Crypto Currency Thread (Vol.2)
Discussion
Scootersp said:
Over all that time, various forms of money have existed with which people could trade, something was agreed to have wealth and these changed over time, and while essential to have at every stage I don't think we can say they were ever pivotal in a specific advancement?
Humans have always gravitated towards a money that they deem the most exchangeable. Doesn't really matter if it's been 2ton stone wheels, shells, glass beads, silver or gold. As long as the participants agree on the trade, using the medium in question, and agree on the outcome, the actual 'money' is almost irrelevant. But what we have seen through repeated through history is that every time the money system becomes debased it corrupts and breaks the trust system. Scootersp said:
The technology in and usefulness of the mining rigs is arguably more of an advancement than Bitcoin itself? I mean it's allowed it's creation? That feels like it might be a controversial thing to say here, but it shouldn't be as far as all our lives go at present?
Do you mean the physical hardware or the utilisation of the hardware to participate in the network?The hardware itself is nothing special. It's just an ASIC. The usual advances in efficiency will continue onwards as more companies invest in developing bitcoin ASICs. But the interesting part is the people utilising the second order effects of the heat generation to increase that efficiency or find complementary income streams
- Bitcoin ASICs being used in Holland to heat flower growing greenhouses
- Drying wood for sale
- Heating warehouses
- Indoor domestic heating appliances
Scootersp said:
It's being hailed as some sort of answer to money/wealth, when really wealth is in real things? with rarity/usefulness/volume as factors in how much this may be.
No, the question has always been how to you retain your wealth over a period of time. The fruits of your labor transmitted over an extended timeframe with no entropy. You can't trust fiat to maintain that if you hold it because of inflation. So people revert to Gold, real estate, land, art, etc. But all have entropy. The benifit of Bitcoin is the ability to store that wealth, forever, with zero entropy and zero upkeep (in theory).Scootersp said:
For all the nonphysical/technical advantages of Bitcoin over say Gold, Gold was the old fashioned backing and that was cast aside for the same reasons above ie at certain times it was restrictive for governments, so they left it behind to allow themselves to control (corrupt) things, why would they voluntarily bring this sort of restriction back in?
The Creature from Jekyll Island - please read this. https://www.amazon.co.uk/Creature-Jekyll-Island-Fe...
Three Days at Camp David: How a Secret Meeting in 1971 Transformed the Global Economy - and then this
https://www.amazon.co.uk/Three-Days-Camp-David-Tra...
First paragraph I don't disagree with any of that. It sort of links in with the last paragraph where the powerful broke away from the generally incorruptable Gold backing, so the bitcoin idea is not a lot different from other attempts at honest systems.
Re the hardware, what I'm getting at are the multiple machines we use from the start of computing to today and the coding/cryptography on them that made a thing like Bitcoin viable. Our whole society depends on this tech now, we communicate on here, we can only make, own, transfer, Bitcoin because of it, computing hardward and software is so useful for us, as yet Bitcoin is not, it's more an idea, almost a belief system that needs to gain traction, it's not in of itself a useful thing? especially compared to say just an iphone? It's still embryonic as potential money or storage of wealth? If hypothetically bitcoiners now are all hodlers but again hypothetically no else buys in, then the new bitcoin produced will just devalue Bitcoin like fiat? in fact the costs of producing bitcoin must be very high now, but then as I understand it the production rate is adjusted for this I beleive and so the cost of producing a bitcoin is not fixed or always increasing but could in fact be decreasing
You say 'no' but Bitcoin just doing CPI isn't what the maxi's say, "it can do so much more if people just effectively compete for it", limited supply high demand equals price rise, you too can be rich like the very early adopters? But wealth preservation should be more dull shouldn't it, it shouldn't make you rich but it shouldn't punish you for deferring spending?
The other forms of wealth preservation seem to be better, or at least fit the more widely held view of wealth preservation, bitcoins allure being that it'll appreciate and with no holding/running costs if that's why you are bringing entropy into it? The other items either have some other uses/pleasure/worth or have a history of retaining wealth, Bitcoin is not pretty to look at, you can't store a horse or grow food on it etc, you can't live in it or rent it out, it gives very little beyond promising (and for many the jury is still well and truely out on this) to be a good secure place to store wealth.
Re the hardware, what I'm getting at are the multiple machines we use from the start of computing to today and the coding/cryptography on them that made a thing like Bitcoin viable. Our whole society depends on this tech now, we communicate on here, we can only make, own, transfer, Bitcoin because of it, computing hardward and software is so useful for us, as yet Bitcoin is not, it's more an idea, almost a belief system that needs to gain traction, it's not in of itself a useful thing? especially compared to say just an iphone? It's still embryonic as potential money or storage of wealth? If hypothetically bitcoiners now are all hodlers but again hypothetically no else buys in, then the new bitcoin produced will just devalue Bitcoin like fiat? in fact the costs of producing bitcoin must be very high now, but then as I understand it the production rate is adjusted for this I beleive and so the cost of producing a bitcoin is not fixed or always increasing but could in fact be decreasing
You say 'no' but Bitcoin just doing CPI isn't what the maxi's say, "it can do so much more if people just effectively compete for it", limited supply high demand equals price rise, you too can be rich like the very early adopters? But wealth preservation should be more dull shouldn't it, it shouldn't make you rich but it shouldn't punish you for deferring spending?
The other forms of wealth preservation seem to be better, or at least fit the more widely held view of wealth preservation, bitcoins allure being that it'll appreciate and with no holding/running costs if that's why you are bringing entropy into it? The other items either have some other uses/pleasure/worth or have a history of retaining wealth, Bitcoin is not pretty to look at, you can't store a horse or grow food on it etc, you can't live in it or rent it out, it gives very little beyond promising (and for many the jury is still well and truely out on this) to be a good secure place to store wealth.
Scootersp said:
First paragraph I don't disagree with any of that. It sort of links in with the last paragraph where the powerful broke away from the generally incorruptable Gold backing, so the bitcoin idea is not a lot different from other attempts at honest systems.
Agreed. But I think in the modern digital age it has the best chance of surviving (and winning) as an alternative / secondary global currency. Satoshi managed to solve several problems in one that had previously been attempted with various other e-currencies and digital money systems. He solved the double spend issue, he solved the The Byzantine Generals Problem. It is beautiful in its simplicity and that's why it works. It's the result of 40 years of development and multiple failed attempts by the cypherpunks to create an alternative money. 
The problem with gold backed currencies is that every time they back a currency with something, they always end up printing more paper money than there is gold to back it. Ends up inflationary and creating cheap easy money which leads to misallocated capital and the boom bust cycle. (see early US history with private banks / railway boom busts etc). This applies similarly to 'backed' digital currencies (stable coins, Gold BTC etc) they all require trust.
Even gold backed currencies failed because they require trust. You can't put bananas on a blockchain (https://twitter.com/dergigi/status/1425202176654290949) Trust that the banks actually have the gold to back it, trust that no one robs the bank, trust that it's actually gold (and not gold wrapped lead). All of these things require trust and have an involved cost. Bitcoin doesn't. There's no counter party risk and no ongoing maintenance fees.
"I don't believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can't take them violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can't stop."
Friedrich A. Hayek in 1984 interview.
Scootersp said:
as yet Bitcoin is not, it's more an idea, almost a belief system that needs to gain traction, it's not in of itself a useful thing?
Currently it's the most powerful computer network on earth. Double the computing power of all the supercomputers currently in use. It is an incredibly useful system that anyone ca access with a mobile phone and audit with $100 worth of hardware. I can't think of anything more valuable and essential at this moment for a lot of people. Scootersp said:
It's still embryonic as potential money or storage of wealth? If hypothetically bitcoiners now are all hodlers but again hypothetically no else buys in, then the new bitcoin produced will just devalue Bitcoin like fiat? in fact the costs of producing bitcoin must be very high now, but then as I understand it the production rate is adjusted for this I beleive and so the cost of producing a bitcoin is not fixed or always increasing but could in fact be decreasing
The difficulty adjustment increases or decreases the chance of 'guessing' the block based on the hash rate of the network. As more miners join (hash rate up) the difficulty increases in order to maintain the ±10 minute block time. If miners leave the network (as happened when China "banned" mining the difficulty dropped off a cliff. The miners compete with their hash power and depending on their energy costs and their hash rate they are either profitable or not. This is why Bitcoin miners are incentivised to find the cheapest source of energy and this trends towards being stranded energy sources (old gas wells / off grid hydro / solar etc) or in the case of places like Texas they are used as load balancers with excess energy produced by the renewables portion of the grid. "The price of any commodity tends to gravitate toward the production cost. If the price is below cost, then production slows down. If the price is above cost, profit can be made by generating and selling more. At the same time, the increased production would increase the difficulty, pushing the cost of generating towards the price."
Satoshi.
Scootersp said:
You say 'no' but Bitcoin just doing CPI isn't what the maxi's say, "it can do so much more if people just effectively compete for it", limited supply high demand equals price rise, you too can be rich like the very early adopters? But wealth preservation should be more dull shouldn't it, it shouldn't make you rich but it shouldn't punish you for deferring spending?
It's still very early, it is in the process of being monetised, rather than being money already. Although there is huge adoption in Africa and South America and Asia. We don't see it here because we don't 'need' it. As an asset it is volatile because we are measuring it against currencies with a huge volume of liquidity and relative stability. But the person in Lebanon who stored even some of their fiat money in bitcoin then they managed to retain most of their purchasing power as the LBP was recently devalued by their central bank by 90%. An extreme example but a real world example of Bitcoin doing what it does best. A global arbitrage opportunity on the failure of central bank fiat currencies. 
Scootersp said:
The other forms of wealth preservation seem to be better, or at least fit the more widely held view of wealth preservation, bitcoins allure being that it'll appreciate and with no holding/running costs if that's why you are bringing entropy into it? The other items either have some other uses/pleasure/worth or have a history of retaining wealth, Bitcoin is not pretty to look at, you can't store a horse or grow food on it etc, you can't live in it or rent it out, it gives very little beyond promising (and for many the jury is still well and truely out on this) to be a good secure place to store wealth.
You can't do any of those things with a piece of paper printed by the Government either? Yet it is money, even if it is by decree rather than choice. Every asset that is used as a store of value today trades on a potential future price. No one feels guilty buying a house and selling it 10 years later for a profit, no one feels guilty buying art, or a rare car and selling it later for a marked up price. These are monetised assets trading on a future expected price. In 2010 Satoshi posted on the forum:
"As a thought experiment, imagine there was a base metal as scarce as gold but with the following properties:
- boring grey in colour
- not a good conductor of electricity
- not particularly strong, but not ductile or easily malleable either
- not useful for any practical or ornamental purpose
and one special, magical property:
- can be transported over a communications channel"
I get it I'm no fiat fan! As the history books show it's longevity is enough for generations but always ends eventually.
I think the electronic aspect appeals or finds acceptance a lot easier with some than others (could be an age thing). The creation of Bitcoin might be an amazing piece of work but it is a human creation (so immediately triggers my cynical receptors!) Satoshi the mystical 'creator' is like the gandhi of crypto? possible I spose that someone wanted to create such a thing and take no credit?
If it really is a flawless, inpenetrable, uncorruptable ledger then that's a huge feat of "not sure what to specifically call it" engineering?
It's a fascinating topic wealth and worth, going off on a tangent here but our number plate system here is a wealth storage tool in a way, with some great but many tenuous (but still expensive) combinations. I beleive in the states you can select for a modest sum any combination you want as long as someone else doesn't have it?
If we change our rules to theirs you have people who become poorer over night? wealth is destroyed? The way things are going we can't be far from cars having a name like a computer does, and so no need for a visible plate?
I spose my point is most (all?) human creations are superseeded at some point and their worth extrapolates towards zero but the basic elements/resources that go into making these things are finite and cannot?
I think the electronic aspect appeals or finds acceptance a lot easier with some than others (could be an age thing). The creation of Bitcoin might be an amazing piece of work but it is a human creation (so immediately triggers my cynical receptors!) Satoshi the mystical 'creator' is like the gandhi of crypto? possible I spose that someone wanted to create such a thing and take no credit?
If it really is a flawless, inpenetrable, uncorruptable ledger then that's a huge feat of "not sure what to specifically call it" engineering?
It's a fascinating topic wealth and worth, going off on a tangent here but our number plate system here is a wealth storage tool in a way, with some great but many tenuous (but still expensive) combinations. I beleive in the states you can select for a modest sum any combination you want as long as someone else doesn't have it?
If we change our rules to theirs you have people who become poorer over night? wealth is destroyed? The way things are going we can't be far from cars having a name like a computer does, and so no need for a visible plate?
I spose my point is most (all?) human creations are superseeded at some point and their worth extrapolates towards zero but the basic elements/resources that go into making these things are finite and cannot?
Scootersp said:
I get it I'm no fiat fan! As the history books show it's longevity is enough for generations but always ends eventually.
I think the electronic aspect appeals or finds acceptance a lot easier with some than others (could be an age thing). The creation of Bitcoin might be an amazing piece of work but it is a human creation (so immediately triggers my cynical receptors!) Satoshi the mystical 'creator' is like the gandhi of crypto? possible I spose that someone wanted to create such a thing and take no credit?
I guess we all have a tough time believing anyone is truly altruistic with no ulterior motivations. Which is a bit sad to be honest. I think the electronic aspect appeals or finds acceptance a lot easier with some than others (could be an age thing). The creation of Bitcoin might be an amazing piece of work but it is a human creation (so immediately triggers my cynical receptors!) Satoshi the mystical 'creator' is like the gandhi of crypto? possible I spose that someone wanted to create such a thing and take no credit?
If you wanted to say that Satoshi wasn't altruistic and at some point in the future he pops up, says 'hey! I'm Satoshi and I'm going to sell the Bitcoin in my wallets that haven't been touched since I mined the coins".
Ok,... he/she's Satoshi and they sold their Bitcoin. Now what? Well, nothing really. Ok the mystery might be gone, but it changes nothing about the working of the system as it stands. Owning Bitcoin doesn't give you leverage over the network (unlike PoS).
Scootersp said:
If it really is a flawless, impenetrable, incorruptible ledger then that's a huge feat of "not sure what to specifically call it" engineering?
Yes, it's a money engineered from first principles. Scootersp said:
It's a fascinating topic wealth and worth, going off on a tangent here but our number plate system here is a wealth storage tool in a way, with some great but many tenuous (but still expensive) combinations. I beleive in the states you can select for a modest sum any combination you want as long as someone else doesn't have it?
If we change our rules to theirs you have people who become poorer over night? wealth is destroyed? The way things are going we can't be far from cars having a name like a computer does, and so no need for a visible plate?
I spose my point is most (all?) human creations are superseeded at some point and their worth extrapolates towards zero but the basic elements/resources that go into making these things are finite and cannot?
Value is just what people are willing to pay for any item offered for trade at that current time. Nothing more nothing less. If we change our rules to theirs you have people who become poorer over night? wealth is destroyed? The way things are going we can't be far from cars having a name like a computer does, and so no need for a visible plate?
I spose my point is most (all?) human creations are superseeded at some point and their worth extrapolates towards zero but the basic elements/resources that go into making these things are finite and cannot?
Wealth destruction through a change of rules is exactly what Bitcoin is set out to do. Not that it hasn't changed throughout all the upgrades and revisions, but the core tenet of limited supply and issuance schedule is unlikely to be changed any time soon. The miners and node runners are incentivised to maintain that limit because why would you voluntarily want to devalue something you own?
There's been 50+ attempts to create Bitcoin 2.0 and they're all trending to zero against BTC itself. If you want to meme it into being, then you could say that you can only really create digital scarcity once. If someone builds a Ferrari replica with modern running gear, it's never going to be worth as much as the original Ferrari build in Modena.
A million dollars is about 50 bitcoin right now. If you wouldn't take the bitcoin I think you are in the wrong thread 
I've split things out a bit over the past few years and reduced my cash holdings massively and I still feel more comfortable overall with bitcoin than with money in the bank.
I've split things out a bit over the past few years and reduced my cash holdings massively and I still feel more comfortable overall with bitcoin than with money in the bank.
dimots said:
A million dollars is about 50 bitcoin right now. If you wouldn't take the bitcoin I think you are in the wrong thread
I've split things out a bit over the past few years and reduced my cash holdings massively and I still feel more comfortable overall with bitcoin than with money in the bank.
$m can be spent pretty much anywhere on anything. Can the same be said for Bitcoin?I've split things out a bit over the past few years and reduced my cash holdings massively and I still feel more comfortable overall with bitcoin than with money in the bank.
Al Gorithum said:
$m can be spent pretty much anywhere on anything. Can the same be said for Bitcoin?
erm not quite.. that $M would need to be exchanged into English Currency first which would then cut it down to £826k then minus the fees incurred doing so. Edited by WY86 on Friday 10th March 15:47
WY86 said:
Al Gorithum said:
$m can be spent pretty much anywhere on anything. Can the same be said for Bitcoin?
erm not quite.. that $M would need to be exchanged into English Currency first which would then cut it down to £826k then minus the fees incurred doing so. Edited by WY86 on Friday 10th March 15:47
Al Gorithum said:
So what? That's what make the USD so versatile. It can still be spent pretty much anywhere and on anything. Can the same be said for Bitcoin?
well its not though is it... currencies have boarders you could have a $1000 dollars in your pocket in cash in the UK and not be able to spend it. Bitcoin will never be a currency but to say USD is so versatile isn't true either. WY86 said:
Al Gorithum said:
So what? That's what make the USD so versatile. It can still be spent pretty much anywhere and on anything. Can the same be said for Bitcoin?
well its not though is it... currencies have boarders you could have a $1000 dollars in your pocket in cash in the UK and not be able to spend it. Bitcoin will never be a currency but to say USD is so versatile isn't true either. So yes, the USD is much more versatile than Bitcoin and probably any other currency, and can be spent on things such as filling my belly, making me happy, buying investments etc.
Edited by Al Gorithum on Friday 10th March 17:01
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