Crypto Currency Thread
Discussion
coyft said:
But that's treating Bitcoin as an asset, not as a medium of exchange. I might have to sell everything out of necessity, the last thing I would sell is the asset that has the potential to increase the most.
Yes, the initial state for Bitcoin is as a store of value, as I have explainedcoyft said:
The price of Bitcoin has risen as those yet to be mined have decreased. The closer we get to the last Bitcoin being mined the higher the price goes. That means that the longer you hold Bitcoin the more you can buy, that is deflationary not inflationary.
A money that has increasing supply is inflationary by definition, regardless of how that money is valued against other currencies. There are periods when Bitcoin's relative value to many other currencies has fallen (like now), despite being ever closer to the last one mined.coyft said:
It's a digital token, it has no intrisic value, the only value you can ascribe is in its ability to act as means of exchange. People aren't using it for that purpose for all the above reasons.
Almost all modern currencies that we use daily, including sterling, have no intrinsic value by definition (fiat). Bitcoin is already being used to transfer value in a limited way, but as I've already explained it is early days and store of value naturally comes first as a use case until adoption & infrastructure grows.it's a massive ephemeral bubble, the only value is in speculation, there's an underlying energy cost vs hashrate mining play going on, but above it's all just a fragile bubble that isn't tied to a physical item with intrinsic value, it's going to blow, but the investment keeps on coming. Every hitch so far has been nervous horses reacting to industry news, I bet a few people made millions on the nvidia profit news; no insider trading laws apply, watch values build, set sell price, release 'bad' news, rebuy...\
I'm small time mining and cashing out as I go, with a little ETH investment on the side, family holiday paid for this year, that'll do.
I'm small time mining and cashing out as I go, with a little ETH investment on the side, family holiday paid for this year, that'll do.
JustinF said:
it's a massive ephemeral bubble, the only value is in speculation, there's an underlying energy cost vs hashrate mining play going on, but above it's all just a fragile bubble that isn't tied to a physical item with intrinsic value, it's going to blow, but the investment keeps on coming. Every hitch so far has been nervous horses reacting to industry news, I bet a few people made millions on the nvidia profit news; no insider trading laws apply, watch values build, set sell price, release 'bad' news, rebuy...\
I'm small time mining and cashing out as I go, with a little ETH investment on the side, family holiday paid for this year, that'll do.
Must be a cheap family holiday - mining aint what it used to be. I'm small time mining and cashing out as I go, with a little ETH investment on the side, family holiday paid for this year, that'll do.
doesn't cost much to sleep in a tent and ride bikes all day, but at my happiest doing just that.Behemoth said:
coyft said:
The price of Bitcoin has risen as those yet to be mined have decreased. The closer we get to the last Bitcoin being mined the higher the price goes. That means that the longer you hold Bitcoin the more you can buy, that is deflationary not inflationary.
A money that has increasing supply is inflationary by definition, regardless of how that money is valued against other currencies. There are periods when Bitcoin's relative value to many other currencies has fallen (like now), despite being ever closer to the last one mined.Quite the reverse in fact: looked at over the medium term and longer, the purchasing power of bitcoin is increasing, per unit of currency, which is deflationary. Hence the argument that people won't spend it today because it will be worth more tomorrow.
For reference see here and here
tertius said:
That is quite misleading. Although the monetary supply is increasing,it is not resulting in price inflation (which is "a reduction in the purchasing power per unit of money" and what most people mean by inflation). In the case of bitcoin, with a well-understood emissions schedule and a limited absolute supply, it is not having that effect.
Quite the reverse in fact: looked at over the medium term and longer, the purchasing power of bitcoin is increasing, per unit of currency, which is deflationary. Hence the argument that people won't spend it today because it will be worth more tomorrow.
For reference see here and here
I have no intent to mislead, the definition of inflationary currency is a statement of fact. An inflationary currency and inflation within an economy are two different things.Quite the reverse in fact: looked at over the medium term and longer, the purchasing power of bitcoin is increasing, per unit of currency, which is deflationary. Hence the argument that people won't spend it today because it will be worth more tomorrow.
For reference see here and here
If Bitcoin accrues purchasing power, that's a different matter and you are correct. This points to a growing use as store of value, though obviously volatile as we've seen with downs since xmas as well as ups which obvs increase its notional purchasing power. Nevertheless, let's assume it will settle out and Bitcoin over the bigger time frames keeps growing in value & by 2040 or thereabouts, Bitcoin stops being made.
The argument that people won't spend today because it will be worth more tomorrow is correct to a degree but the more important aspect is that people won't borrow to buy ephemeral things they desire and cannot afford (like cars on PCP that are way out of their pay bracket). It will lead to reduced consumer debt, because people will buy things they need and can afford & will feel compelled to save more for the future. Note that it's a fallacy to assume this will lead to a stalled economy.
But the poster you were replying to was clearly commenting on its economically deflationary nature so your response that “bitcoin is inflationary” was certainly misleading.
That the monetary supply is currently ‘inflating’ is I think completely irrelevant. Indeed I would argue that a defined release schedule like bitcoin’s probably does not meet the traditional definition of monetary inflation at all, especially when it is so far along (numerically along that is).
That the monetary supply is currently ‘inflating’ is I think completely irrelevant. Indeed I would argue that a defined release schedule like bitcoin’s probably does not meet the traditional definition of monetary inflation at all, especially when it is so far along (numerically along that is).
Behemoth said:
tertius said:
But the poster you were replying to was clearly commenting on its economically deflationary nature so your response that “bitcoin is inflationary” was certainly misleading.
I was clearly responding to "they ain't making anymore" which is incorrect until around 2040Behemoth said:
I have no intent to mislead, the definition of inflationary currency is a statement of fact. An inflationary currency and inflation within an economy are two different things.
If Bitcoin accrues purchasing power, that's a different matter and you are correct. This points to a growing use as store of value, though obviously volatile as we've seen with downs since xmas as well as ups which obvs increase its notional purchasing power. Nevertheless, let's assume it will settle out and Bitcoin over the bigger time frames keeps growing in value & by 2040 or thereabouts, Bitcoin stops being made.
The argument that people won't spend today because it will be worth more tomorrow is correct to a degree but the more important aspect is that people won't borrow to buy ephemeral things they desire and cannot afford (like cars on PCP that are way out of their pay bracket). It will lead to reduced consumer debt, because people will buy things they need and can afford & will feel compelled to save more for the future. Note that it's a fallacy to assume this will lead to a stalled economy.
People can invest in things like pensions/ shares that are less volatile than crypto, yet they still borrow to buy cars on PCP. Why do you think BTC will change consumer behaviourIf Bitcoin accrues purchasing power, that's a different matter and you are correct. This points to a growing use as store of value, though obviously volatile as we've seen with downs since xmas as well as ups which obvs increase its notional purchasing power. Nevertheless, let's assume it will settle out and Bitcoin over the bigger time frames keeps growing in value & by 2040 or thereabouts, Bitcoin stops being made.
The argument that people won't spend today because it will be worth more tomorrow is correct to a degree but the more important aspect is that people won't borrow to buy ephemeral things they desire and cannot afford (like cars on PCP that are way out of their pay bracket). It will lead to reduced consumer debt, because people will buy things they need and can afford & will feel compelled to save more for the future. Note that it's a fallacy to assume this will lead to a stalled economy.
I can’t see any correlation between savings rates and inflation/ deflation. China and Japan have low consumer debt, One has inflation, the other deflation
coyft said:
Reduced consumer debt, more savings and people not buying s
t they don’t need. I can see that resulting in a booming economy. 
Where do you see the current debt levels going? It's helped the economy, but just fast tracked it and and some point presumably people's spending will be affected even more due to debt repayment?t they don’t need. I can see that resulting in a booming economy. tertius said:
That is quite misleading. Although the monetary supply is increasing,it is not resulting in price inflation (which is "a reduction in the purchasing power per unit of money" and what most people mean by inflation). In the case of bitcoin, with a well-understood emissions schedule and a limited absolute supply, it is not having that effect.
Quite the reverse in fact: looked at over the medium term and longer, the purchasing power of bitcoin is increasing, per unit of currency, which is deflationary. Hence the argument that people won't spend it today because it will be worth more tomorrow.
For reference see here and here
It's a bit like saying BTC is secure (more so than banks) because it is unhackable. Whereas your wallet can be hacked, lost, catch fire etc in reality. Quite the reverse in fact: looked at over the medium term and longer, the purchasing power of bitcoin is increasing, per unit of currency, which is deflationary. Hence the argument that people won't spend it today because it will be worth more tomorrow.
For reference see here and here
Anyone watching Billions series 3 will have seen Axe give mcphee $1m in crypto on a memory stick....and there it is right there money transfering with no checks. Sure there is risk of crime (as with cash now) but ar the same time it highlights the beauty of a system outside of banks or goverment control...trully have control of your wealth...of course volatility in the price makes that an issue but say prices stabilise then what.....
coyft said:
DonkeyApple said:
coyft said:
I'm not sure what "onshoring" has to do with credibility. I thought the whole point of Crypto was that it was a trustless currency, not needing an intermediary is its raison d'être and competitive advantage.
I think the problem is more fundamental. In order for it to become money it has to be an effective medium of exchange. That is never going to happen as long as transaction times are counted in minutes. The other problem is that as the supply is limited there is no incentive to exchanging it for goods and services. You may as well hang onto it, 'cause they ain't making anymore.
Given those problems is it really an asset class? If it doesn't derive its value from a medium of exchange, then where is the intrinsic value?
Same as many asset classes, a perception of value etc. I think the problem is more fundamental. In order for it to become money it has to be an effective medium of exchange. That is never going to happen as long as transaction times are counted in minutes. The other problem is that as the supply is limited there is no incentive to exchanging it for goods and services. You may as well hang onto it, 'cause they ain't making anymore.
Given those problems is it really an asset class? If it doesn't derive its value from a medium of exchange, then where is the intrinsic value?
Onshoring as in bringing the holding, exchange and transaction element into the official market place. That’s the only way you can achieve the stability and credibility to allow instantaneous execution and also treat it as a currency. While it remains outside of the ‘system’ it will only ever be used for a small number of transaction types and by a particular group of people.
That’s the whole dichotomy. In order to achieve a genuine status and use as a currency then it needs to effectively transaction a recognised exchange, which as you highlight somewhat undoes the anarchic basis for crypto currencies. But what we are really looking at today is cryptos V1 and like an Indie band that pisses off its 5 original fans by becoming mainstream, so will plenty of punters squeal when V2 of the crypto currency world does the same thing.
What do you mean by "official marketplace?" If you mean goods and services that aren't illegal then Bitcoin already has the ability to operate in that marketplace. People just choose not to use it in that way because they perceive it as an appreciating asset.
A recognised exchange would only facilitate the buying and selling of Bitcoin, it would do nothing to incentivise people to use it to buy goods and services.
Condi said:
DonkeyApple said:
So, you’re in complete agreement. You could also argue that it is the same as it has always been and that they are not genericially different from any human that has ever existed. Ie laziness + greed = scammed.
So what if one generation is not as wealthy as another? Is that a genuine reason to be ignorant or greedy? That’s an insane perspective.
You mention the financial markets screwing them over for ten years? How? With cheap debt? That’s also a bafflingly illogical excuse.
Having lived through the credit crunch and seen the risks and dangers you would expect the group to be wiser and more savvy as a result. With the endless access to free information and learning you would expect the group to be so much wiser.
The fact that you open with blaming the financial system shows the huge lack of comprehension of the basics and is a strange outlook.
But your post doesn’t counter my point just suggests a theory as to why it might be correct.
We will all watch the crypto market evolve and for V2.0 to be born but what we know is that most participants will have lost money and that everyone will talk about the few who made lots. It’s absolutely no different from every market that has gone before but the financial niaivity combined with social media access of the consumer means it is going to be bigger than any that has gone before
I think we may be coming at this from different ways... So what if one generation is not as wealthy as another? Is that a genuine reason to be ignorant or greedy? That’s an insane perspective.
You mention the financial markets screwing them over for ten years? How? With cheap debt? That’s also a bafflingly illogical excuse.
Having lived through the credit crunch and seen the risks and dangers you would expect the group to be wiser and more savvy as a result. With the endless access to free information and learning you would expect the group to be so much wiser.
The fact that you open with blaming the financial system shows the huge lack of comprehension of the basics and is a strange outlook.
But your post doesn’t counter my point just suggests a theory as to why it might be correct.
We will all watch the crypto market evolve and for V2.0 to be born but what we know is that most participants will have lost money and that everyone will talk about the few who made lots. It’s absolutely no different from every market that has gone before but the financial niaivity combined with social media access of the consumer means it is going to be bigger than any that has gone before
The fact this generation is poorer than their parents matters hugely, because it doesnt give them an incentive to work harder if the odds and policies are stacked against them. The current government, under the guise of austerity has hammered the young and the working class while at the same time protecting high earners and pensioners. The triple lock pension system has cost the country billions while at the same time graduates are leaving uni with 50k of debt and families living in council houses are having some of their benefits removed. You may not see this as an issue (I dare say you're middle age or older and probably comfortably well off), but to the youth it does matter. Its about how they see the world and the psychology of what they perceive as a system rigged against them, which builds frustration.
The financial system has screwed them over - they see the crash in 2008 as being created by rich bankers, who then got bailed out by the government, while their public services have been cut right back, jobs were lost, and smaller local business went bust. Then for the following 10 years there have been 0 returns on savings, so no incentive to save. Anyone under the age of 30 has only every seen low interest rates and cheap debt in their adult lives. You may say its an illogical excuse, but its not at all. You're simply not looking at the bigger picture.
Huge amounts of information, as the world is waking up to, is more harmful than helpful because it is human nature to believe what you want and read what you already believe in. You can find both sides to any argument on the internet, and so to assume people are going to seek out the truth, or what is advertised as the truth, while ignoring everything else is either naive or ignorant.
What it comes down to is greed. Greed in a world which (seemingly) offers quick riches, while at the same time the 'real world' is ever more stacked against young working class people doing well. It is hardly surprising they turn to the 'get rick quick' scams.
But dont take my word for it, it has been well documented that social mobility has decreased, that this generation will be poorer than their parents, that houses as a proportion of earning is higher than ever, and that the wealth gap between the older and younger generations is increasing. If you put yourself in the shoes of an 18 year old living on a council estate with £500 in his pocket, wouldnt you take the chance to try and earn some quick money as a way of getting out your situation and experiencing things they would never hope to do otherwise?
The naivety is among those who are not in that section but are earning average or above incomes for their age, come from private houses and traditionally would have been viewed as lower middle class. It’s this section that has zero financial understanding and has taken to living like the kid on the estate as if they have no hope and a huge benefits mechanism behind them.
Social mobility hasn’t broken down for them. The opportunities are huge but a vast number have chosen the traditional female lifestyle of not grafting for those opportunities but investing their time in shopping with third party money.
This financial niaivity and massive cultural shift to a feminine lifestyle hasn’t been caused by envy that one generation that is an enormous statistical blip is wealthier than any of the others.
This isn’t a function of house prices. House prices in much of rhebUK are hugely affordable. It’s about a cultural change in fiscal responsibilities triggered by weak parenting and excess money and pure unfettered greed.
It’s willing, self empoverishment by huge swathes who haven’t realised that they are the modern middle classes and still live a working class lifestyle of feckless spending and blaming others. But the opportunities for that generation are absolutely immense and diverse. It’s amazing to see all the new means to earn an income due to modern technology and it’s a great time to be in your twenties because it’s is the first time in history that geography hasn’t limited a kids prospects and nor has what school you went to.
The millennial generation have more opportunity than any generation that has gone before and those that are taking them are making more money than any generation that has gone before. They are not restricted by the name of the their school and they are not restricted by the location of their home town. The way that they speak does not stand in their way or the way they behave or think. They have total freedom and more opportunity than anyone has ever had.
And yet there so many of them are, b
hing about how old people can go shopping more than them and how they can’t afford to buy the same type of big house that old people have and pissing all their money and opportunity away. The millenials are creating a new upper class among themselves and the majority are hurling themselves willingly into serfdom. The biggest generational change we are likely to see is the demise of the middle class as they create a greater and greater economic gulf between those of them that seize the tremendous opportunities that are laid out in front of them and the army of serfs who look at those opportunities and chose to blame their parents or grandparents for them not being arsed to reach out and take them.
Gecko1978 said:
Anyone watching Billions series 3 will have seen Axe give mcphee $1m in crypto on a memory stick....and there it is right there money transfering with no checks. Sure there is risk of crime (as with cash now) but ar the same time it highlights the beauty of a system outside of banks or goverment control...trully have control of your wealth...of course volatility in the price makes that an issue but say prices stabilise then what.....
It's a TV show. How do you think he buys crypto as well as probably cost him 10% at least in fees. It would be easier to give him cashand cheapet but doesn't fit in with current trends.The more I like at cryptos the more I think it is trying to solve a problem that doesn't exist outside of drug dealers, scammers and pedos. The world is already moving to a digital currency but this one is backed up by banks and payments made in seconds already happening. We don't have to wait 5 years for the lightening network.
DonkeyApple said:
The 18 year old living on a council estate with £500 in his pocket has always pissed that away. It’s the very nature of that type of person. Without sufficient parental guidance or being one of the rare self drivers that is what that life is. And it doesn’t matter as work, not work, spend or save life is a constant within pretty visual W and definable bounds. That’s nothing new. That is how it always has been and always will be because it’s human nature.
The naivety is among those who are not in that section but are earning average or above incomes for their age, come from private houses and traditionally would have been viewed as lower middle class. It’s this section that has zero financial understanding and has taken to living like the kid on the estate as if they have no hope and a huge benefits mechanism behind them.
Social mobility hasn’t broken down for them. The opportunities are huge but a vast number have chosen the traditional female lifestyle of not grafting for those opportunities but investing their time in shopping with third party money.
This financial niaivity and massive cultural shift to a feminine lifestyle hasn’t been caused by envy that one generation that is an enormous statistical blip is wealthier than any of the others.
This isn’t a function of house prices. House prices in much of rhebUK are hugely affordable. It’s about a cultural change in fiscal responsibilities triggered by weak parenting and excess money and pure unfettered greed.
It’s willing, self empoverishment by huge swathes who haven’t realised that they are the modern middle classes and still live a working class lifestyle of feckless spending and blaming others. But the opportunities for that generation are absolutely immense and diverse. It’s amazing to see all the new means to earn an income due to modern technology and it’s a great time to be in your twenties because it’s is the first time in history that geography hasn’t limited a kids prospects and nor has what school you went to.
The millennial generation have more opportunity than any generation that has gone before and those that are taking them are making more money than any generation that has gone before. They are not restricted by the name of the their school and they are not restricted by the location of their home town. The way that they speak does not stand in their way or the way they behave or think. They have total freedom and more opportunity than anyone has ever had.
And yet there so many of them are, bhing about how old people can go shopping more than them and how they can’t afford to buy the same type of big house that old people have and pissing all their money and opportunity away.
The millenials are creating a new upper class among themselves and the majority are hurling themselves willingly into serfdom. The biggest generational change we are likely to see is the demise of the middle class as they create a greater and greater economic gulf between those of them that seize the tremendous opportunities that are laid out in front of them and the army of serfs who look at those opportunities and chose to blame their parents or grandparents for them not being arsed to reach out and take them.
We will agree to disagree then. The naivety is among those who are not in that section but are earning average or above incomes for their age, come from private houses and traditionally would have been viewed as lower middle class. It’s this section that has zero financial understanding and has taken to living like the kid on the estate as if they have no hope and a huge benefits mechanism behind them.
Social mobility hasn’t broken down for them. The opportunities are huge but a vast number have chosen the traditional female lifestyle of not grafting for those opportunities but investing their time in shopping with third party money.
This financial niaivity and massive cultural shift to a feminine lifestyle hasn’t been caused by envy that one generation that is an enormous statistical blip is wealthier than any of the others.
This isn’t a function of house prices. House prices in much of rhebUK are hugely affordable. It’s about a cultural change in fiscal responsibilities triggered by weak parenting and excess money and pure unfettered greed.
It’s willing, self empoverishment by huge swathes who haven’t realised that they are the modern middle classes and still live a working class lifestyle of feckless spending and blaming others. But the opportunities for that generation are absolutely immense and diverse. It’s amazing to see all the new means to earn an income due to modern technology and it’s a great time to be in your twenties because it’s is the first time in history that geography hasn’t limited a kids prospects and nor has what school you went to.
The millennial generation have more opportunity than any generation that has gone before and those that are taking them are making more money than any generation that has gone before. They are not restricted by the name of the their school and they are not restricted by the location of their home town. The way that they speak does not stand in their way or the way they behave or think. They have total freedom and more opportunity than anyone has ever had.
And yet there so many of them are, b
hing about how old people can go shopping more than them and how they can’t afford to buy the same type of big house that old people have and pissing all their money and opportunity away. The millenials are creating a new upper class among themselves and the majority are hurling themselves willingly into serfdom. The biggest generational change we are likely to see is the demise of the middle class as they create a greater and greater economic gulf between those of them that seize the tremendous opportunities that are laid out in front of them and the army of serfs who look at those opportunities and chose to blame their parents or grandparents for them not being arsed to reach out and take them.
All I would say is that some of your comments are factually wrong;
'The millennial generation has more opportunity...' - Social mobility has gone backwards in the last 10 years, suggesting that they dont have as much opportunity as you think.
'House prices in much of the UK are hugely affordable; - House price to earnings ratio is the highest its ever been, so your statement cannot be correct. And dont mention how high deposits need to be or how high rents are.
To be honest the whole tone of your post is condescending and while it may be very easy to sit with your well off lifestyle and tell people in their 20's and early 30's how they should do things, the reality for many is considerably harder than you make out. Empathy is a useful quality in life, you should try it.
But lets not derail this thread.
DonkeyApple said:
a cultural change in fiscal responsibilities triggered by weak parenting and excess money and pure unfettered greed.
I'm not sure you can entirely fault weak parenting. A debt / easy credit based society has been gradually building over generations at a structural level. At its most fundamental, this is what Bitcoin seeks to address by promoting a sound money that encourages low time preference behaviours ( https://en.m.wikipedia.org/wiki/Time_preference ) . I'd highly recommend https://www.amazon.co.uk/Bitcoin-Standard-Decentra... for a deep dive into that concept & Bitcoin macroeconomics in general.DonkeyApple said:
The biggest generational change we are likely to see is the demise of the middle class as they create a greater and greater economic gulf between those of them that seize the tremendous opportunities that are laid out in front of them and the army of serfs who look at those opportunities and chose to blame their parents or grandparents for them not being arsed to reach out and take them.
The major factor facing vast swathes of the middle classes is job losses due to computerisation. Everyone from office clerks & their management heirarchies down to truck drivers are on notice. It's the equivalent of the industrial revolution and is already having a profound impact. By the next generation or two, it'll become a volatile political touch paper. https://www.wired.com/2017/03/hate-break-steve-mnu...Gassing Station | Finance | Top of Page | What's New | My Stuff