!

andy ted

1,284 posts

264 months

Friday 19th January 2018
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x5x3 said:
andy ted said:
Both scenarios fundamentally make no sense to me tell me what I am missing?

Edited by andy ted on Thursday 18th January 23:29
it is comments like this which stop me contributing too much to this thread.

If you believe the hype and the FUD and remain stuck in 1950's economic textbooks then great - enjoy your world.

I posted a link several posts up to a topic discussing people running Lightning Network nodes on the main BTC network.

When LN arrives it will offer very low cost and virtually instant transactions.

I do get it that most people here don't care about the technology but if BP/GM/any big traditional company announced a major breakthrough in x then you'd all be rushing to buy shares.


Edited by x5x3 on Friday 19th January 10:37
Not sure there is any need for hostility? So are you all in on BTC and holding until you can use it transactionally or are you selling back to FIAT when you have made a profit?

Just FYI - I would actually consider a punt if you could buy shares in Ripple, however I would not consider buying XRP - I hope you can see the fundamental difference

andy ted

1,284 posts

264 months

Friday 19th January 2018
quotequote all
Behemoth said:
andy ted said:
The richest people in the world would be the early adopters and everyone else who is in ‘early’ becomes millionaires from a few thousand pounds original investment
Early adopters of crypto are taking enormous risks and their invested capital ultimately funds the development of these technologies and infrastructures. If it succeeds, they are right to be rewarded. If it fails, likewise, they are right to lose out. If you think every citizen should get a free coin, maybe head to Venezuela? wink

1% of the planet's population owns 50% of the wealth. Some of it through risk taking, some of it through outright theft by themselves or their ancestors (land grabs, wars, kleptocracy etc). The crypto risk / reward model will rightly play out.
not sure the early adopters took massive risks? The people gambling 15k etc. on a punt a couple of years ago and now are on paper worth millions (measured in dollars of course!). They don't look to me like the the type of people who you describe sticking it to the establishment just maybe younger versions of the current wealth holders! Their crypto holdings currently have no value other than measured in dollars and need people to buy them out back into dollars etc. for them to do anything with their gains.

I did actually get free coins as I held BTC when it forked to Bitcoin cash. This was the tipping point in my mind that it makes no sense - the only way I could capitalise on that value was to sell it to someone for dollars etc - or sit on them until I could spend them. Assuming it became the adopted tech (or I swapped them into one of the few coins that go somewhere) then they would go up in value even more. In which case I had 'free' money that had come from nowhere that I could now spend. So back to my original point where has that value come from and how would the buying power of what 1 BCH (or whatever was adopted as the crypto of choice) could buy you be set? If it was still measured in dollar value then dollars couldn't devalue to nothing and I can't see how it can be anything other than zero sum (someone has to lose for someone else to gain) though like I originally said I may be missing something - genuinely!

ETA - just seen your links on the Austrian School theory - will take a read!





Edited by andy ted on Friday 19th January 13:48


Edited by andy ted on Friday 19th January 13:52

Behemoth

2,105 posts

130 months

Friday 19th January 2018
quotequote all
andy ted said:
not sure the early adopters took massive risks? The people gambling 15k etc. on a punt a couple of years ago and now are on paper worth millions (measured in dollars of course!). They don't look to me like the the type of people who you describe sticking it to the establishment just maybe younger versions of the current wealth holders! Their crypto holdings currently have no value other than measured in dollars and need people to buy them out back into dollars etc. for them to do anything with their gains.
Risks, timing & opportunity change over time. Someone taking a punt when prices were lower was still taking a very heavy risk for that market, at that time. Someone spending $100 5,6 years ago was taking a risk by putting a huge amount of effort (effort=$) working out what crypto was and how it works and how to buy it. And if you search back, plenty of people frequently say in forum threads "I'm probably going to lose all of this $100". Many cashed out when that $100 went up to $200. It only seems like small money to you now because it has gone up.

The buying power of any currency or asset is set by the market (govt interference aside). There's someone selling a Lambo at a crypto conference in the US at the moment. The pricing of it is his to set and the risk is his to bear. If someone offered me BTC for something I own, any forex risk short term or long term is mine to bear. I don't necessarily need to think about that in dollars or sterling, because there are alternatives to index against.

dimots

3,013 posts

89 months

Friday 19th January 2018
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I got paid £4000 in btc Thursday, it was £4163.34 by the time it arrived in my wallet.

It doesn't always go down biggrin

HannsG

3,031 posts

133 months

Friday 19th January 2018
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So the French and Germans want to regulate Crypto it in the words of idiotic journos ban it?

Banning is not same as regulation. Till this day USD is the best currency for illegal trades as any cryptocurrency is trackable. And to buy it you have to use bank account. And i doubt anyone in sane mind would go to bank to deposit illrgal cash in large amounts. All news can try to scare off people from cryptos but more and more will join the network. And it may soon create banks only as secondary institution for money transactions.

Decentralization is key when it comes to determining how much control a government entity truly has. Because you can transfer cryptocurrencies peer-to-peer, even when governments try to crack down on exchanges and crypto investments people will still find ways to trade with each other. It will be very expensive to annihilate cryptocurrencies (if not impossible). People will still be able to send and receive money in the form of cryptocurrencies, and they will find a way to obfuscate their transactions. Of course, this may not be legal to do, especially if the country you live in has some laws that prevent you from trading crypto, but it is reminiscent of the days when businesses tried to ban the BitTorrent protocol.

Meanwhile Johnson wants to build a fking bridge. The world has much bigger issues that crypto. Seriously why is it even a topic..

x5x3

2,422 posts

252 months

Saturday 20th January 2018
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link showing number of state of the Lighting Network on the BTC Mainnet.

I'm not suggesting anyone non-technical on here try this yet - it is still development code.

For those keen to try on the BTC testnet - easy to follow LN setup guide for Mac users here.

Bets for number of channels by the end of the month?

CzechItOut

2,154 posts

190 months

Saturday 20th January 2018
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HannsG said:
So the French and Germans want to regulate Crypto it in the words of idiotic journos ban it?

Banning is not same as regulation. Till this day USD is the best currency for illegal trades as any cryptocurrency is trackable. And to buy it you have to use bank account. And i doubt anyone in sane mind would go to bank to deposit illrgal cash in large amounts.
Let me introduce you to LocalBitCoins, where people offer to buy your bitcoin by depositing cash over the counter, directly into your bank account.

x5x3

2,422 posts

252 months

Saturday 20th January 2018
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CzechItOut said:
Let me introduce you to LocalBitCoins, where people offer to buy your bitcoin by depositing cash over the counter, directly into your bank account.
or indeed cash in hand.

dimots

3,013 posts

89 months

Saturday 20th January 2018
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x5x3 said:
or indeed cash in hand.
And don’t forget you can deposit cash into bitcoin/crypto ATMs and withdraw direct to your crypto wallet of choice.

Behemoth

2,105 posts

130 months

Saturday 20th January 2018
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x5x3 said:
For those keen to try on the BTC testnet - easy to follow LN setup guide for Mac users.
LN is progressing really well. I've been testing an Eclair wallet. Great UX. Android. https://play.google.com/store/apps/details?id=fr.a... . Some brave people are already spending on mainnet with LN, but I'd definitely stick to playing around with testnet for now.

x5x3

2,422 posts

252 months

Saturday 20th January 2018
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I'm intrigued just how dominant Channel Hubs will become. Its a simple concept, setup a LN node, create a channel to each major supplier (e.g. Costa/Amazon/BP/Tesco/etc) and then sit back and take a small fee for connecting consumers.
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