# Why is Bitcoin  "digital gold" crashing right now?



## Brendan Burgess

landlord said:


> I also have a significant crypto holding (digital gold) as I do not know which will prevail in the event of geopolitical/financial meltdown.





tecate said:


> I don't follow gold either but to my knowledge, gold has had a major peak to trough in recent years, yes. Other than that, see the links to video snippets from an investment banker and asset fund manager (neither with past form or interest shown in BTC) both suggesting that BTC is a legitimate consideration in hedging against the current trade war (on the other thread in this sub-forum).



Why is Bitcoin (digital gold) crashing right now?

I thought that Bitcoin was supposed to thrive during times of economic stress?

Brendan


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## odyssey06

Theorising... lot of smaller investors cashing out because they need the money (either because of reduced earnings from coronavirus disruption or expected reductons)


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## EmmDee

odyssey06 said:


> Theorising... lot of smaller investors cashing out because they need the money (either because of reduced earnings from coronavirus disruption or expected reductons)



Probably - the problem with a virtual currency is that when hard cash is needed, virtual currency has less utility


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## tecate

Bitcoin has shown signs in the past of being uncorrelated to the conventional markets.  We're now seeing Bitcoin being very much correlated to the traditional markets in panic conditions.  However, lets see how this plays out over the time ahead.  It may be that Bitcoin goes back to being counter cyclical as central banks look to churn out even more FIAT money - something they've already started to do.

Bear in mind also that whilst investors have flocked to gold, in the 2008 financial crisis, gold dropped around 30% before later recovering.

Edit - gold itself is down a few % over the past 24 hours.


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## JSnowWinterfell

Brendan Burgess said:


> I thought that Bitcoin was supposed to thrive during times of economic stress?
> 
> Brendan



I have heard this statement but not seen proof? 

The decrease looks to have happened over a short space of time, maybe a flash crash? Could it be that a large holder sold and triggered the algorithms to sell? I have read articles about that type of manipulation before.


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## tecate

JSnowWinterfell said:


> I have heard this statement but not seen proof?


You can go back through the charts for bitcoin vs. conventional markets over the course of the last decade and for the most part they will prove that it's uncorrelated.  However, bitcoin emerged as a response to the 2008 financial crisis.  There hasn't been one since.  Therefore, these events in recent days are new territory for bitcoin.  Right now, it is acting in correlation with the conventional market.  Lets see how it unfolds though.  Gold has not risen...its down a few percent today.



JSnowWinterfell said:


> The decrease looks to have happened over a short space of time, maybe a flash crash? Could it be that a large holder sold and triggered the algorithms to sell? I have read articles about that type of manipulation before.


It could be that large traders had to pull money out of BTC to pay for margin call loses on the conventional markets.  As regards manipulation, any market with a relatively small market cap is vulnerable to manipulation.  That will only change as the market cap of Bitcoin expands.


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## cremeegg

Its not just bitcoin. Traditional gold is not showing the major gains that might be expected in times of uncertainty. Maybe its bluff is being called after 10,000 years.


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## Brendan Burgess

cremeegg said:


> Maybe its bluff is being called after 10,000 years.



That is brilliant. I wonder will my descendants in 3020 be saying "Bitcoin is a bag of hot air." 

Brendan


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## tecate

cremeegg said:


> Its not just bitcoin. Traditional gold is not showing the major gains that might be expected in times of uncertainty. Maybe its bluff is being called after 10,000 years.


Ok, I'll bite.  Are you saying then that gold didn't drop 30% at the onset of the last financial crisis?

Brendan asked why BTC hasn't responded as a safe harbour.  I think it's pretty reasonable that we look at the performance of an established safe haven when examining that. It wasn't suggested that gold is not an established store of value (as well you knew).

Who's to say that asset managers didn't pull BTC to cover losses in the conventional markets, to prevent margin calls and leveraged positions?


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## tecate

Brendan Burgess said:


> That is brilliant. I wonder will my descendants in 3020 be saying "Bitcoin is a bag of hot air."
> 
> Brendan


It seems that you think they will Brendan.  I've asked you many times to call the date bitcoin will die.  Wouldn't right now - with BTC having taken a massive dive - be the perfect opportunity for you to call it?


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## Leo

tecate said:


> Wouldn't right now - with BTC having taken a massive dive - be the perfect opportunity for you to call it?



You're asking him to predict the irrational!


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## tecate

Leo said:


> You're asking him to predict the irrational!


Sounds like a cop out to me.  You speak of the irrational..maybe that's the commitment the Fed made to magic up and pump $1.5 trillion into the system and expect that will be a fix and there won't be a day of reckoning....just seeing as you speak to the irrational , something tangible to work with.


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## Brendan Burgess

Hi tecate

I thought I had answered this many times before. 

I can't. 

I know it will go to zero but I can't tell the path or the timing. 

I admit that I am surprised it has lasted this long. 

Brendan


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## tecate

Brendan Burgess said:
			
		

> I can't.
> I know it will go to zero but I can't tell the path or the timing.
> I admit that I am surprised it has lasted this long.
> Brendan


Well I guess we are not talking about a bubble needing to burst then.  We've moved beyond that at least.

It looks like things are going to be in the toilet for quite some time so let's see how this all pans out.  This isn't just about the Corona Virus.  It's also about the problems with the conventional system and markets.  Bitcoin wasn't up and running for the last one.  Let's see how this all unfolds.


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## Brendan Burgess

tecate said:


> a bubble needing to burst then



OK, so it's a bubble which will slowly deflate but from time to time, it will inflate a bit again. 

Brendan


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## tecate

Brendan Burgess said:


> OK, so it's a bubble which will slowly deflate but from time to time, it will inflate a bit again.


Has there been or is there anything that acts in a similar manner?


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## Brendan Burgess

Wow! It fell below $4,000 overnight and rebounded quickly.






I set my stop at $3,000 ages ago.  And subsequently regretted being too rigid when it fell to $3,300 and I didn't close out. 



Brendan


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## Duke of Marmalade

tecate said:


> Has there been or is there anything that acts in a similar manner?


I haven't examined the over 7,000 copycat cryptos, but I presume there is a lot of like behaviour there.


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## tecate

Brendan Burgess said:


> Wow! It fell below $4,000 overnight and rebounded quickly.


Indeed it did and recovered in minutes. 

“Traders are pulling money out of Bitcoin to fund their margin calls on other asset classes" - Ross Middleton, CFO @ DeversiFi via Bloomberg.

The Central Bank printing presses are at full tilt now.  Lets see what happens when a wave of inflation follows.


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## tecate

Duke of Marmalade said:


> I haven't examined the over 7,000 copycat cryptos, but I presume there is a lot of like behaviour there.


Ok, so you provide crypto generally as an example.  Wonderful your Dukeness.  Any other such ongoing inflating and deflating bubble besides crypto?

As an aside this gem from Edward Snowden:  _“This is the first time in a while I’ve felt like buying bitcoin. That drop was too much panic and too little reason.” _


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## Firefly

It has been stated here that one can buy from millions of items on Amazon with Bitcoin. 
Given that so many people are working from home, with plenty time on their hands, would it be too much to expect that someone might use this "currency" to, you know, actually buy something?


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## tecate

Firefly said:


> Would it be too much to expect that someone might use this "currency" to, you know, actually buy something?


Not relevant in a thread that discusses a digital gold use case.  That aside, it was discussed to death in the other thread.  It boils down to your view Firefly that if bitcoin is not used as a means of exchange this very day, then it's toast.  I don't agree - but everyone can make up their own minds.


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## tecate

Taking this back to Brendan's original query, here's an interesting thesis on the subject.

Key takeaways:

- Gold was never a true safe haven asset during the 2008 financial crisis (dropping 30%).
- Safe haven assets tend to be bought up *after* a bottom has been formed.


Other than that, when there are more sellers than buyers and there's a need to raise cash, bitcoin has proven to be much easier to liquidate than stocks, bonds, real estate and gold as it trades 24/7 - 365.


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## Brendan Burgess

tecate said:


> bitcoin has proven to be much easier to liquidate than stocks, bonds, real estate and gold as it trades 24/7 - 365.



Eh, it might be easier to liquidate than real estate, but it has the same liquidity as the other items you mention. 

Sure, I can cash my Bitcoin when the market of the other is closed, but that is irrelevant. 

Brendan


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## tecate

Brendan Burgess said:


> Sure, I can cash my Bitcoin when the market of the other is closed, but that is irrelevant.


In the context of the market events over the last couple of days I wouldn't have thought it irrelevant.


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## WolfeTone

My  two Satoshi worth.

The reason why bitcoin is crashing now, and not chasing all times highs is that this stock market crash is not (yet) a consequence of financial malpractice and fraud as was the crash of 2007/8. It was out of the property loans, sub-prime mortgages, credit default swap, collateralized debt obligations gambling frenzy that resulted in the 'credit crunch' and subsequent financial collapse. 
The consequences were devastating - job losses, homelessness, bankruptcies etc. 
One other consequence of the financial collapse was the creation of bitcoin, a trustless peer to peer system to carry out financial transactions or transfers with in built scarcity. 
It is not a panacea to protect wealth against biological pandemics that threaten to destabilize world economic output. If the world were to go into economic lockdown, Wuhan style, then the value of everything is vulnerable, including bitcoin.
Where the value of bitcoin may come into its own is how governments around the world react (the magic money trees are starting to bloom), how long and how deep the economic effects of this crisis are felt, and what (if any) is the geo-political fallout of events occurring.


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## Duke of Marmalade

WolfeTone said:


> My  two Satoshi worth.
> 
> The reason why bitcoin is crashing now, and not chasing all times highs is that this stock market crash is not (yet) a consequence of financial malpractice and fraud as was the crash of 2007/8. It was out of the property loans, sub-prime mortgages, credit default swap, collateralized debt obligations gambling frenzy that resulted in the 'credit crunch' and subsequent financial collapse.
> The consequences were devastating - job losses, homelessness, bankruptcies etc.
> One other consequence of the financial collapse was the creation of bitcoin, a trustless peer to peer system to carry out financial transactions or transfers with in built scarcity.
> It is not a panacea to protect wealth against biological pandemics that threaten to destabilize world economic output. If the world were to go into economic lockdown, Wuhan style, then the value of everything is vulnerable, including bitcoin.
> Where the value of bitcoin may come into its own is how governments around the world react (the magic money trees are starting to bloom), how long and how deep the economic effects of this crisis are felt, and what (if any) is the geo-political fallout of events occurring.


That's a heroic effort _Wolfie_.  However, whilst it might explain why it is not acting as digital gold, it does not explain why it is crashing.  _tecate _has suggested some technical reasons, like folk meeting margin calls.  I am not convinced.  Could it be that Bitcoin has joined the establishment - if the Dow and FTSE are being dumped so too is Bitcoin.
It should be noted that Fiat has performed remarkably well, indeed far too well, over both this crisis and the earlier one.  A far cry form the oil crises of the seventies which saw massive inflation.


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## DazedInPontoon

Firstly, lets put this drop into perspective, there was a 6 month period about a year ago where bitcoin was well under the price its at now. It's a big drop in a short period of time, but get back to me when it's below 100 or even 1000. 

Secondly this was by all accounts a weird week. The stock market is down a lot, ok people are running to safety. Ok are they running to bitcoin? no. Are they running to gold? no, gold might have had it's biggest weekly drop in 7 years. Ok, they're obviously running to bonds then right? No, the yield on 30-year and 10-year U.S. government debt dropped to their lowest levels ever. This has been a weird week in general and I'm not sure what predictions about long term behaviour can be derived from it.

Thirdly we don't know fiat will do over the crisis as it's only beginning. I'm not a finance professional so please correct me if I'm wrong but as I understand it European banks, especially Italian and Greek are not well capitalised. Both economies (and we can throw Spain in too) are heavily dependent on tourism. Tourism is finished for foreseeable future. Interest rates are already historically low, there's no where to go. What happens next? What are the chances that the bail in laws that were passed are put in to use? What are the chances that more money printing diluting the value of fiat happens? What other possibilities are there to deal with the economic downturn that's ahead?


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## tecate

Duke of Marmalade said:


> _tecate _has suggested some technical reasons, like folk meeting margin calls.  I am not convinced.  Could it be that Bitcoin has joined the establishment - if the Dow and FTSE are being dumped so too is Bitcoin.


And what of gold and its [broken link removed] The same rationale is being given - i.e. leveraged positions have had to be covered, margin calls have had to be covered.  “There’s a lot of selling of every liquid asset for margin calls"  (Matthew Miller - Gold market and equities analyst, CFRA).



Duke of Marmalade said:


> It should be noted that Fiat has performed remarkably well, indeed far too well, over both this crisis and the earlier one.  A far cry form the oil crises of the seventies which saw massive inflation.


It should be noted that the QE experiment is ongoing and has not reached its full conclusion.  CBs can't continue to magic up money without there being a reckoning.  Lets see what the US jobs report is for March in a couple of weeks.  Interesting times ahead.


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## WolfeTone

DazedInPontoon said:


> Ok, they're obviously running to bonds then right? No, the yield on 30-year and 10-year U.S. government debt dropped to their lowest levels ever.



Doesn't this suggest that investors are running to bonds? Driving bond prices higher resulting in lower / negative yields.


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## DazedInPontoon

WolfeTone said:


> Doesn't this suggest that investors are running to bonds? Driving bond prices higher resulting in lower / negative yields.



Seems to make sense but then I read things like:

"Analysts at BofA, parsing weekly data from flow tracking specialist EPFR, reported $136.9 billion of inflows into cash - the largest ever. Investors withdrew a record $25.9 billion from bond funds in the week to Wednesday." 
from here

Hopefully someone who knows more about this can explain what's going on.

Maybe the question is whether all the people who ran to cash this week are happy to stay there in the coming year, and if not where that cash will move to.


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## WolfeTone

Duke of Marmalade said:


> Could it be that Bitcoin has joined the establishment



You mean, investors now place value on it?



Duke of Marmalade said:


> It should be noted that Fiat has performed remarkably well, indeed far too well, over both this crisis and the earlier one. A far cry form the oil crises of the seventies which saw massive inflation.



I don't really get this sentiment. Economies have 'recovered', on paper, at least. But Leprechaun economics is very much still at play. I do think its interesting to go back to peak Celtic Tiger in 2007 and compare major economic indicators with today in Ireland.
Employment figures, average industrial wage, debt to gdp ratio, inflation rate over the period etc...the obvious conundrum is back in 2007 GDP was valued at around $275bn. Today its valued at $381bn! A whopping 38% more than 2007.
Trading Economics - Ireland, GDP

What has happened, what have we done, achieved, to have an economy valued at 38% more than peak Celtic Tiger times?
In truth, this is primarily centred around rising asset and property prices. Leaving working people see the value of their wages diminish to the point that they cannot afford a home, cannot afford the rent.
This is all financial engineering at the behest of the ECB 'whatever it takes', monetary policy.
The EU and governments around the world are now moving to a 'whatever it takes' fiscal policies. The magic Fiat money trees are in season.
Bitcoin, is still 45% up year on year. Not bad in the midst of a pending economic crisis.
Time to buy some more.


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## RedOnion

DazedInPontoon said:


> Ok, they're obviously running to bonds then right? No, the yield on 30-year and 10-year U.S. government debt dropped to their lowest levels ever.


As pointed out by Wolfie, this means the exact opposite of what you think it does.



DazedInPontoon said:


> "Analysts at BofA, parsing weekly data from flow tracking specialist EPFR, reported $136.9 billion of inflows into cash - the largest ever. Investors withdrew a record $25.9 billion from bond funds in the week to Wednesday."


'bond funds' don't include just sovereign bonds. The outflows have been from risky bonds into treasuries.


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## Brendan Burgess

DazedInPontoon said:


> I'm not a finance professional so please correct me if I'm wrong






WolfeTone said:


> Doesn't this suggest that investors are running to bonds? Driving bond prices higher resulting in lower / negative yields.


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## RedOnion

DazedInPontoon said:


> I'm not a finance professional so please correct me if I'm wrong but as I understand it European banks, especially Italian and Greek are not well capitalised.


The ECB would disagree with you in this.

If you've a reputable source, post it, but it looks like something you either made up, or read in 2008.


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## DazedInPontoon

Thanks for the corrections on what happened with bonds. 

So what will happen in Italy, Greece and Spain?


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## RedOnion

DazedInPontoon said:


> So what will happen in Italy, Greece and Spain?


Who knows.

The banks publish their capital ratios on an ongoing basis, so they're very easily found. The ECB performs stress tests on them. All the results are published.

We don't need to make things up to argue a case for Bitcoin.


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## Brendan Burgess

RedOnion said:


> We don't need to make things up to argue a case for Bitcoin.



Hi Red

How else could you make a case for Bitcoin?   

Brendan


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## Duke of Marmalade

WolfeTone said:


> Employment figures, average industrial wage, debt to gdp ratio, inflation rate over the period etc...the obvious conundrum is back in 2007 GDP was valued at around $275bn. Today its valued at $381bn! A whopping 38% more than 2007.
> Trading Economics - Ireland, GDP
> 
> What has happened, what have we done, achieved, to have an economy valued at 38% more than peak Celtic Tiger times?
> In truth, this is primarily centred around rising asset and property prices. Leaving working people see the value of their wages diminish to the point that they cannot afford a home, cannot afford the rent.


Fascinating statistics.  I see that there was a spiked jump in Manufacturing GDP in 2015, I suspect that is Leprechaun economics.  On a technical point asset prices do not actually feed into GDP although I think rents might.  
This impressive growth in GDP is accompanied by a large increase in the labour force.  So whose growth is it? Is it simply down to immigration?  That has certainly something to do with the housing shortage and the strain on health services.


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## tecate

Brendan Burgess said:


> How else could you make a case for Bitcoin?


Nothing like a genuine interest in accuracy and the truth Brendan.  On that basis, I'd suggest you update the thread title to "Why are Gold and 'digital gold' crashing right now?"

A definite case has been made for bitcoin.  It brings with it several advantages over FIAT money....not least of which is the fact that someone can't summarily print off $150 billion of it on a whim.


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## JSnowWinterfell

tecate said:


> It could be that large traders had to pull money out of BTC to pay for margin call loses on the conventional markets.  As regards manipulation, any market with a relatively small market cap is vulnerable to manipulation.  That will only change as the market cap of Bitcoin expands.



That is not correct, Bitcoin has a fixed supply. Market Cap is a metric of coins * price, a higher market cap does not change the percentage ownership. If a person owns 50% of a market, they can manipulate it regardless of the market capitalisation. 

Looking at the charts, I would classify what happened on thursday as a flash crash, which happens in conventional markets. BTC has become more like conventional markets in the last two years through the creation of standard financial products (Options, Futures).


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## JSnowWinterfell

The premise of this thread is that Bitcoin is digital gold, but this is a false premise, as Bitcoin is a peer to peer electronic cash system. The only analogy to gold is the concept of mining to generate the supply. The concept of it being digital gold is a story told in an attempt at legitimacy, similar to the creation of the term Blockchain.  

I am not presenting a case for or against Bitcoin here, but the fact is the very premise of this thread is incorrect and thus Brendan should either change the title or close the thread.


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## Brendan Burgess

With respect , I think that putting digital gold in inverted commas explains it very well.

Brendan


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## Duke of Marmalade

JSnowWinterfell said:


> I am not presenting a case for or against Bitcoin here, but the fact is the very premise of this thread is incorrect and thus Brendan should either change the title or close the thread.


  I see you are new in these parts. Brendan is not in any way suggesting that bitcoin is digital gold. He has put the term in quotation marks to indicate that some bitcoin cultists have indeed made this claim. It is legitimate to put to them why it is not behaving as such now. _tecate _has made the very valid point that it is indeed behaving like gold, which raises the supplementary question "why is the nice shiny stuff tanking at the same time as the markets?"

_Boss, our posts crossed._


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## tecate

JSnowWinterfell said:


> That is not correct, Bitcoin has a fixed supply. Market Cap is a metric of coins * price, a higher market cap does not change the percentage ownership. If a person owns 50% of a market, they can manipulate it regardless of the market capitalisation.


You're misunderstanding something.  If you are a whale with access to billions and there are two markets - one has a market cap of $150 billion, the other a trillion - one of them is going to be far easier manipulate than the other. The fixed supply of bitcoin doesn't come into this particular equation.


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## JSnowWinterfell

I apologize for the confusion, but If it is not meant literally and the question is why is Bitcoin Crashing then why include?

Appears there is an intention to belittle those that want to discuss bitcoin constructively or have different opinions to the "Boss".

As a consumer forum, a topic like Bitcoin should be discussed constructively, but as a long time reader I have observed time and time again a set of people arguing their opinions over one and another time and time again.

A consumer who is interested in understanding it, or even worse suffering potential fraud is not going to be helped.

Leave the opinions at the doors lads.


*P.s There is only one "Boss" and I haven't seen Bruce post here


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## tecate

JSnowWinterfell said:


> The premise of this thread is that Bitcoin is digital gold, but this is a false premise, as Bitcoin is a peer to peer electronic cash system.


The assertion that bitcoin is in a developmental phase of becoming digital gold has not been invalidated by this week's events.  Given gold's 10% drop, it's probably the opposite.
Whilst bitcoin is peer to peer cash, that doesn't in any way mean it can't act as digital gold.  It's hard money due to a fixed supply and designed in scarcity.



JSnowWinterfell said:


> The only analogy to gold is the concept of mining to generate the supply.


The analogy with gold rests on its scarcity.


JSnowWinterfell said:


> The concept of it being digital gold is a story told in an attempt at legitimacy, similar to the creation of the term Blockchain.


What on earth do you mean by this? If you mean 'use case' rather than 'legitimacy', then yes , some are of the belief that it is taking on a digital gold use case.
What of 'blockchain' ?  It's the overarching technology.  What's wrong with the use of the term?


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## tecate

Duke of Marmalade said:


> He has put the term in quotation marks to indicate that some bitcoin cultists have indeed made this claim.


Its unbecoming of His Dukeness to resort to the 'cultist' jibe.  
Other than that, any claims to the contrary have yet to be validated (despite this week's events). 



Duke of Marmalade said:


> _tecate _has made the very valid point that it is indeed behaving like gold, which raises the supplementary question "why is the nice shiny stuff tanking at the same time as the markets?"


Why did gold tank at the onset of the financial crisis in 2008?  As the recession follows shortly, it won't be going up either.  Traders pull liquid assets to cover margin calls and market losses.  Real people pull liquid assets to carry on when they realise debts and deal with job losses, etc.  Once the market bottoms and the recession is priced in, gold and bitcoin should shoot up.  .. especially if there's a raft of QE money in play.


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## Fidgety

Duke of Marmalade said:


> why is the nice shiny stuff tanking at the same time as the markets?



In a fire sale, all asset classes get burned.


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## JSnowWinterfell

tecate said:


> What on earth do you mean by this? If you mean 'use case' rather than 'legitimacy', then yes , some are of the belief that it is taking on a digital gold use case.
> What of 'blockchain' ?  It's the overarching technology.  What's wrong with the use of the term?



Tecate, you are clearly a proponent of Bitcoin, and I am not discrediting it or trying to argue against your points. 

The importance of legitimacy has been researched by academia, for example, cash is legitimate because it has the backing of the government, the individual notes are legitimate because of the watermarks. I am allowed to drive because I passed a test and have a license issued by the government. These are classic examples of legitimacy through standards and governments. 

Technology legitimacy is the theory that new technology will become mainstream through achieving legitimacy. In this case the use of the term gold aids in making bitcoin comparable to something perceived as legitimate. Similarly, the term Blockchain is not present in the Bitcoin whitepaper. Bitcoin can have negative connotations around legality etc but using the term Blockchain allows companies selling / building blockchain solutions not to be directly linked to Bitcoin, it is a clean term.

For example, if tomorrow Amazon said they were only going to accept Bitcoin it would immediately increase bitcoins legitimacy.


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## Brendan Burgess

JSnowWinterfell said:


> if tomorrow Amazon said they were only going to accept Bitcoin it would immediately increase bitcoins legitimacy.



Agreed. But do you think that such a step might affect Amazon's legitimacy? 

Brendan


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## JSnowWinterfell

Brendan Burgess said:


> Agreed. But do you think that such a step might affect Amazon's legitimacy?
> 
> Brendan



I was using a very simple example to illustrate but that is a good question. 

I actually think they are a big enough company with enough users that they could force people to use whatever payment method they chose. Lets not divert the topic though, my example was just for the theory of legitimacy in helping technology going mainstream, not an opinion on whether amazon would allow bitcoin.


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## tecate

JSnowWinterfell said:


> Tecate, you are clearly a proponent of Bitcoin, and I am not discrediting it or trying to argue against your points.


You can discredit or argue away.  My views are not set in concrete so I actively encourage it.


JSnowWinterfell said:


> Bitcoin can have negative connotations around legality etc but using the term Blockchain allows companies selling / building blockchain solutions not to be directly linked to Bitcoin, it is a clean term.


Ah, that harks back to the tar and feathering our banking friends tried to affix to BTC with their 'Blockchain not bitcoin' mantra a couple of years back.



			
				Brendan Burgess said:
			
		

> do you think that such a step might affect Amazon's legitimacy?


I'd be keen to hear your thoughts on what - to your mind - that would say about Amazon and their 'legitimacy' were they to accept bitcoin directly, Brendan?


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## Duke of Marmalade

tecate said:


> You can discredit or argue away.  My views are not set in concrete so I actively encourage it.
> 
> Ah, that harks back to the tar and feathering our banking friends tried to affix to BTC with their 'Blockchain not bitcoin' mantra a couple of years back.
> 
> 
> I'd be keen to hear your thoughts on what - to your mind - that would say about Amazon and their 'legitimacy' were they to accept bitcoin directly, Brendan?


The original reference was to "only" accept bitcoin. They probably already accept bitcoin (or rather facilitate its exchange into fiat for the purpose of purchases).  I don't know about legitimacy but their business would immediately collapse as there would only be .000001% of the populace in a position to comply with the decree.  Would that %age go up as a result of the decree.  It might double to .000002%.


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## tecate

Duke of Marmalade said:


> The original reference was to "only" accept bitcoin.


Thanks for drawing my attention to that - had misread it.


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## Duke of Marmalade

tecate said:


> Whilst bitcoin is peer to peer cash, that doesn't in any way mean it can't act as digital gold.  It's hard money due to a fixed supply and designed in scarcity.
> The analogy with gold rests on its scarcity.


 I am sure we don't want to re-run the Great Bitcoin Debate.  But the basic law of economics is that price is a function of supply and demand.  There are many, many things in scarce supply.  But you also need the demand side.  The demand(s) for gold are easy to understand.  For the life of me I cannot see any justification for the demand for crypto except speculation.  This thread is questioning that other oft posited source of demand, its use as "digital gold" i.e. an insurance against all else falling apart.


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## tecate

Duke of Marmalade said:


> I am sure we don't want to re-run the Great Bitcoin Debate.  This thread is questioning that other oft posited source of demand, its use as "digital gold" i.e. an insurance against all else falling apart.


I agree there's little need to reopen the 'Great Bitcoin Debate' Dukey.  As regards the Digital Gold scenario, it's neither been validated or invalidated, we'll have to wait a while longer for confirmation either way.


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## WolfeTone

Duke of Marmalade said:


> This thread is questioning that other oft posited source of demand, its use as "digital gold" i.e. an insurance against _*all*_ else falling apart.



This wouldn't be my view. Bitcoin acts, or at least has the potential to act, as a safe haven against a corrupted monetary system. 
It is not a store of wealth against biological pandemics that are threatening to destabilize economic output and demand.


----------



## Duke of Marmalade

WolfeTone said:


> This wouldn't be my view. Bitcoin acts, or at least has the potential to act, as a safe haven against a corrupted monetary system.
> It is not a store of wealth against biological pandemics that are threatening to destabilize economic output and demand.


I accept there is a demand from lefties who wet themselves at the prospect of the corrupt monetary/capitalist system imploding.


----------



## Brendan Burgess

Hi Duke

Surely lefties would want to see more regulation and not less regulation? 

Brendan


----------



## tecate

Duke of Marmalade said:


> I accept there is a demand from lefties who wet themselves at the prospect of the corrupt monetary/capitalist system imploding.





Brendan Burgess said:


> Surely lefties would want to see more regulation and not less regulation?


This is priceless as more often than not, crypto peeps get accused of being right wing or libertarian nut jobs.  The reality is that it has solid fundamentals that attract people from all backgrounds.  Bitcoin doesn't care for the politics of its users or its protagonists.


----------



## WolfeTone

Duke of Marmalade said:


> I accept there is a demand from lefties who wet themselves at the prospect of the corrupt monetary/capitalist system imploding.



Who wouldn't want a corrupted monetary system to implode?


----------



## JSnowWinterfell

Case





Duke of Marmalade said:


> The original reference was to "only" accept bitcoin. They probably already accept bitcoin (or rather facilitate its exchange into fiat for the purpose of purchases).  I don't know about legitimacy but their business would immediately collapse as there would only be .000001% of the populace in a position to comply with the decree.  Would that %age go up as a result of the decree.  It might double to .000002%.



Sorry Duke, I made it clear my reference was for an example only to support the theory of legitimacy. This is a well researched theory in business academia. 

I wouldn't expect amazon to do that but maybe as a technophobe you like to grab onto anything.


----------



## Duke of Marmalade

JSnowWinterfell said:


> Case
> 
> Sorry Duke, I made it clear my reference was for an example only to support the theory of legitimacy. This is a well researched theory in business academia.
> 
> I wouldn't expect amazon to do that but maybe as a technophobe you like to grab onto anything.


And my reference was to what now transpires was an erroneous interpretation of your example by a crypto peep.
Now GPS with its use of Einstein’s General Theory of Relativity, that I admire.
Performing billions of trial and error attempts to solve a crypto puzzle does not float my boat.


----------



## tecate

Duke of Marmalade said:


> Now GPS with its use of Einstein’s General Theory of Relativity, that I admire.
> Performing billions of trial and error attempts to solve a crypto puzzle does not float my boat.


Luckily, the days of pandering to the whims of the aristocracy Your Dukeness are long gone. PoW is an egalitarian system that is key in creating the most secure peer to peer payments system ever seen.  Luckily many others see its potential despite you not doing so.


----------



## Duke of Marmalade

I was genuinely puzzled by the fact that bitcoin was even more vulnerable to recent developments than conventional assets.
Searching for explanations from crypto websites shows that they too were puzzled.  One suggests it is because of the rush to safe assets like toilet rolls which can’t be bought with bitcoin.  More seriously they observe that the falls will have been a big shock to bitcoin holders who thought they had insurance against such crashes in the markets.
A major claim of the bitcoin community has been ruthlessly exposed.
Hot Air Day acometh.


----------



## Brendan Burgess

Duke of Marmalade said:


> Hot Air Day acometh.



Duke

I was just about to close my short position and now you are making me think that I should wait for the original target of $3,000. 

Brendan


----------



## WolfeTone

Oh no!

_Now Thats What I Call _


Duke of Marmalade said:


> Hot Air Day acometh


 87!  

Notably bitcoin did spike yesterday at around the same time that the US Fed announced it was picking the magic money tree for a $1.5trn increase in its balance sheet and cutting interests rates, in a coordinated effort with Central Banks around the world.
The spike was short lived, as with stocks markets this morning, investors realize that interest rates, money printing, or even bitcoin cannot stop the economic decline attributable to this pandemic.


----------



## tecate

Duke of Marmalade said:


> A major claim of the bitcoin community has been ruthlessly exposed.


Eh, no it hasn't.  Check the XAU/USD chart - big red candles for gold.



Duke of Marmalade said:


> Hot Air Day acometh.


The day of reckoning is coming for bitcoin is it?  Yourself, Brendan and many others have been telling us that for over two years on this discussion board and yet you can't even indicate a general timeframe.
All the while, none of you have addressed the steaming piles of crap from the elephants in the room.  I'm talking about the mismanagement of the conventional system and this reliance on magic-ing up monopoly money....the 'elephants' being your precious central banks - not least the Fed and the ECB.
Here's Ben Bernanke in 2010 explicitly stating (lying) that the FED wasn't printing money.  Both the Europeans and the US now have interest rates on the floor - there's nowhere to go with that....except go back to the magic money tree.
You complain that the Duke's ass would be lacking toilet paper if his dukeness could only acquire it via bitcoin?  I think you're prone to excessive panic like much of the population.  Should you not have the where-with-all to acquire toilet paper with bitcoin,  don't panic.  Jerome Powell and Cristine Lagarde are seeing to it that you'll have an endless supply of watermarked notes that will do the job just fine.  In Venezuela, they've gotten that bit more creative and their local 'magic money' is used to make things like handbags.

Another little factoid for his dukeness to ponder whilst comtemplating the state of the world on the throne....the price of toilet paper has increased 32% since the last financial crisis whilst wages have increased 13%.


----------



## cremeegg

WolfeTone said:


> What has happened, what have we done, achieved, to have an economy valued at 38% more than peak Celtic Tiger times?



(Slightly) more people are at work in Ireland today than were at the previous peak in 2008. 

The people who have joined the workforce are much better educated than those who have left. All of those joining the workforce had the benefit of the free education system, those retiring mostly missed out on that.

More people today are working in the most productive sectors and fewer in the less productive sectors.

The statistics tell us that these things have caused output to be 38% higher than it was in 2008.



Duke of Marmalade said:


> I see that there was a spiked jump in Manufacturing GDP in 2015, I suspect that is Leprechaun economics.



There was indeed, as I understand it, that was mostly the result of the activities of the aircraft leasing industry, while it is a far cry from traditional manufacturing, and the underlying activity takes place all over the world, the aircraft are owned by Irish registered companies, and while the capital behind most of them is not Irish, (the capital behind the biggest is Chinese) the management and administration is Irish based.

A Chinese company paid a US manufacturer billions for a number of planes, they are being flown all over the world by crew from all over the world, but the management and admin staff are in Ireland. Employment is created in Ireland, payroll taxes are paid in Ireland, and Corporate profits taxes are payable (and paid I hope) in Ireland.

Mostly due to the genius of one Clare man.

It is said that this activity distorts the statistics, but the activity is real, and it is recorded in Ireland because Ireland is the legal residence of the owners.


----------



## Fidgety

cremeegg said:


> Mostly due to the genius of a Clare man.



A very proud Tipperary man.


----------



## WolfeTone

cremeegg said:


> The statistics tell us that these things have caused output to be 38% higher than it was in 2008.



I don't think the statistics are telling us that at all. For the _output _of the entire economy to be 38% higher I would expect a significantly larger expansion of the workforce over and above what it was 2007/2008. 
The stats are showing us that the _value _of what we produce is calculated as 38% more than what we were producing in 2008. 
With inflation at near 0% over the period, and the bulk of that period confined to recessionary times, there is little to indicate what it is that has propelled our economy to be valued 38% more than what it was at peak Celtic Tiger days.


----------



## cremeegg

Fidgety said:


> A very proud Tipperary man.



I wasn't thinking of Tony Ryan. Although he did indeed start the aircraft leasing industry in Ireland, it was some years after the collapse of GPA that the industry was revived and largely brought to its present position by a Clare man.


----------



## tecate

The Fed just announced a second $500B in unscheduled overnight REPO injection.  

Can anyone get in contact with Bitcoin head office and see if it wouldn't mind minting up and distributing a few new coins to ease the pain?


----------



## tecate

Back to the 'Digital Gold' debate.  Rome wasn't built in a day - nor was a candidate for 'digital gold' determined to be or not to be such in a couple of days.

Bitcoin is up 20% today - and 60% on it's recent low point at $3,900.  The DJI/S&P/FTSE, etc have been flat today.  Meanwhile, gold is down half a percent.  

Here's a bitcoin convert from the gold world (founder of Gold Bullion International) and his current outlook for bitcoin given we are now in negative interest rate territory.  The founder of Gold Money came out yesterday and suggested better cooperation between gold and crypto proponents on the basis that both are 'sound money'.  

It doesn't matter how good of a safe haven an asset is - if certain actors need to cover losses elsewhere.  If there are bills to be paid, of course money will be pulled from safe haven assets too.


----------



## Brendan Burgess

Here is another long article 









						As This Crisis Worsens, Bitcoin Will Become a Safe Haven Again
					

This liquidity crunch and ensuing government intervention is laying the foundation for bitcoin’s adoption as a safe-haven asset.




					www.coindesk.com


----------



## tecate

Brendan Burgess said:


> Here is another long article


Also on the very long side is this podcast with Raoul Pal (Macro Investor & Investment Strategist).  Pal comes from the conventional trading world but is bullish on bitcoin.  The interview leads to a discussion on the current state of the markets with recession a given and his belief that the powers that be are trying to stave off a depression, the eventual shift to an alternative financial system and bitcoin's role in that.

If anyone has some Covid-induced downtime, it may be worth a listen.


----------



## Duke of Marmalade

tecate said:


> It doesn't matter how good of a safe haven an asset is - if certain actors need to cover losses elsewhere.  If there are bills to be paid, of course money will be pulled from safe haven assets too.


So you sell your "safe haven assets" at a discount of 50% to meet margin calls induced by 30% falls on your risky assets.  It's a strategy.


----------



## tecate

Duke of Marmalade said:


> So you sell your "safe haven assets" at a discount of 50% to meet margin calls induced by 30% falls on your risky assets.  It's a strategy.


Semantics your Dukeness.  If bills have to be paid, bills have to be paid. Remember you're talking about highly leveraged positions in equities needing to be covered.


----------



## Firefly

tecate said:


> Semantics your Dukeness.  If bills have to be paid, bills have to be paid. Remember you're talking about highly leveraged positions in equities needing to be covered.


Not much of a "currency" if you can't pay your bills with it! Any sign of the general population using it to like, purchase something? 

Seems to me that Bitcoin is, since 2013, stuck in the speculative stage.


----------



## Fella

Firefly said:


> Not much of a "currency" if you can't pay your bills with it! Any sign of the general population using it to like, purchase something?
> 
> Seems to me that Bitcoin is, since 2013, stuck in the speculative stage.



I have on occasions thought about buying Bitcoin "digital gold " just for a bit of fun , but it just seems easier to buy gold .Bitcoin seems unnecessarily complicated to me and I've read about it a few times and thought meh that just seems like hard work.
I'm still in my 30's and I find it complex (maybe that says more about me !) 
I think it needs to be simplified if the general population are to start using it.


----------



## tecate

Firefly said:


> Not much of a "currency" if you can't pay your bills with it! Any sign of the general population using it to like, purchase something?
> Seems to me that Bitcoin is, since 2013, stuck in the speculative stage.


This particular thread is concerned with the notion of digital gold.  Use as means of exchange and unit of account are other use cases.  The fact that its not all pervasive in this moment for use as a day to day currency this very day doesn't mean that it won't be.  



			
				Fella said:
			
		

> I have on occasions thought about buying Bitcoin "digital gold " just for a bit of fun , but it just seems easier to buy gold .


Gold will continue to have its place in portfolios that are not ready for digital assets.  With bitcoin there is of course greater risk as its formative but there's a case to be made to gain a certain level of exposure to that risk as the potential upside is far greater than gold. 



			
				Fella said:
			
		

> Bitcoin seems unnecessarily complicated to me and I've read about it a few times and thought meh that just seems like hard work.
> I'm still in my 30's and I find it complex (maybe that says more about me !) I think it needs to be simplified if the general population are to start using it.


You're absolutely right.  The usability issues with bitcoin are well known and there's a hive of bright minds working on making bitcoin more easy to use.   That it has such problems right now doesn't mean that they can't be solved - it just may take some time to iron out, like so many applications of technology and innovation in the past.


----------



## Firefly

tecate said:


> This particular thread is concerned with the notion of digital gold.  Use as means of exchange and unit of account are other use cases.



If was used by the general population to buy stuff & pay bills it probably wouldn't be crashing....


----------



## tecate

Firefly said:


> If was used by the general population to buy stuff & pay bills it probably wouldn't be crashing....


Isn't everything crashing right now?


----------



## Firefly

tecate said:


> Isn't everything crashing right now?


You tell me!


----------



## tecate

Firefly said:


> You tell me!


Ok, everything has crashed... equities, gold, silver, bitcoin, oil.


----------



## Firefly

tecate said:


> Ok, everything has crashed... equities, gold, silver, bitcoin, oil.



Equities aren't used to buy stuff by the general population
Gold isn't used to buy stuff by the general population
Silver isn't used to buy stuff by the general population
Oil isn't used to buy stuff by the general population

I meant currencies.....


----------



## tecate

Firefly said:


> I meant currencies.....


The discussion is about 'digital gold'.

As regards FIAT currencies, check any FIAT currency attached to an economy that's disproportionately oil-based.  They're all down.  Check any currency against the world reserve currency - they're all down against it.

The US dollar has been debased 2512% since 1913.  The printing has gone into overdrive - so you can expect that process to continue.  #QEInfinity Meanwhile, Lebanon has gone into sovereign default.  Ecuador and Italy are close to following it.


----------



## Duke of Marmalade

tecate said:


> Semantics your Dukeness.  If bills have to be paid, bills have to be paid. Remember you're talking about highly leveraged positions in equities needing to be covered.


I'm going to buy your explanation that bitcoin's failure to act as digital gold is because the bitcoin community are steeped in leveraged positions.  It fits in with a theory that bitcoin is nothing more than a playground for speculators.  It serves absolutely no other purpose.  One almost feels sorry for criminals who have been duped into thinking that it is a suitable vehicle for their hard earned, if ill gotten, gains.


----------



## tecate

Duke of Marmalade said:


> I'm going to buy your explanation that bitcoin's failure to act as digital gold


There's been no such comparative failure.  You know that already.



Duke of Marmalade said:


> because the bitcoin community are steeped in leveraged positions.


I'd encourage you to review previous posts on this thread.  Links have been provided to market commentators confirming that there has been a scramble towards covering losses in the conventional markets.
As regards the bitcoin community 'being steeped in leveraged positions', do you have actual facts to back up that statement?  Leveraging comes from the conventional markets.  Some use of same has seeped in to the crypto world.  However, the difference is that within the crypto sphere, there will be no lender of last resort should that happen to a significant extent and go badly wrong.  Many proponents of crypto welcome such a correction if it's ever needed as it will only happen the once. 



Duke of Marmalade said:


> It fits in with a theory that bitcoin is nothing more than a playground for speculators.  It serves absolutely no other purpose.  One almost feels sorry for criminals who have been duped into thinking that it is a suitable vehicle for their hard earned, if ill gotten, gains.


Tell us how you really feel, your Dukeness.  :-D
According to a recent report, just 1% of bitcoin transactions in 2019 were attributed to illicit activity.


----------



## Duke of Marmalade

tecate said:


> According to a recent report, just 1% of bitcoin transactions in 2019 were attributed to illicit activity.


That assuages my concern for that much maligned, and rightly so, community.


----------



## tecate

Duke of Marmalade said:


> That assuages my concern for that much maligned, and rightly so, community.


The Duke of Mar-malaise has spoken.
However, my fears for the sovereign integrity of your Dukedom are not assuaged given recent utterances...

Federal Reserve: "We have infinite cash"
Bank of England: "Unlimited quantities of money"
European Central Bank: "There are no limits"

Update 25/03:  FT article -> 'The Federal Reserve has gone well past the point of 'QE Infinity'.  
Bitcoin doesn't have a buyer of last resort.  If it had, many here would ridicule the hell out of it.  I don't see one mention from BTC naysayers addressing the ills of the conventional financial system.


----------



## RobFer

Duke of Marmalade said:


> I'm going to buy your explanation that bitcoin's failure to act as digital gold is because the bitcoin community are steeped in leveraged positions.  It fits in with a theory that bitcoin is nothing more than a playground for speculators.  It serves absolutely no other purpose.  One almost feels sorry for criminals who have been duped into thinking that it is a suitable vehicle for their hard earned, if ill gotten, gains.


For criminals, cash is always king.


----------



## tecate

RobFer said:


> For criminals, cash is always king.


For sure.  In 2019, only 1.1% of crypto transactions were deemed to be illicit.


----------



## tecate

People are beginning to realise that arbitrarily increasing the money supply has long term consequences:

Investment Strategist Jared Dillian's opinion piece in Bloomberg titled _"Money Has No Meaning Anymore"_.


----------



## tecate

Just as an update to the original query set out in this thread, bitcoin has now recovered to the pricepoint it was at prior to the crash of all markets on March 12.  It's now up 5.7% since Jan. 1, 2020. 

During out and out panic selling, it doesn't hold its value and is correlated to the equities markets.  Some have run the numbers to find that in these conditions, historically bitcoin on average stays correlated for 25 days.  That said, gold also went down with the markets only to recover later.  Bitcoin is well known for its volatility yet oil has been more volatile over the past 2 months.  Last week oil futures posted at negative -$37/barrel. 

As it stands, bitcoins formative claim as digital gold (or a largely uncorrelated asset in its own right) remains intact.


----------



## tecate

Firstly, for anyone reading this and unsure what the bitcoin halving is, here's an explanation.


Duke of Marmalade said:


> Apparently the main driver of the bitcoin bounce is the "halving" expected around May 20th.


It's May 12 your dukeness.  There was little talk of the halving coming out of the covid conundrum.  It was coming back up in any event.  Now that the halving is fast approaching, there has been more consideration of it.  However, I don't think that's in any way feverish.

On a more organic basis, towards the end of last month, we reached the latest milestone of in excess of 3 million bitcoin wallet addresses with a balance of more than 0.1 BTC.


Duke of Marmalade said:


> All the usual suspects are running countdown clocks and constantly reminding their gullible patrons of the boost to price from earlier halvings, even going so far as to justify this based on supply and demand arguments. Really can't get my head around that.


This is a concept you're not used to Dukey - it's called Quantitative Tightening - not this Q.E. unlimited social experiment brought to you by the Fed/ECB/BoJ/BoE, etc.  Can you tell me please why anyone had to pay taxes all these years when it seems the ECB could have just printed this off?



Duke of Marmalade said:


> The new supply is going to fall from 3,600 per day to 1,800 per day. That is out of a total supply of 17,000,000. Besides we have known about this halving coming for 11 years - the fact that the price ramps up in the few weeks before it actually happens is just another manifestation of the total irrationality of bitcoin pricing.


The notion of an efficient market hypothesis is a fair point.  Some believe it's priced in - and some don't.  However, you're wrong to single out the bitcoin market for irrationality given what we're seeing right now in the conventional markets.  The worst jobs figures ever are released and the market goes up!  The conventional markets are the greatest live example of irrationality right now - powered by hopium and magic money.



			
				Brendan Burgess said:
			
		

> Reminds me of the share splits during the dot.com bubble. A rumour that a company with a share price of $50 was going to issue one new share for every share held would result in a price rise. And then the split would happen. Instead of having one share worth $50, you would end up with two shares worth $60. I remember a guy saying to me in all seriousness about a company he had invested in "One more share split, and I will be a millionaire".


It's an interesting anecdote Brendan but it betrays a misunderstanding of the bitcoin halving.  The halving is Quantitative Tightening.  Bitcoin miners expend energy and resources in confirming bitcoin transactions.  A reward of 12.5 BTC is provided every ten minutes for the confirmation of blocks of transactions.  As of block 630000 (expected to be reached on May 12), that reward is cut in half to 6.25 BTC.

It's a case of reduced supply.  If we assume the same demand as pre-halving, reduced supply is likely to induce an upward pressure on price (albeit not immediately afterwards).  That's the opposite of the analogy that you present with.



			
				Brendan Burgess said:
			
		

> With Bitcoin back at $9,000 maybe it's time to short it again.


Fill yer boots.



			
				Brendan Burgess said:
			
		

> Do I sell off some of my buy and hold shares to do so?


Entirely speculative on my part but I suspect that the steaming mess in the conventional markets has not ended - and will play out over the coming weeks/months.



			
				Brendan Burgess said:
			
		

> If the stock market crashes, will Bitcoin crash? Or as it's "digital gold" maybe it will rise.


I thought this was ground we'd already covered but apparently not.  Bitcoin crashed hard in those market panic conditions only to recover later.   Gold crashed in those market panic conditions only to recover later.  People have ran the numbers.  Over its 11 year history, bitcoin has largely been uncorrelated with the conventional markets.  As it stands today, it is once again, the best performing asset class in 2020 - as it was in 2019 and as it has been over the course of the last decade.

In a note to clients on Thursday, Chris Wood - Global Head of Equity Strategy with Jefferies  (the world's 9th largest investment bank) - wrote this:

_"Investors should own both gold *& Bitcoin*... [BTC] should be a source of diversification... its decentralized nature... [&] fixed supply, makes it a hedge vs central bank manipulated fiat $."_

I guess he and his clients are the latest in a long list of 'greater fools'.



			
				Brendan Burgess said:
			
		

> I wonder what event will trigger the realisation that it is a bag of hot air?


I ponder a similar question but yet one that is the antithesis of yours =>  'How long will it take for yourself and his Dukeness to get to that Eureka! moment?  The one that goes along the lines of an understanding that bitcoin is hard digital money which is divisible, censorship resistant and digital gold (or an uncorrelated asset class in it's own right).


----------



## tecate

Duke of Marmalade said:


> I have also corrected the effect of the halving which will be a mere drop of 900 a day in the supply of new bitcoin which the miners dump as soon as they have wiped off the dirt.  If that can have a pricing effect when the existing supply is 17,000,000 it is a very strange dynamic indeed.


Ok, so miners have to release newly minted bitcoin onto the market in order to cover substantial costs and make a profit.  That emissions rate will be cut in half.  Essentially, the bitcoin inflation rate will reduce from 3.7% to under 2%.  Clearly, it will have to have some effect on pricing (if we assume demand to be the same as pre-halving times).



Duke of Marmalade said:


> Of course the halving is influencing the price but not because of fundamental supply/demand dynamics but because of all the hype stirred up by the Coindesks of this world.


I don't believe there is any media without bias although the extent of that bias can vary.  In that regard, Coindesk are not doing so bad.  But if you were to criticise Coindesk, you should equally criticise the markets p0rN eminating from CNBC in the conventional game.  As to 'stirred up hype', I'm not seeing much of that.  The reality is that the macro economic situation and what we are seeing in terms of the application of Modern Monetary Theory (MMT) and infinite QE is the bigger consideration for anyone looking at bitcoin right now.
The irony - bitcoin was supposed to be the great monetary experiment - when in fact its the conventional monetary show that's going down a road where nobody knows the destination.



Duke of Marmalade said:


> As to Chris Wood, all I can recall is that when I researched this about two years ago the vast, vast majority of respected economists were in the BOHA camp. Do you know of any converts?


In the space of that two years, I've seen people who have come from the conventional side of the house start to see the potential in bitcoin.  These have tended to be gold bugs and macro investors - who have built their careers on identifying emerging trends/changes.  Guys like Raoul Pal.
As regards 'respected economists', you're likely to be referring to Keynesian economists given that's the system we have inherited.  Bitcoin is the antithesis of what they're proponents of.  They'll tell you that its deflationary and that's bad.  However, are they seeing the bigger picture in the context of technological progression?  Maybe deflation is unavoidable.
We've had utterances from market analysts supporting the notion that bitcoin is a hedge against the conventional system.  We've had serious players like Fidelity, Goldman Sachs and many others move into the space.  Back in 2018, you said that if this wasn't anything more than hot air, why wouldn't the likes of Samsung make bitcoin mining chips.  It turned out they already were.



Duke of Marmalade said:


> I tried to give CW the benefit of the doubt that he was merely reflecting the reality that in the medium term at least bitcoin will behave like an uncorrelated asset even though it is fundamentally a BOHA. Rather like recommending disinfectant companies because of a surge in Trump induced demand whilst knowing it is a nonsense. But no, he is a cultist himself waxing about its decentralised nature blah, blah, blah.


Ok, let me get this straight.  To your mind the Global Head of Equity Strategy for a leading investment bank is a 'cultist'?  Firstly, he works for an investment bank - they tend to be conservative to say the least!  Secondly, I had never heard of him mentioned in crypto circles up until his note to investors earlier this week.



Duke of Marmalade said:


> On QE and fiat money in general I must admit I am a bit concerned at the resort to the printing presses. You pose an interesting question - why have taxes at all if we can simply print the stuff? I will ponder a response - haven't got one yet.


Keep me posted.



Duke of Marmalade said:


> But this is not Weimar/Zimbabwe/Venezuela Take 4. The QE has until now been an attempt to fight deflation. WZV money printing was to finance hopelessly unsustainable public expenditure. Admittedly the COVID supports will show up as budgetary deficits and therefore potentially inflationary, but with inflation way below target we have some headroom. And there will be COVID induced deflationary effects with cuts in wages and demand.


The Fed and ECB may be a hell of a lot savvier than the Zimbabwe's or Venezuela's of this world.  However, that doesn't mean that they can't get it wrong.  And it's not just the Fed.  There is a political influence there - direct political influence from Trump.  What if going in to the next election, Trump tells them to keep the taps on - just a tiny bit longer than they should?
They managed to keep inflation down post-2008 but now the stakes have been upped quite a bit.  We're dealing with unheard of volumes of monopoly money.  They also backed themselves into a corner as interest rates were already floored - so what other monetary instruments have they left in the toolbox?  They never weaned themselves off QE - and now that they've taken the biggest hit of it ever, will they ever be able to?

Deflation could be equally bullish for bitcoin.  What if treasury bonds in the US go negative - and trust in institutions starts to erode?


----------



## Duke of Marmalade

_tecate _I think we have both been proved very wrong in the past.





			
				Wiki said:
			
		

> Bitcoin scholars advise that Bitcoin was created in reaction to the QE policies post 2008 recession. Bitcoins' fixed supply, and decentralized nature (the Fed cannot print more Bitcoins) lend it as an alternative to QE


I am counting you as one of those "bitcoin scholars" or at least a fellow traveller.  Well, more than 10 years after the printing presses were first turned on in earnest, no sign of the predicted hyperinflation.
For my part, when I first became engaged in this bitcoin stuff here on AAM more than 2 years ago, I was a full blooded BOHA supporter of the _Boss_.  Although bitcoin has fallen by more than 50% since then, I admit that I have not seen the expected BOHA moment.
Getting back to topic, I followed your links and generally became more acquainted with the thinking of bitcoin scholars. They are certainly obsessed with the halving but it seems to me that almost as a response to the sentiments of OP, as a community they have pinched themselves and asked "hey what is going on here?  We are behaving like the establishment.  Is this not Tiocfaid ár lá,  is this not the digital gold coming we have promised ourselves?"  Hopefully, for the sake of us all they are wrong and the conventional system makes a reasonable recovery.  That will be the BOHA moment - the realisation that the conventional monetary machinery which has served society so well over the last century is flexible enough to withstand the bitcoin scholars' worst predictions for it.  _Boss_, fill yer boots.

As an aside I note your following comment:
_"What if treasury bonds in the US go negative - and trust in institutions starts to erode?"_
Is it not a contradiction for people to pay an institution they don't trust to mind their money?


----------



## Duke of Marmalade

tecate said:


> Ok, let me get this straight.  To your mind the Global Head of Equity Strategy for a leading investment bank is a 'cultist'?


Anybody that spouts any of that mantra is a cultist to me.


			
				Paul Krugman said:
			
		

> _“Cryptocurrencies, by contrast, have no backstop, no tether to reality. Their value depends entirely on self-fulfilling expectations – which means that total collapse is a real possibility. If speculators were to have a collective moment of doubt, suddenly fearing that Bitcoins were worthless, well, Bitcoins would become worthless._


What is your view of a Nobel Laureate?


----------



## tecate

Duke of Marmalade said:


> Well, more than 10 years after the printing presses were first turned on in earnest, no sign of the predicted hyperinflation.


Don't be so quick to judge it.  It's an unfinished story.  Interest rates were floored and the QE taps were never turned off.  It was supposed to be temporary.  Now the volume of monopoly money is going to be exponentially larger.



Duke of Marmalade said:


> For my part, when I first became engaged in this bitcoin stuff here on AAM more than 2 years ago, I was a full blooded BOHA supporter of the _Boss_.  Although bitcoin has fallen by more than 50% since then, I admit that I have not seen the expected BOHA moment.


I like the bias you show in cherry picking the 2017 peak to now :-D Just so that there's no confusion, bitcoin is confirmed as the best investment asset class of the past decade, of 2019, and it's currently the best performing asset class thus far in 2020.

I understand that you've both given up in terms of trying to confirm when either of you believe bitcoin will cease to exist..be that next week/month/year/decade, etc.  The Lindy Effect may not work well with your prophecy.



Duke of Marmalade said:


> They are certainly obsessed with the halving


I'm not seeing any such 'obsession' myself but I guess we all approach the subject with our own bias, right?  At the end of the day, you can't tell me how many euro are in circulation right now, how many there will be  in circulation next week/month/year, etc.  The same with interest rates.  Those that understand the bitcoin proposition see it for what it is - hard money - not 'Infinite QE' monopoly money.


Duke of Marmalade said:


> Hopefully, for the sake of us all they are wrong and the conventional system makes a reasonable recovery.  That will be the BOHA moment - the realisation that the conventional monetary machinery which has served society so well over the last century is flexible enough to withstand the bitcoin scholars' worst predictions for it.


You seem to be looking at this in a very binary way.  Decentralised cryptocurrency provides people with an alternative.  It's there if they want to use it or need to use it.  Both FIAT and bitcoin can and will co-exist.  As an aside, do you think the people of Lebanon would agree that 'conventional monetary machinery' has served them well?



Duke of Marmalade said:


> Anybody that spouts any of that mantra is a cultist to me.


See my last post.  Insofar as I'm aware, he has never before made any public utterance about bitcoin.  Presumably this was his professional advice to clients.  It would seem on that basis that anyone that disagrees with you is then a 'cultist'...



Duke of Marmalade said:


> What is your view of a Nobel Laureate?


See my previous comment.  Bitcoin is anathema to Keynesian economists.  However, seeing as you mention Mr. Krugman, here's an insightful quote from the venerable economist from 1998:

_*"By 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than the fax machine's.”*_

Maybe his mistake was in putting a timestamp on it?  If he had left it open ended, there's still a possibility of the fax machine making a comeback.  Perhaps - in honour of the bould Paul - you can send your response by Fax?


----------



## Duke of Marmalade

tecate said:


> Don't be so quick to judge it.  It's an unfinished story.  Interest rates were floored and the QE taps were never turned off.  It was supposed to be temporary.  Now the volume of monopoly money is going to be exponentially larger.


I take it from that that you do anticipate a Zimbabwe moment for the QE fiat currencies.  Care to give us a date?



> I like the bias you show in cherry picking the 2017 peak to now


That was when the _Boss _first admitted discussion on bitcoin, presumably because it had hit dizzying heights. That's when I decided to dig into this bitcoin thing a bit.



> I understand that you've both given up in terms of trying to confirm when either of you believe bitcoin will cease to exist..be that next week/month/year/decade, etc.


No dates but I do think I can see the scenario when not so much that bitcoin will be shown to have no clothes but that its raison d'être will have been nullified.  The clue is in that Wiki quote.  The bitcoin scholars see bitcoin as the insurance policy invented in the face of QE.  If anything that syndrome has intensified with some folk even questioning why fiat regimes levy tax at all.  So I think it will need a big winding down of QE and a return to normal monetary conditions.  I am expecting that the exercise will have been vindicated and that there will have been no Zimbabwe moment.  The bitcoin scholars will then observe that the insurance policy was not needed after all.  I also expect that the bitcoin's attraction for the criminal classes will have been addressed by the authorities.  Then we will get that Krugman moment when it dawns on the speculators that bitcoin isn't tethered to anything at all. That will be the BOHA moment.



> I'm not seeing any such 'obsession' myself but I guess we all approach the subject with our own bias, right?


Look at one of your own links.  An article obsessing about the 50 days to go to the halvening (_sic_).  And as I said countdown clocks abound in bitcoin blogsphere. 





> Those that understand the bitcoin proposition see it for what it is - hard money - not 'Infinite QE' monopoly money.


 Yes, as explained above, that is what is keeping the fantasy afloat and when that justification is shown to be faux the party will be over.



> You seem to be looking at this in a very binary way.  Decentralised cryptocurrency provides people with an alternative.  It's there if they want to use it or need to use it.  Both FIAT and bitcoin can and will co-exist.


Once the fear of fiat meltdown dissipates I can't really see the rôle for crypto.





> As an aside, do you think the people of Lebanon would agree that 'conventional monetary machinery' has served them well?


I am not a Lebanon watcher but I presume it is as relevant to this discussion as Zimbabwe or Venezuela.



> See my last post.  Insofar as I'm aware, he has never before made any public utterance about bitcoin.  Presumably this was his professional advice to clients.  It would seem on that basis that anyone that disagrees with you is then a 'cultist'...


Yep all that Satoshi White Paper, decentralised, blockchain, hash rate, halvings blah blah blah is a cult to me.



> See my previous comment.  Bitcoin is anathema to Keynesian economists.  However, seeing as you mention Mr. Krugman, here's an insightful quote from the venerable economist from 1998:
> 
> _*"By 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than the fax machine's.”*_
> 
> Maybe his mistake was in putting a timestamp on it?  If he had left it open ended, there's still a possibility of the fax machine making a comeback.  Perhaps - in honour of the bould Paul - you can send your response by Fax?


Nice one  Do you have similar dirt on Joseph Stiglitz, Bill Gates, Warren Buffett etc.?


----------



## sonandheir

I have been wondering why for the last 10 years this massive QE has not caused inflation. 

And now we have permanent QE by FED & ECB. This is more than just the corona or slow economies.    

 It is actually due to massive deflation caused by advances in technology. They are trying desperately to prevent this deflation. 

 I think Covid will speed up the tech drive combined with an economic crash which will spark hyper deflation. They will have to turn the printing presses into overdrive. 

The man in the street will ask how can this be? This is when I think the money supply will questioned.

 Is bitcoin the answer? I don't know.   But I do think the wrong amount of Bitcoin in a portfolio is zero.


----------



## Duke of Marmalade

sonandheir said:


> I have been wondering why for the last 10 years this massive QE has not caused inflation.
> 
> And now we have permanent QE by FED & ECB. This is more than just the corona or slow economies.
> 
> It is actually due to massive deflation caused by advances in technology. They are trying desperately to prevent this deflation.
> 
> I think Covid will speed up the tech drive combined with an economic crash which will spark hyper deflation. They will have to turn the printing presses into overdrive.
> 
> The man in the street will ask how can this be? This is when I think the money supply will questioned.
> 
> Is bitcoin the answer? I don't know.   But I do think the wrong amount of Bitcoin in a portfolio is zero.


_son _the *inflation *rate  in Ireland is around 1% so references to "massive deflation" are a bit OTT.  The authorities target 2%, hence the QE.  In any event the bitcoin community are weaned on a faith that hyper inflation of the fiat currencies is just around the corner.  You seem to be diametrically in an opposite camp as you predict hyper deflation.


----------



## tecate

Duke of Marmalade said:


> I take it from that that you do anticipate a Zimbabwe moment for the QE fiat currencies.  Care to give us a date?


No, I'm not - but I recognise it as a possibility.  I recognise that the situation could be mismanaged (as any government/CB can mismanage - and we have a long litany of examples - hit me up if you need a list).  Furthermore, nobody knows the outcome as we have never been here before.  Yes we had QE post financial crisis - but it will pale by comparison with this QE4.  They had the option of reducing rates back then - they don't anymore as they've stayed on the floor.  From what I'm led to believe, it could well be that QE doesn't work very well in its second coming so there's that also.

Bear in mind I'm also open to the notion that escaping deflation may be futile as per my previous post.



Duke of Marmalade said:


> No dates but I do think I see the scenario when not so much that bitcoin will be shown to have no clothes but that its raison d'être will have been nullified.  The clue is in that Wiki quote.


There's no mystery here or need for clues.  A reference to this Times article was included in the genesis block on the bitcoin blockchain.



Duke of Marmalade said:


> If anything that syndrome has intensified with some folk even questioning why fiat regimes levy tax at all.


You mean that people generally are looking to re-examine 'what is money' in the face of unprecedented money printing?  They're right to do so.  And by the way, it wasn't a suggestion that they shouldn't levy taxes. It was a query as to why it can't be paid for using printed off monopoly money.  Or why we can't shake the magic money tree to provide Universal Basic Income (UBI) and we can all pay our taxes with that?



Duke of Marmalade said:


> The bitcoin scholars will then observe that the insurance policy was not needed after all.  I also expect that the bitcoin's attraction for the criminal classes will have been addressed by the authorities.


And why do you give bitcoin a hard time and not gold?  What will happen to gold in this instance?  Before you say it has real world value, it doesn't trade anywhere near the price it is mined at...ergo....its principal use in today's world is as a hedge.



Duke of Marmalade said:


> Then we will get that Krugman moment when it dawns on the speculators that bitcoin isn't tethered to anything at all. That will be the BOHA moment.


Then I guess you should keep your fax machine switched to 'on' in case Paulie has news for you 
As regards the 'tethered' nonsense, it fairs much better than that covid infested cotton in your wallet (which is backed by nada).  I guess that has a use case as toilet roll in pandemic conditions.  Other than that - bitcoin has built in scarcity - the opposite of your FIAT.



Duke of Marmalade said:


> Look at one of your own links.  An article obsessing about the 50 days to go to the halving.  And as I said countdown clocks abound in bitcoin blogsphere.  Yes, as explained above, that is what is keeping the fantasy afloat and when that justification is shown to be faux the party will be over.


Which link are we talking about?  The clue is in your wording.  The bitcoin halving is a significant event for anyone that is involved with bitcoin and anyone that understands the concept.  Of course, it's the subject of discussion (and is being reported on in the conventional media - eg.Forbes/Bloomberg/CNBC, etc.).  However, you're wading in with your own prejudice with the 'obsessing'.   The event - where the supply of bitcoin is in effect reduced - is particularly poignant right now when we have FIAT printing machines going into overdrive.  There's no 'obsessing' implicated  - but there is genuine relevant discussion.



Duke of Marmalade said:


> Once the fear of fiat meltdown dissipates I can't really see the rôle for crypto.


For crypto?  Crypto projects are working on a multitude of use cases - I think you're mistaken.  It's not a case of one project and one use case.
By the way, even if the Fed and the ECB (if there is still a euro and an ECB at the end of this) manage to steer the ship through the storm, so long as bitcoin performs as a largely uncorrelated asset, it will always have a place for those who choose to diversify their risk.


Duke of Marmalade said:


> I am not a Lebanon watcher but I presume it is as relevant to this discussion as Zimbabwe or Venezuela.


This may help.   And yes, they're all very much relevant to this discussion.  They're proof that governments and central banks get it wrong all the time.  We may expect higher standards from the Fed and the ECB but it doesn't mean that they are infallible.


Duke of Marmalade said:


> Yep all that White Paper Satoshi decentralised, blockchain, hash rate blah blah blah is a cult to me.


That's pretty insightful for sure.  Effectively, anyone that says one word that is positive about bitcoin is a 'cultist'.  That's some open-minded and considered thinking right there.



Duke of Marmalade said:


> Nice one  Do you have similar dirt on Joseph Stiglitz, Bill Gates, Warren Buffett etc.?


Hmm...lets see... Stiglitz - we've talked about Keynesian economists already I believe.
Bill Gates:  Has provided both positive and negative commentary about bitcoin and cryptocurrency generally in recent years.  I wonder does that make him a cultist also?
Warren Buffett:  The Oracle of Omaha is clearly to be respected.  However, he's not infallible.  He is on record as saying that he got it very wrong when it came to the tech stocks (google, etc.) in recent years.


----------



## tecate

Duke of Marmalade said:


> In any event the bitcoin community are weaned on a faith that hyper inflation of the fiat currencies is just around the corner.


FIAT currencies die all the time.  The average lifespan of a FIAT currency is 27 years.  If the ECB/BoE/BoJ/Fed are top of the class and remain so, good for them.  If they screw up, there is a plan b for those that want to maintain their wealth and not have it evaporate due to mismanagement.


----------



## Duke of Marmalade

tecate said:


> FIAT currencies die all the time.  The average lifespan of a FIAT currency is 27 years.  If the ECB/BoE/BoJ/Fed are top of the class and remain so, good for them.  If they screw up, there is a plan b for those that want to maintain their wealth and not have it evaporate due to mismanagement.


_tecate _I am considering whether to reply in our major tit for tat or to decide whether it has run its course. But let me address this point.  I am worried about QE backfiring.  I do realise that the whole house of cards depends on skillful management of our monetary infrastructure.  If there was viable insurance against such a meltdown I would have a piece of that action.  I am not trying to score a cheap point here but I cannot see how anybody thinks that bitcoin fits that role. It is tethered to nothing.  With FIAT any train crash will be slow.  With bitcoin every day is a potential train crash.


----------



## tecate

Duke of Marmalade said:


> I am worried about QE backfiring.


Good for you - as you should be (not because it will - but because nobody knows).


Duke of Marmalade said:


> If there was viable insurance against such a meltdown I would have a piece of that action.


It was for that reason that the Global Head of Equity Strategy with one of the world's leading investment banks suggested to clients last Thursday that they buy some gold and some bitcoin.


Duke of Marmalade said:


> I am not trying to score a cheap point here but I cannot see how anybody thinks that bitcoin fits that role. It is tethered to nothing.  With FIAT any train crash will be slow.  With bitcoin every day is a potential train crash.


Neither are backed by anything - but as programmable money, it's known how many bitcoin there will ever be.  You can't say that for FIAT.  Now if they hadn't have dropped the gold standard, then we may never have occasion for this discussion.



Duke of Marmalade said:


> With bitcoin every day is a potential train crash.


Bitcoin remains formative - and that's the reason it's subject to speculation right now.  The volatility will remain - and will slowly dissipate over time as its market capitalisation continues to expand.  In the meantime, it's hard money which has consistently outperformed all other asset classes over the past decade.  As it stands today, it is the best performing asset in 2020 thus far.

As it's formative, of course there's risk.  However, it's very much a case of asymmetric risk.   Ergo the upside risk far outweighs the downside risk - and on that basis, there's justification for a small allocation of bitcoin (say somewhere in the region of 5%) in every portfolio.


----------



## Duke of Marmalade

tecate said:


> Neither are backed by anything - but as programmable money, it's known how many bitcoin there will ever be.  You can't say that for FIAT.  Now if they hadn't have dropped the gold standard, then we may never have occasion for this discussion.


This shows a surprising misunderstanding of how FIAT works.

Bear with me as I try to explain the wonders of FIAT banking in Noddy language.  If I was to ask my bank manager what did she do with my 100k she might say that she lent it on a 30 year mortgage to an up and coming young lawyer*.  In principle I could have dealt directly with the lawyer.  Maybe he would undertake to give me 20 hours legal services every year for the next 30 years.  There are at least 3 problems with such an arrangement.
*Credit risk *- can I be sure of those 20 hours legal services for the next 30 years?
*Maturity mismatch/liquidity risk* - I might want my money back some time soon.
*Exchange risk* - I hope I won't personally need all those legal services, so I will have to exchange them in the market for goods and services that I do need.

I then realise that my bank is providing a very neat service here.  It will pool the credit risk and indeed set up capital on top of that just in case.  The real magic though is it can provide me with almost complete liquidity for what would otherwise be very illiquid assets.
It cannot unfortunately completely remove the exchange risk.  It can mitigate it though - I am at risk to the general price level and not just the price of legal services.
Enter the Central Bank. Amongst its main roles is to manage the credit and liquidity risks but crucially for me it is to manage the exchange risk aka inflation. It has been rather upfront in letting me know that it is targeting a steady fall of 2% p.a. in the exchange rate, though I might possibly be able to offset that with interest once they achieve their target.

Quite a clever system you must admit and one that was not invented overnight and has served the vast bulk of humanity very well indeed.  The main moral of the tale is that my deposit is indeed *backed by a tangible claim on the economy*.  True the entry on the bank ledger or the note or coin in my pocket has no intrinsic value and nor did it have when there was a promise to pay the bearer on demand an amount of gold.
But here is the main difference with bitcoin.  The entry on the blockchain has no intrinsic value just like the entry in my bank account.  But in the words of the Nobel Laureate, unlike the entry in the bank account, the entry in the blockchain is tethered to nada, it is BOHA.  Satoshi him or herself conceded this fatal flaw.

_*  In anticipation of your objections if she had told me she lends most of the bank's money to a Mr Mugabe or a Mr Maduro then alarm bells would ring._



> However, it's very much a case of asymmetric risk.   Ergo the upside risk far outweighs the downside risk.


That's disappointing. I was hoping I was communicating with a numerically literate adversary.  I presume by asymmetric you mean that the most you can lose on btc is $9k whereas according to Raoul Pal you could make $1M in the next 4 years.  The same can be said of any share.  Its downside is limited to -100% there is no ceiling to its upside.  Before you can talk about symmetry you need to weigh the nominaly possible outcomes by their probability of occurrence.


----------



## joe sod

tecate said:


> There's no mystery here or need for clues. A reference to this Times article was included in the genesis block on the bitcoin blockchain.



One of the big shortcomings of bitcoin is that it has no history no heritage, it just leapfrogged onto the financial world from nothing. Therefore it tries to overcome this by using terminology and words from the bible like "genesis" block. Also it wants to be associated with gold one of the oldest forms of wealth and exchange. The fiat currencies all have long histories stretching back centuries and have evolved, they have a heritage sometimes not good ones.

The euro in fairness is an exception to this but it is accepted as a continuation of the big european currencies, although the debate on its legitimacy is still live. However if you were worried about the lack of heritage of the euro you would hardly be jumping from it into bitcoin.

I think the reason why bitcoin has not collapsed is because it is tied to the whole technology sector, believers in bitcoin are also believers in the technology stocks so as long as the bull market in tech stocks continues then also bitcoin.
Maybe regulation could be the nail in the coffin eventually and needing to register who owns what bitcoins and that being made available to authorities. This is also now going to happen in the art markets for decades shrouded in secrecy and money laundering.


----------



## tecate

joe sod said:


> One of the big shortcomings of bitcoin is that it has no history no heritage, it just leapfrogged onto the financial world from nothing.


You're quite right to say that gold has established itself as a proven store of value whereas bitcoin has no such history.  No dispute or debate needed on that front.  What I would say though is that it brings some different components to the party:

- It's digital - It can be sent from party A to party B - anywhere in the world in real-time.  You can walk through borders with bitcoin by just remembering a 12-24 word mneumonic key.  Try doing that with gold.

- Verifiable - It's much easier to determine the validity of bitcoin.  You need expensive testing equipment to determine the purity (or otherwise) of gold.  This is not necessary for bitcoin.

- Divisible - With 8 places of decimal, bitcoin is readily divisible - gold is not.

- It's the native currency of the internet.  In 1999 renowned nobel winning (non Keynesian!) economist, Milton Friedman had the foresight to know that there was a need in society for digital money.  At that early point, he had the foresight to know that there was a need for a native internet currency and that digital money was coming.  (That very same year, Keynesian economist Paul Krugman was telling us that by 2005, we would all see that the fax machine was far more impactful than the entire internet!).



joe sod said:


> Therefore it tries to overcome this by using terminology and words from the bible like "genesis" block.


It's a technological innovation.  Tech comes with its own lexicon.  'Genesis' means 'origin'.  The 'genesis block' is the first block on a blockchain.  IF this ever makes this to mass market use (and I accept that's an 'IF'), ordinary people don't need to know about 'genesis blocks' in the same way as they don't need to know what TCP/IP is when they use the internet.



joe sod said:


> Also it wants to be associated with gold one of the oldest forms of wealth and exchange. The fiat currencies all have long histories stretching back centuries and have evolved, they have a heritage sometimes not good ones.



They share certain similarities - most prominent amongst them - scarcity.  Many proponents of bitcoin have made their way over from the gold sector.  Having said that - and to Friedman's point - it is digital - and brings with it certain advantages for use in our digitised world.



joe sod said:


> The euro in fairness is an exception to this but it is accepted as a continuation of the big european currencies, although the debate on its legitimacy is still live. However if you were worried about the lack of heritage of the euro you would hardly be jumping from it into bitcoin.


The average lifespan of FIAT currencies is 27 years.  As you know, the Euro almost kicked it - in the aftermath of the last financial crisis.  I'm now hearing economic commentators suggest that its going to be similarly challenged as this economic depression unfolds.
As regards moving from euro into bitcoin, I think it would be foolhardy to have 100% of assets in bitcoin. I think it equally foolhardy to have zero gold/bitcoin right now.



joe sod said:


> I think the reason why bitcoin has not collapsed is because it is tied to the whole technology sector, believers in bitcoin are also believers in the technology stocks so as long as the bull market in tech stocks continues then also bitcoin.


Perhaps you're right.  However, all I can say is that I don't hold any technology stocks.  But it makes sense that the starting point for adoption and use is with geeks and tech heads given that it is a technology.



joe sod said:


> Maybe regulation could be the nail in the coffin eventually and needing to register who owns what bitcoins and that being made available to authorities. This is also now going to happen in the art markets for decades shrouded in secrecy and money laundering.


There's no doubt that there are many twists and turns to be taken yet in the bitcoin and crypto saga.  Regulation is going to be a battle over the next few years for sure.  If governments take a hardline view, then those who speculate on the asset will get a firm kick in the guts.  However, I would foresee it playing out as per the war on drugs.  It could be suppressed over many years but it will not be killed off.  In last years Libra hearings in the US, many US senators acknowledged the innovation of bitcoin and cryptocurrencies generally with Rep. Senator Patrick McHenry stating "There's no capacity to kill bitcoin"..."you can kill something that is not a true open distributed ledger".   China allow and disallow bitcoin as it suits them.  In the long run, it won't suit them - but that doesn't mean it won't suit its citizens.  To my mind, it doesn't matter what they do IF crypto develops such that your granny can use it.  It's not governments that will stop it - but innovators ability or otherwise to make it far more easy to use than it currently is.

Bitcoin is the first native currency of the internet and the people's money.


----------



## tecate

Duke of Marmalade said:


> This shows a surprising misunderstanding of how FIAT works.


It very much doesn't your dukeness - and the long 'explanation' you dive into does nothing to overturn that.



Duke of Marmalade said:


> [FIAT]is indeed *backed by a tangible claim on the economy*.


This is truly priceless!  Here's what your average Venezuelan has had to do with their 'tangible claim on the economy'!



Let's not stop there.  Do you want to advise the people of Lebanon about their 'tangible claim on the economy' and what they think of it right now in May 2020?  How about Argentina, Turkey, Iran, Zimbabwe.  You think that advice would be welcomed by citizens of any of the 28 countries who experienced - not runaway inflation - but hyper-inflation over the past 25 years?



Duke of Marmalade said:


> True the entry on the bank ledger or the note or coin in my pocket has no intrinsic value and nor did it have when there was a promise to pay the bearer on demand an amount of gold.


Seeing as you bring it up, do you want to explain to everybody why the actual gold standard was removed after WW1 and the dollar-centric gold standard in 1971?  Let us all know why that was a good idea (from the perspective of ordinary people).



Duke of Marmalade said:


> But here is the main difference with bitcoin. The entry on the blockchain has no intrinsic value just like the entry in my bank account.


Bull poop!  Despite your lengthy scribblings above, you've done nothing to disprove the fact that the covid infested cotton notes in your wallet are nothing more than that.  Bitcoin is programmable money - it assumes a lack of trust - and has designed in scarcity.  Those are some of the important facets it brings to the table.



Duke of Marmalade said:


> But in the words of the Nobel Laureate, unlike the entry in the bank account, the entry in the blockchain is tethered to nada, it is BOHA. Satoshi him or herself conceded this fatal flaw.


This would be the same nobel laureate (Krugman) that said in 1999 that the fax machine would be confirmed as being more impactful than the entire internet by 2005?  Yeah, Krugman is very credible alright.  In the very same year, Milton Friedman called it - having the vision to know that it was only a matter of time until there was a native currency for the internet and the digital age.
As regards Satoshi, he/she/they was able to look at something objectively - unlike yourself with your added 'fatal' misquote.



Duke of Marmalade said:


> _* In anticipation of your objections if she had told me she lends most of the bank's money to a Mr Mugabe or a Mr Maduro then alarm bells would ring._


Aaahhh...of course!  Here's a list of the world's central banks.  Can you please tell us which ones we can trust and which ones we can't?  You're trying to tell us that nothing could possibly happen to the FIAT A-listers like the Euro and the Dollar when the Euro came so close to collapse following the last financial crisis (and we now have mounting speculation about its chances in this coming financial crisis).  You want me to trust my life savings to the whims of unelected officials?  Bitcoin was designed from the get go to assume a lack of trust.  It sounds like a far better system to me from that perspective.  Try and print more bitcoin.  Try and change the interest rate associated with bitcoin.  Try and steal my self custodied bitcoin from me.
Tell me - were the leaders of Greece and Cyprus on your Maduro/Mugabe list a few years back when citizens were forced to take a haircut on their savings?



Duke of Marmalade said:


> That's disappointing. I was hoping I was communicating with a numerically literate adversary.


What's disappointing is that you have to reduce yourself to this type of comment.  What's disappointing is that you can't approach this discussion with any form of objectivity.   You continually talk of bitcoin 'cultists'.  What's clear to me is that you yourself are the one that can't approach this without your own prejudice getting in the way (based on your previous comments about the origins of bitcoin).



Duke of Marmalade said:


> I presume by asymmetric you mean that the most you can lose on btc is $9k whereas according to Raoul Pal you could make $1M in the next 4 years. The same can be said of any share. Its downside is limited to -100% there is no ceiling to its upside. Before you can talk about symmetry you need to weigh the nominaly possible outcomes by their probability of occurrence.


Let me help you with your comprehension difficulty.  Raoul Pal's view (and that of many macro traders/investors) is that bitcoin is a risky asset as it's a brand new asset class at a formative stage.  His view is that given that it's at this embryonic stage in its development, there is huge risk but the potential upside by comparison with many other asset classes is asymmetric in comparison to that risk.  You refer to equities but they do not have the same upside potential as bitcoin does.  You can disagree with that all day long - no problem.  However, if you don't understand it, then you're lost in this discussion entirely and should hit the books or take up some other pursuit.


----------



## Duke of Marmalade

tecate said:


> It very much doesn't your dukeness - and the long 'explanation' you dive into does nothing to overturn that.
> 
> 
> This is truly priceless!  Here's what your average Venezuelan has had to do with their 'tangible claim on the economy'!
> View attachment 4523
> 
> Let's not stop there.  Do you want to advise the people of Lebanon about their 'tangible claim on the economy' and what they think of it right now in May 2020?  How about Argentina, Turkey, Iran, Zimbabwe.  You think that advice would be welcomed by citizens of any of the 28 countries who experienced - not runaway inflation - but hyper-inflation over the past 25 years?
> 
> 
> Seeing as you bring it up, do you want to explain to everybody why the actual gold standard was removed after WW1 and the dolar-centric gold standard in 1971?  Let us all know why that was a good idea (from the perspective of ordinary people).
> 
> Bull poop!  Despite your lengthy scribblings above, you've done nothing to disprove the fact that the covid infested cotton notes in your wallet are nothing more than that.  Bitcoin is programmable money - it assumes a lack of trust - and has designed in scarcity.  Those are some of the important facets it brings to the table.
> 
> This would be the same noble laureate (Krugman) that said in 1999 that the fax machine would be confirmed as being more impactful than the entire internet by 2005?  Yeah, Krugman is very credible alright.  In the very same year, Milton Friedman called it - having the vision to know that it was only a matter of time until there was a native currency for the internet and the digital age.
> As regards Satoshi, he/she/they was able to look at something objectively - unlike yourself with your added 'fatal' misquote.
> 
> 
> Aaahhh...of course!  Here's a list of the world's central banks.  Can you please tell us which ones we can trust and which ones we can't?  You're trying to tell us that nothing could possibly happen to the FIAT A-listers like the Euro and the Dollar when the Euro came so close to collapse following the last financial crisis (and we now have mounting speculation about its chances in this coming financial crisis).  You want me to trust my life savings to the whims of unelected officials?  Bitcoin was designed from the get go to assume a lack of trust.  It sounds like a far better system to me from that perspective.  Try and print more bitcoin.  Try and change the interest rate associated with bitcoin.  Try and steal my self custodied bitcoin from me.
> Tell me - were the leaders of Greece and Cyprus on your Maduro/Mugabe list a few years back when citizens were forced to take a haircut on their savings?
> 
> What's disappointing is that you have to reduce yourself to this type of comment.  What's disappointing is that you can't approach this discussion with any form of objectivity.   You continually talk of bitcoin 'cultists'.  What's clear to me is that you yourself are the one that can't approach this without your own prejudice getting in the way (based on your previous comments about the origins of bitcoin).
> 
> 
> Let me help you with your comprehension difficulty.  Raoul Pal's view (and that of many macro traders/investors) is that bitcoin is a risky asset as it's a brand new asset class at a formative stage.  His view is that given that it's at this embryonic stage in its development, there is huge risk but the potential upside by comparison with many other asset classes is asymmetric in comparison to that risk.  You refer to equities but they do not have the same upside potential as bitcoin does.  You can disagree with that all day long - no problem.  However, if you don't understand it, then you're lost in this discussion entirely and should hit the books or take up some other pursuit.


Ooops!  I have touched a raw nerve.  Time to give this one a rest.  See you for another bout in a few months' time, when you have chilled out and we can analyse the Great Halvening of the BOHA.
Raoul Pal, BOHA will be changing hands at a million quid before the next Great Halvening  You're probably the sort of guy that believes that some folk can bend spoons by just looking at them.
Don't worry you can have the last word - I'm actually having a small wager with myself as to whether it will include repeats of your Venezuala, Lebanon, Fax Machine riffs.
Oh and by the way Milton Friedman was not talking about BOHA, he presumed that the digital currency would be tethered to something of intrinsic value.


----------



## joe sod

@tecate you definitely know your stuff, even though I don't believe in it you make a very good case. You go into alot of depth to back up your case not one line smart alec replies that some others are very fond of on other threads.


----------



## tecate

Duke of Marmalade said:


> Ooops!  I have touched a raw nerve.  Time to give this one a rest.  See you for another bout in a few months' time, when you have chilled out and we can analyse the Great Halvening of [Bitcoin].


I'm perfectly chilled your Dukeness and ready to consider any objective point of discussion you'd like to introduce.   



Duke of Marmalade said:


> Raoul Pal, [Bitcoin]will be changing hands at a million quid before the next Great Halvening  You're probably the sort of guy that believes that some folk can bend spoons by just looking at them.


I keep an open mind your Dukeness and I'm always interested in hearing an *objective* contrarian view.  My views are my own although I don't tend to put a high weighting on guys who believe that the fax machine has advanced society so much further than the entire internet...but each to their own.  You want commentary on spoons?, this is all I've got for you. 



Duke of Marmalade said:


> Oh and by the way Milton Friedman was not talking about [bitcoin]


Well I'll grant you this - his comments were made 10 years before Satoshi published the bitcoin whitepaper on October 31, 2009.  There's no doubt he can't match your Fax Machine guy!

However, lets have a look at those comments again and see what type of currency he was alluding to....

Peer to peer digital cash  - check!​​The trustless movement of funds from party A to party B - without either of them needing to know each other - check!​​Anonymous transfer of value - check!  (Bitcoin is already pseudo-anonymous.  It can be used anonymously by those that are tech savvy enough and there are changes that can be made to the protocol to make it truly anonymous).​​


Duke of Marmalade said:


> he presumed that the digital currency would be tethered to something of intrinsic value.


Really?  Do you have a citation to support that statement?



			
				JSnowWinterfell said:
			
		

> I feel sorry for Tecate.


Thanks but don't let that bother you.  I'm big n' bould enough to scribble a defence.


----------



## Duke of Marmalade

tecate said:


> I'm perfectly chilled your Dukeness and ready to consider any objective point of discussion you'd like to introduce.


 Yes you seem to have chilled out a tad.  My fundamental question is how can a digital entry which is tethered to nothing have any value?  Satoshi itself recognised the difficulty and came up with the ingenious solution that if people think it has value then it has value. A sort of _cogito ergo sum_.  Doesn't cut it for me I'm afraid.


> Really?  Do you have a citation to support that statement?


 No citation but MF was a smart cookie. What more evidence would you need that he assumed the digital currency would be tethered to something of intrinsic value.


			
				tecate said:
			
		

> There's no doubt he can't match your Fax Machine guy!


  You like that one, dont you?  It's good I'll admit.  But just coz someonne thinks that Covid-19 is preceded by 18 such incarnations doesn't mean we dismiss him entirely.


----------



## tecate

Duke of Marmalade said:


> Yes you seem to have chilled out a tad.


There was no change in chill factor, Dukey.  I'm always up for _constructive_ debate and discussion.


Duke of Marmalade said:


> No citation but MF was a smart cookie. What more evidence would you need that he assumed the digital currency would be tethered to something of intrinsic value.


Hahaha, - that's priceless.  In the same way, I should 'assume' that my money would be safe in the Dutchy of Marmalade within the Marmalade Bank?  No thanks!

Everything is right on track in describing bitcoin in that video clip from Milton.  In fact at the very start of that clip - as he leads into the topic, he says that_ "I think that the internet is going to be one of the major forces __for reducing the role of government_."  There's every reason to infer from that - that he wasn't thinking in terms of what you say - unless you think gold rather than government monopoly money and if you back with gold, then you have a centralised element to the currency (and he was referring to peer to peer money - not centralised money).



Duke of Marmalade said:


> My fundamental question is how can a digital entry which is tethered to nothing have any value?


Because it's designed to be trustless and can't be tampered with.  What if - in the weeks leading up to the US election - The Donald leans on the Fed to keep the 'money printer goes brrr' money rolling when Powell might have otherwise thought he could cut back on it, who's interests do you think that would be likely to serve?   People can trust in bitcoin as it was designed to assume a lack of trust - and can't be tampered with.  No, it's not backed by gold but it is programmed and locked in.  You always know how many bitcoin have been issued, what the maximum is that will ever be issued.  You can calculate the inflation rate - and know years in advance what that will be.  Nobody can issue any additional satoshis - unlike EVERY single FIAT currency in existence since the gold reserve was dropped (and even then, who was auditing gold reserves??).



Duke of Marmalade said:


> Satoshi itself recognised the difficulty and came up with the ingenious solution that if people think it has value then it has value. A sort of _cogito ergo sum_.


Two things.  The  first is as I've set out above - in the previous paragraph.  The second is that if he/she did think that (that people affix value to money), where would he/she have seen that?  I mean, in 1971 Nixon pulled the three card trick of going from the gold standard to 100% monopoly money.  At least with bitcoin you can trust in the non-corruptible programmed coding behind it.



Duke of Marmalade said:


> You like that one, dont you?  It's good I'll admit.


I most certainly do like that one Dukey, because here we have a celebrated Keynesian economist demonstrating that although he may be some guru when it comes to the intricacies of the Keynesian school of Economics, he is lacking when it comes to his understanding of the power and implications of technology.  It's particularly apt when we look right now at innovations such as bitcoin and crypto.



Duke of Marmalade said:


> But just coz someonne thinks that Covid-19 is preceded by 18 such incarnations doesn't mean we dismiss him entirely.


Exactly to your point - don't assume because Krugman says 'bitcoin bad' that you don't have to actually consider the minutiae of the proposition yourself (and to which I'd add that I don't recall you ever once acknowledging any facet of bitcoin that was positive in these exchanges).


----------



## Duke of Marmalade

tecate said:


> There was no change in chill factor, Dukey.  I'm always up for _constructive_ debate and discussion.
> Hahaha, - that's priceless.  In the same way, I should 'assume' that my money would be safe in the Dutchy of Marmalade within the Marmalade Bank?  No thanks!
> 
> Everything is right on track in describing bitcoin in that video clip from Milton.  In fact at the very start of that clip - as he leads into the topic, he says that_ "I think that the internet is going to be one of the major forces __for reducing the role of government_."  There's every reason to infer from that - that he wasn't thinking in terms of what you say - unless you think gold rather than government monopoly money and if you back with gold, then you have a centralised element to the currency (and he was referring to peer to peer money - not centralised money).
> 
> Because it's designed to be trustless and can't be tampered with.  What if - in the weeks leading up to the US election - The Donald leans on the Fed to keep the 'money printer goes brrr' money rolling when Powell might have otherwise thought he could cut back on it, who's interests do you think that would be likely to serve?   People can trust in bitcoin as it was designed to assume a lack of trust - and can't be tampered with.  No, it's not backed by gold but it is programmed and locked in.  You always know how many bitcoin have been issued, what the maximum is that will ever be issued.  You can calculate the inflation rate - and know years in advance what that will be.  Nobody can issue any additional satoshis - unlike EVERY single FIAT currency in existence since the gold reserve was dropped (and even then, who was auditing gold reserves??).
> 
> Two things.  The  first is as I've set out above - in the previous paragraph.  The second is that if he/she did think that (that people affix value to money), where would he/she have seen that?  I mean, in 1971 Nixon pulled the three card trick of going from the gold standard to 100% monopoly money.  At least with bitcoin you can trust in the non-corruptible programmed coding behind it.
> 
> 
> I most certainly do like that one Dukey, because here we have a celebrated Keynesian economist demonstrating that although he may be some guru when it comes to the intricacies of the Keynesian school of Economics, he is lacking when it comes to his understanding of the power and implications of technology.  It's particularly apt when we look right now at innovations such as bitcoin and crypto.
> 
> Exactly to your point - don't assume because Krugman says 'bitcoin bad' that you don't have to actually consider the minutiae of the proposition yourself (and to which I'd add that I don't recall you ever once acknowledging any facet of bitcoin that was positive in these exchanges).


_Eppur si move _it is tethered to BOHA


----------



## tecate

Duke of Marmalade said:


> _Eppur si move _it is tethered to BOHA


That's your opinion and you're more than entitled to it.  Mine is set out in my post above.  Bitcoin - as programmable tamper-proof digital money - is tethered and backed by a hell of a lot more than FIAT money is today.  Go back to the gold standard and we can have a different conversation.


----------



## Duke of Marmalade

tecate said:


> I don't recall you ever once acknowledging any facet of bitcoin that was positive in these exchanges).


Every facet of btc is brilliant except for the key fault identified by Satoshi itself. It is tethered to BOHA.


----------



## tecate

Duke of Marmalade said:


> Every facet of btc is brilliant


Well, this is something new for sure! What facets are these Dukey and why are they brillant?



Duke of Marmalade said:


> except for the key fault identified by Satosh itself. It is tethered to BOHA.


That's your opinion and you're sticking to it.  You'll find mine at post #117 above.


----------



## JSnowWinterfell

RobFer said:


> For criminals, cash is always king.



Cash offers privacy, that is not replicated in digital currencies. It is one of the major differences in the technologies between digital and physical.


----------



## tecate

JSnowWinterfell said:


> Cash offers privacy, that is not replicated in digital currencies. It is one of the major differences in the technologies between digital and physical.


It depends on the digital currency.  There are digital currencies that offer privacy such as ZCash and Monero.  Bitcoin is psuedo-anonymous.  There are protocol updates waiting in the wings that could be applied to make it truly anonymous.  In the meantime, users can use something like CoinJoin to avail of greater anonymity.  Bitcoin digital wallets like Wasabi and Samourai come with CoinJoin built in.


----------



## tecate

Bloomberg's Crypto Outlook - June 2020 edition.

In its report, Bloomberg acknowledge the "_maturation of Bitcoin toward a digital version of gold".
"Bitcoin is the benchmark crypto asset and is increasingly becoming a digital version of gold".
"Bitcoin is winning the adoption race as the gold-like store of value."_


----------



## Brendan Burgess

Are they not reading askaboutmoney?


----------



## Fella

This thread has been great reading , thanks to @tecate for his explanations and @Duke of Marmalade who extracted the information by strict questioning. I have been spending a lot of time over last month or so learning all I can on cryptocurrencies. I have been converted well kind of , I am now going to keep an equal weight of my porfolio in Bitcoin as I do Gold. I think the key is read this thread but do your own research these threads can be great but the internet is a strange place for debate , if in a pub ( remember them days) @Duke of Marmalade might concede that @tecate is right but generally that doesn't happen in internet exchanges.


----------



## Duke of Marmalade

Sorry _Fella_,  I will never see any substance in btc.  At least not until mainstream economists start to embrace it, I do respect experts in their field.
I note your conversion but I suspect that it is not driven by a conviction that btc will fulfil its intended role as a global transactional currency.  Rather I would surmise that you have satisfied yourself that whatever is driving its price will continue to do so and in a possible diversification of mainstream assets.  In other words, you are not too concerned about its fundamentals, just its price trajectory.  The hedge fund guys who have seen a role for it certainly seem to view it in that light or even as a speculation.  But for fundamentals I rely on my own judgement and on those of the experts in the field.

If I ever do meet _tecate _in a pub, I will be glad for a 2 meter social distancing. I would not be an equal in any physical confrontation


----------



## Fella

Duke of Marmalade said:


> Sorry _Fella_,  I will never see any substance in btc.  At least not until mainstream economists start to embrace it, I do respect experts in their field.
> I note your conversion but I suspect that it is not driven by a conviction that btc will fulfil its intended role as a global transactional currency.  Rather I would surmise that you have satisfied yourself that whatever is driving its price will continue to do so and in a possible diversification of mainstream assets.  In other words, you are not too concerned about its fundamentals, just its price trajectory.  The hedge fund guys who have seen a role for it certainly seem to view it in that light or even as a speculation.  But for fundamentals I rely on my own judgement and on those of the experts in the field.
> 
> If I ever do meet _tecate _in a pub, I will be glad for a 2 meter social distancing. I would not be an equal in any physical confrontation



Yeah your right I don't care too much for it's fundamentals I think its at a place now where I can't forsee it falling to zero , maybe it started it's life as a bag of hot air but I like it now . 
Do I think it's wise to have a portion of your investment in Bitcoin ? Yes 
Do I think it will still be around in 20 years ? Yes 
I'm not too keen on keeping gold in my portfolio but it's seen as a safe haven so I hold some for diversification. I will hold Bitcoin for similar reasons , physical gold is hard to buy and store , I do think Bitcoin can fill a void in the digital gold space.


----------



## tecate

Duke of Marmalade said:


> If I ever do meet _tecate _in a pub, I will be glad for a 2 meter social distancing. I would not be an equal in any physical confrontation


I wouldn't dare touch a hair on yer head yer Dukeness, lest the forces of the Dutchy of Marmalade would have me in irons. 

Tell you what, if Bitcoin goes to zero as you propose, I'll fork out some of that Covid infested money for a couple of pints for his Dukeness.   When it goes to $20k, you can do the same, paying in Bitcoin.


----------



## Brendan Burgess

Fella said:


> in a pub ( remember them days) @Duke of Marmalade might concede that @tecate is right



He would have to be very drunk. 

Brendan


----------



## Brendan Burgess

Fella said:


> Do I think it will still be around in 20 years ? Yes



Hi Fella

Can you explain your reasoning? 

It is a bag of hot air. It has lasted astonishingly long but it can't defy reason for 20 years. 

Even if you think that there is some merit in an untethered cryptocurrency, why should it be Bitcoin? 

Brendan


----------



## Fella

Brendan Burgess said:


> Hi Fella
> 
> Can you explain your reasoning?
> 
> It is a bag of hot air. It has lasted astonishingly long but it can't defy reason for 20 years.
> 
> Even if you think that there is some merit in an untethered cryptocurrency, why should it be Bitcoin?
> 
> Brendan



Well I think it was tricky to get it to this stage but the hard work is done now, almost everyone has heard of Bitcoin and most people accept it as having a value. 
Enough people are using it now as a digital gold or alternative storage of wealth or whatever you would like to call it that the likelihood of it crashing to a worthless figure is slim to none. 
I would expect the first few years of anything new to be very volatile , I think that's what we saw with Bitcoin. How do you value a BOHA. ? I think going forward it will become less volatile. Of course Bitcoin started as nothing it was worthless but it is now it is accepted as been worth something the same way gold is accepted as been worth something , you could argue gold is worthless if everyone valued it as 0 it would be worth 0 . But we don't we like gold because it's rare and expensive. If everyone valued gold at zero it be zero . Stuff is worth what we value it at.
i prefer Bitcoin over other crypto's because it's the most well known so least likely to fail imo.


----------



## Brendan Burgess

Fella said:


> But we don't we like gold because it's rare and expensive.



Rarity and expense probably contribute to the price of gold.

But it's appearance in jewelry and industry is very important.  

I wonder if people who compare BTC to gold have every seen gold jewelry or ornaments?  

Your reasoning would have had you buying tulips during tulipmania. 

Brendan


----------



## Fella

Brendan Burgess said:


> Rarity and expense probably contribute to the price of gold.
> 
> But it's appearance in jewelry and industry is very important.
> 
> I wonder if people who compare BTC to gold have every seen gold jewelry or ornaments?
> 
> Your reasoning would have had you buying tulips during tulipmania.
> 
> Brendan



But if people didn't like gold in jewelry would it still be that expensive? 

The conversation has been done to death now I don't want to keep going over old ground .
It's why I suggest people do there own research because it's no and it's not clear cut either way. 
It's clear you don't like Bitcoin and see it as a BOHA. 
Your going to keep saying it's worthless and like tulips , I'm going to argue it's worth what people are willing to pay for it , people see it as a having value .
I think the most likely thing is Bitcoin is around in some form for good , its price stabilises and it becomes a more mainstream store of wealth . I absolutely do not forsee it going to zero or worthless . Therefore I'm going to take a stake in Bitcoin.


----------



## Brendan Burgess

Fella said:


> It's clear you don't like Bitcoin and see it as a BOHA.



On the contrary, I love Bitcoin.

If people are prepared to pay $15,000 for something which is worth nothing, I can make money out of it. 

While it has been done to death, I was interested to see why you changed your mind on it.

Brendan


----------



## Fella

Brendan Burgess said:


> On the contrary, I love Bitcoin.
> 
> If people are prepared to pay $15,000 for something which is worth nothing, I can make money out of it.
> 
> While it has been done to death, I was interested to see why you changed your mind on it.
> 
> Brendan



I haven't really changed my mind , if you check back all my posts on Bitcoin I've consistently said "something is worth what people are prepared to pay for it". 
The thing is why try to compare Bitcoin to something else ?, it's not gold ,its not art , its not digital gold and its not tulips. So these debates end up comparing it to gold and they go around in circles about Gold having value and been used in industry or whatever. You can't compare Bitcoin to anything else its a new technology I do think it has a place and offers an alternative to government backed money.

I changed my mind on actually owning Bitcoin because I felt like the price was far too volatile at the start , if you look at Bitcoin now over the last year or so it hasn't actually moved that much. I also didn't know how to buy Bitcoin and wasn't interested in finding out. 

I don't think you can say you can make money out of it.  You made one or two ? succesful trades shorting Bitcoin which could of went either way. I don't think your actively making money shorting Bitcoin ? There is no way to make money out of something people are prepared to pay 15000 for that remains at 15000 indefinitly .


----------



## Duke of Marmalade

Fella said:


> I changed my mind on actually owning Bitcoin because I felt like the price was far too volatile at the start , if you look at Bitcoin now over the last year or so *it hasn't actually moved that much*. I also didn't know how to buy Bitcoin and wasn't interested in finding out.


52 week high 13,796  52 week low 4,106  This is meant to be a currency for heaven's sake, a store of value. 
_Fella _you're a smart cookie, anyone who can beat the bookies impresses me on that front.  But that comment suggests to me that you are trying to convince yourself to be part of the cult.


----------



## Brendan Burgess

Duke of Marmalade said:


> _Fella _you're a smart cookie



That's what surprised me about Fella buying BTC.   It's clearly worth nothing.  And he has been taken in by the mania.

Brendan


----------



## Firefly

tecate said:


> Tell you what, if Bitcoin goes to zero as you propose, I'll fork out some of that Covid infested money for a couple of pints for his Dukeness.   When it goes to $20k, you can do the same, paying in Bitcoin.


How exactly would Duke pay for these pints in Bitcoin?


----------



## Fella

Brendan Burgess said:


> That's what surprised me about Fella buying BTC.   It's clearly worth nothing.  And he has been taken in by the mania.
> 
> Brendan



Well I'm also surprised by yourself Brendan .
The statement it is clearly worth nothing is 100% wrong , but you keep quoting it as fact.
It is clearly trading at a value above zero.
Your statements about making money from Bitcoin because people are happy to pay 15000 for something worth nothing is based on one example of how you made a trade that you nearly lost on. You are clearly not making any money outside that trade on the back of this worthless coin.


----------



## Brendan Burgess

Hi Fella

We have gone over this before. You have paid $7,000 or whatever, for something which you know has no intrinsic value, because there are people out there who think it is worth that. There is absolutely no basis for valuing this at anything other than Zero.   

That is crazy for someone who understands gambling and risk. 

Brendan


----------



## Fella

Brendan Burgess said:


> And he has been taken in by the mania.
> 
> Brendan



It's not like I have 100% of my wealth in Bitcoin I have less than 2% I would encourage people to diversify . I don't think holding Bitcoin as part of a balanced portfolio is irrational. 


Brendan Burgess said:


> Hi Fella
> 
> We have gone over this before. You have paid $7,000 or whatever, for something which you know has no intrinsic value, because there are people out there who think it is worth that. There is absolutely no basis for valuing this at anything other than Zero.
> 
> That is crazy for someone who understands gambling and risk.
> 
> Brendan



One of the main things your learn from gambling is the market is good at putting a fair price on something. In an openly traded market with buyers and sellers we should reach a fair price. Over years of arbitrage you would consistently win over time taking bigger prices at bookmakers and laying at exchanges. The exchanged reflect the real price more often than not.

So why is Bitcoin not worth 0 on the exchanges?


----------



## tecate

Brendan Burgess said:


> Rarity and expense probably contribute to the price of gold.


Scarcity is front and centre when it comes to the price of gold.  It's ludicrous to suggest otherwise.  Look at any study that examines the essential characteristics of a store of value and scarcity is at the top of the list.



Brendan Burgess said:


> But it's appearance in jewelry and industry is very important.


As jewelry it is clearly being used for the most part as a store of value.  The industrial use cases are peripheral.  I've cited data from the World Gold Council (WGC) previously to back this up.



Brendan Burgess said:


> I wonder if people who compare BTC to gold have every seen gold jewelry or ornaments?


I wonder if the people who have gold gathering dust and stored professionally in vaults around the world have ever seen it either?



Brendan Burgess said:


> Your reasoning would have had you buying tulips during tulipmania.


Again, we've been over this.  Like his Dukeness, you have never been objective enough to examine the facets of bitcoin that are positive in terms of use as a store of value and a medium of exchange.  Tulipania is in no way relevant to this conversation as it doesn't fulfill any of those characteristics.


Brendan Burgess said:


> On the contrary, I love Bitcoin. If people are prepared to pay $15,000 for something which is worth nothing, I can make money out of it.


Thank you for your service Brendan.  Because of the irrational stance that you and others take at the earlier stages of the adoption of digital assets, it allows opportunity for others to benefit and capitalise on that.



Fella said:


> But if people didn't like gold in jewelry would it still be that expensive?


The price of gold is a construct of its use as a store of value - and not industrial uses.  Its use as jewelry is that of a store of value for the most part also (as confirmed by the World Gold Council).  If this wasn't the case, why would its price far, far exceed its production cost?



Fella said:


> I think the most likely thing is Bitcoin is around in some form for good , its price stabilises and it becomes a more mainstream store of wealth . I absolutely do not foresee it going to zero or worthless . Therefore I'm going to take a stake in Bitcoin.


That price volatility dissipates over time as adoption and overall market capitalisation expands is entirely logical.



Fella said:


> The thing is why try to compare Bitcoin to something else ?, it's not gold ,its not art , its not digital gold and its not tulips. So these debates end up comparing it to gold and they go around in circles about Gold having value and been used in industry or whatever. You can't compare Bitcoin to anything else its a new technology I do think it has a place and offers an alternative to government backed money.


If people are not prepared to compare the general characteristics point by point against FIAT money or Gold, there's little chance they will be open to identifying the value add in terms of its ability to be transferred digitally and uncensored on a peer to peer basis, it's superior divisibility and its locked in fixed supply.


Duke of Marmalade said:


> 52 week high 13,796  52 week low 4,106  This is meant to be a currency for heaven's sake, a store of value.


As well you know, this has been explained to you umpteen times.  You don't roll out a brand new asset starting from ground zero without price volatility.  That volatility declines as its overall market capitalisation increases and as the price discovery process and Bitcoin adoption progresses. To that very point, the data shows that Bitcoin's price volatility continues to decrease over time.  Meanwhile, a conventional asset that has been front and centre of the old economy over the past century (Oil) has been far more volatile than Bitcoin this year - yet you don't get in any way animated about that.
Its volatility doesn't negate it from being a good store of value unless the market participant has the lowest of time preferences.  At the end of the day, it has been the best performing asset of 2019, of the entire last decade and it is currently the best performing asset of 2020.
As a means of exchange/currency use, volatility is a drawback - but volatility will decrease over time and usability will improve dramatically.  At that point, its performance improves considerably as a currency.



Duke of Marmalade said:


> But that comment suggests to me that you are trying to convince yourself to be part of the cult.


Again with the emotive and inflammatory 'cultist' jibe.  This from a guy who - as part of these discussions has never once been objective enough to outline the aspects of Bitcoin which are positive and rarely explored the deficiencies in the FIAT money system.



Brendan Burgess said:


> That's what surprised me about Fella buying BTC.   It's clearly worth nothing.  And he has been taken in by the mania.


Once again with the 'mania'.  Where is this 'mania' to be found?  There was market over-exuberance in late 2017 but we're a couple of years on from that.


Firefly said:


> How exactly would Duke pay for these pints in Bitcoin?


In this instance, quite easily if Dukey agrees to it.


----------



## tecate

Brendan Burgess said:


> We have gone over this before. You have paid $7,000 or whatever, for something which you know has no intrinsic value, because there are people out there who think it is worth that. There is absolutely no basis for valuing this at anything other than Zero.


If it has zero value today, go out onto the markets this very moment and short it then.  Put your intrinsically valueless FIAT money where your mouth is Brendan.
On the intrinsic value of Bitcoin, it's no more no less than FIAT money on that score.  However, it has some serious value adds which FIAT doesn't. The problem with the FIAT money system historically has been that people can tinker with it - with excessive money printing etc.  Nobody can do that with Bitcoin.  It has been hard set to have a fixed supply.  You fail to acknowledge that as a feature and benefit.



Fella said:


> It's not like I have 100% of my wealth in Bitcoin I have less than 2% I would encourage people to diversify . I don't think holding Bitcoin as part of a balanced portfolio is irrational.


Precisely this.  It's irrational not to on this basis as it's asymmetric risk that you're taking on.



Brendan Burgess said:


> That is crazy for someone who understands gambling and risk.


On the contrary.  See above.  With a 2% allocation, he understands risk far better than you do.  It's a case of asymmetric risk.


----------



## Firefly

tecate said:


> In this instance, quite easily if Dukey agrees to it.


But how? I'm not aware of any pub that accepts Bitcoin are you?


----------



## tecate

Firefly said:


> But how? I'm not aware of any pub that accepts Bitcoin are you?


This thread is about Bitcoin's use case as a store of value and/or digital gold.  You're quite fixated on transactional use.  However, it's quite simple - have Dukey accept the offer and all will be revealed if/when BTC goes to 20K.


----------



## Leo

Fella said:


> I would encourage people to diversify



As you're now in Bitcoin, did you consider diversifying across the thousands of other crypto options?


----------



## Brendan Burgess

We have gone over all the points many times.

There was a cult behind tulipmania. They argued that a single bulb of Viceroy was worth 


Two lasts of wheat448ƒFour lasts of rye558ƒFour fat oxen480ƒEight fat swine240ƒTwelve fat sheep120ƒTwo hogsheads of wine70ƒFour tuns of beer32ƒTwo tuns of butter192ƒ1,000 lbs. of cheese120ƒA complete bed100ƒA suit of clothes80ƒA silver drinking cup60ƒ*Total*2500ƒ

Anyone who claimed that it wasn't was told that the market determines the value. If someone was prepared to pay all that for a single bulb, then it was worth that and was not just a tulip bulb.  

It was the same with the dot.com mania.

I remember reading Extraordinary Popular Delusions and the Madness of Crowds and I wondered how could so many clever people behave so stupidly. 

And we see it again now with Bitcoin.

Brendan


----------



## Brendan Burgess

Leo said:


> As you're now in Bitcoin, did you consider diversifying across the thousands of other crypto options?



With a diversified portfolio generally and only 2% of his assets in Bitcoin, there wouldn't be much advantage to diversifying within the 2%. 

It's like when someone wants to invest €10k in the stock market and that represents only 1% of their wealth, I tell them to buy just one share.  If you are investing 100% of your wealth in the stock market, you need to diversify it over many shares.

Brendan


----------



## Firefly

tecate said:


> However, it's quite simple - have Dukey accept the offer and all will be revealed if/when BTC goes to 20K.


That's not answering the question to be fair and you know it. As far as I am aware nowhere in Ireland accepts Bitcoin to buy pints, so the Duke could not accept the offer.....


----------



## tecate

Brendan Burgess said:


> We have gone over all the points many times.


Indeed we have Brendan - and never once have you acknowledged one single characteristic of Bitcoin that contributes towards it being a good store of value or means of exchange.  I can see a rationale in arriving at a viewpoint that on the whole, you feel it's inferior.  I can't if you can't acknowledge its positive attributes and include those in forming your opinion on it.  That's not credible.



Brendan Burgess said:


> There was a cult behind tulipmania.


I see few attributes in tulips as a store of value or means of exchange but how was it a 'cult'?  You mean people that held a certain opinion?



Brendan Burgess said:


> Anyone who claimed that it wasn't was told that the market determines the value. If someone was prepared to pay all that for a single bulb, then it was worth that and was not just a tulip bulb.


Except that the analogy is misplaced.  Perhaps if you likened Tulipmania to the Irish housing boom n' bust, those would be comparatively closer.

Take a look at the comparison of Gold, Bitcoin and FIAT money graded against the recognised characteristics of a good store of value in the chart below.  As you can see, Bitcoin brings something tangible to the table.  Now add your tulips to that list and assess them against those characteristics.  Do the same with your 'scarce poetry' that you mentioned previously.  Tulips don't score as a store of value.  Bitcoin does in many ways.



Brendan Burgess said:


> It was the same with the dot.com mania.


There was major over exuberance in the dot com bubble.  Many investors got badly burnt as a consequence.  However, out of that came something entirely relevant.  Most tech startups were vaporised.  However, to say that there wasn't something tangible at the heart of it is inaccurate as emerging from it came the likes of Amazon, Ebay, Qualcomm, Cisco and many others. Furthermore, that same wave of innovation led on to the development of the other FAANG companies - who today have a combined market capitalisation of $5 Trillion.

I have not seen anyone here who has not acknowledged that the vast majority of cryptocurrency projects will fall by the wayside.  They will be survived by category leaders (as there are a multitude of use cases - not just the Bitcoin-centric store of value/medium of exchange use case that we discuss here).



Brendan Burgess said:


> I remember reading Extraordinary Popular Delusions and the Madness of Crowds and I wondered how could so many clever people behave so stupidly. And we see it again now with Bitcoin.


As outlined above, Tulipmania wasn't based on anything tangible - so lets take that out of the equation entirely.  The technology implicated in the dotcom boom was very much tangible and shapes our world today.  Can people become irrational and both overvalue and undervalue something? Absolutely.  However, that doesn't leave Bitcoin with a price of zero.  The only frame of reference that you have is the 2017 price surge when Bitcoin had been through that cycle four times previously.  This is nothing new - and it doesn't stop Bitcoin. Taking the surges out of the equation, over the long term, it's price goes up with adoption.  Bear in mind too that the dot com bubble was a factor of EIGHT times larger than crypto.

Nobody has suggested that investing in digital assets right now is anything other than high risk.  However, when you look at @Fella 's allocation of 2% of his portfolio in Bitcoin -  sized on the basis of an exposure to asymmetric risk, how is that 'behaving stupidly'?

Maybe you should take your readings of 'Extraordinary Popular Delusions' and the 'Madness of Crowds' as a case in point for the Dow and S&P right now that demonstrate NO earthly rationale or connection with the economic realities as it stands today.

Characteristics of a Good Store of Value (Source):


----------



## tecate

Leo said:


> As you're now in Bitcoin, did you consider diversifying across the thousands of other crypto options?


So you're leaving that open to cryptos that pursue entirely different use cases?  If not, and it's the shortlist of cryptos in the same category as Bitcoin, which would you suggest and why?  Don't get me wrong - I'm quite happy to accept that Bitcoin is not a done deal - but I'm curious to know as it stands today what you would suggest as being superior technologically and in terms of network effect to usurp it.


Firefly said:


> That's not answering the question to be fair and you know it. As far as I am aware nowhere in Ireland accepts Bitcoin to buy pints, so the Duke could not accept the offer.....


As pointed out, your question is...
1. Off topic for this thread.
2. A hypothetical as Dukey has not accepted
3. Rhetorical - as it's been discussed many times with you on other threads.  Bitcoin's use as it stands today is limited as a medium of exchange.  You want me to acknowledge that as it seems this satisifes the set view you take on it - as it seems to your mind, if something doesn't fulfill a role at this very moment, then it never can and never will.  Technology and innovation doesn't stand still and you're wrong in your assumptions.  If I were to get on the upside of that little wager, Dukey will be paying in Bitcoin though.  For that, he would have to back his convictions and accept the wager.
I'm pretty confident we've covered all of this in a previous thread - but if you want to discuss further, I'd suggest opening up a separate thread as it's separate from the digital gold/store of value use case being discussed here.


----------



## Brendan Burgess

tecate said:


> As outlined above, Tulipmania wasn't based on anything tangible - so lets take that out of the equation entirely.



Hi tecate

You are missing the point. 

Clever people take leave of their senses. They lose touch with reality.  They take a bag of hot air and say "it's limited in supply, it's not controlled by government, it can't be censored" therefore it's worth $20,000. My toenails meet all those criteria but no one wants to buy them. 

You are subject to a delusion.  Lots of others are as well.  Even when it does go to zero, you will deny it. You will say that it was a conspiracy of fiat money governments to control the people.

Read Popular Delusions and you will see yourself in it.

Brendan


----------



## Firefly

tecate said:


> As pointed out, your question is...
> 1. Off topic for this thread.



You are the one claiming someone can buy you pints with Bitcoin, not me! I am just asking how they would be able to do this. Afterall, you have stated:



tecate said:


> In this instance, quite easily if Dukey agrees to it.





tecate said:


> However, it's quite simple - have Dukey accept the offer and all will be revealed if/when BTC goes to 20K.



So if it's this easy and simple, shouldn't you let us know????




tecate said:


> 3. Rhetorical - as it's been discussed many times with you on other threads.  Bitcoin's use as it stands today is limited as a medium of exchange.  You want me to acknowledge that as it seems this satisifes the set view you take on it - as it seems to your mind, if something doesn't fulfill a role at this very moment, then it never can and never will.  Technology and innovation doesn't stand still and you're wrong in your assumptions.  If I were to get on the upside of that little wager, Dukey will be paying in Bitcoin though.  For that, he would have to back his convictions and accept the wager.


I'm just asking you a simple question that's all....you're saying someone could buy you pints with Bitcoin and I'm just asking how......


----------



## Duke of Marmalade

Brendan Burgess said:


> My toenails meet all those criteria but no one wants to buy them.


_Boss _I was  impressed by your scarce poetry.  But now you launch your toenails.  Next it will be your finger nails.  I see a proliferation of Brendanalia though you are unlikely to match Bitcoin with its 2,000 lookalikes.


----------



## Duke of Marmalade

tecate said:


> As well you know, this has been explained to you umpteen times.  You don't roll out a brand new asset starting from ground zero without price volatility.


Now I know what being quoted out of context means.  My post was in response to the following:





			
				Fella said:
			
		

> if you look at Bitcoin now over the last year or so it hasn't actually moved that much


The fact that you have explained its volatility umpteen times actually reinforces  my distancing myself from _Fella's _opinion that btc volatility is now a thing of the past.


----------



## Fella

I'll spend my life following efficient market hypothesis I've seen the power of the markets and the knowledge of the crowd. I might miss some things , I will always ignore the advice of "experts" that say Tesla / Bitcoin / or whatever the next craze is is overvalued. I am a firm believer that long term i'll come out on top with this strategy. I firmly believe that I am buying Bitcoin at a fair value , there are enough crazy people saying it should be 100k and others saying its worthless. We could argue all day forever on askaboutmoney but it will never change the price of Bitcoin , there are literally millions of people buying and selling. Maybe everyone is delusional. 

But one thing that confuses me is how can Brendan be so sure all these people that are delusional buying Bitcoin are going to stop and let it go to zero? How can you predict the behaviour of delusional people surely if they are delusional today they will be delusional tomorrow and the next day?


----------



## tecate

Brendan Burgess said:


> You are missing the point.


And whilst you claim I am missing the point, you are conveniently skirting around it.



Brendan Burgess said:


> Clever people take leave of their senses. They lose touch with reality.  They take a bag of hot air and say "it's limited in supply, it's not controlled by government, it can't be censored" therefore it's worth $20,000.


And here is the evidence that you're skirting around the point.  I asked you for once to consider Bitcoin against the universally accepted characteristics of a good store of value (as per the chart in my post above).  You won't do that.  You won't acknowledge any facet or characteristic of Bitcoin in this context and that to me lacks both objectivity and credibility.



Brendan Burgess said:


> My toenails meet all those criteria but no one wants to buy them.


Yeah, against those characteristics, your 'toenails' rate just under tulips and your poetry (although his Dukeness is a fan so that might drive it up the rankings).


Brendan Burgess said:


> You are subject to a delusion.  Lots of others are as well.  Even when it does go to zero, you will deny it. You will say that it was a conspiracy of fiat money governments to control the people.


Your premise is flawed from the outset.  You are suggesting the whole time that there is nothing tangible at the heart of digital assets.   As regards Bitcoin going to zero, I've acknowledged that as a possibility (although it's one that I think is unlikely as it stands today).  I have acknowledged that Bitcoin could be superseded by another digital asset for these use cases (although that's not my thinking as it stands today).
I have never once mentioned anything about conspiracy over two years of discussion of this topic here.  Government regulation and how that interaction with Bitcoin pans out over the coming years has a role to play for sure.  That's been acknowledged by me and by your fellow no-coiners.
If it goes to zero, of course I will accept it has the price of zero.  I have outlined a number of obstacles that Bitcoin must overcome to bring about greater adoption.
On the flip side, you have...
- never acknowledged a single facet or positive characteristic of Bitcoin.
- never acknowledged that you could be wrong in your thesis re. Bitcoin going to zero.
- already gotten it wrong in your past predictions of Bitcoin going to zero...in 2018 and in 2019...so much so that you've given up on calling it - and leaving it open ended to the point where the suggestion is that it will happen 'sometime'.  The average life of a FIAT currency is 27 years.  Bitcoin is already the majority of the way there.



Brendan Burgess said:


> Read Popular Delusions and you will see yourself in it.


I haven't read Popular Delusions but I have read a couple of books on market psychology.  ALL markets can be irrational.  Bitcoin/Crypto won't be any different in that respect - but that doesn't mean to say that there isn't something tangible at the heart of it.  Just as there was something tangible at the heart of the technology that led to the dot com boom.  I've stepped out of this market on a number of occasions to account for what I perceived to be over-exuberance.  I expect to do so another few times as this progresses.



Firefly said:


> You are the one claiming someone can buy you pints with Bitcoin, not me!


I made a simple statement - not this bigged up 'claim' that you speak of.  As you were already told, it's a mut point as his Dukeness hasn't taken me up on the offer in any event.



Firefly said:


> So if it's this easy and simple, shouldn't you let us know????


Let me be very clear on this Firefly - now more than ever - the answer is NO!



Firefly said:


> I'm just asking you a simple question that's all....you're saying someone could buy you pints with Bitcoin and I'm just asking how......


How?  Here's an example of a Bitcoin Lightning payment.


----------



## Brendan Burgess

Fella said:


> how can Brendan be so sure all these people that are delusional buying Bitcoin are going to stop and let it go to zero? How can you predict the behaviour of delusional people surely if they are delusional today they will be delusional tomorrow and the next day?



Very good question.   They have been delusional for two or three years now, so why might they not be delusional forever? 

I think that things eventually revert to their fundamental value. So the stock market can be overvalued or undervalued for years.  

It is a mystery though what is keeping this bag of hot air up so high.

Brendan


----------



## Brendan Burgess

tecate said:


> . I asked you for once to consider Bitcoin against the universally accepted characteristics of a good store of value (as per the chart in my post above). You won't do that. You won't acknowledge any facet or characteristic of Bitcoin in this context and that to me lacks credibility.



Hi tecate

You have posted that chart often and I assume that it has been answered often. 

You repeat the same points time and again and it's not possible to keep up with you.

You miss the fundamental point that there is no fundamental value to Bitcoin. If there were a fundamental value, what is it and how is it calculated. 

The hint is in the name "a store of _value". _

My toenails meet all the same criteria as Bitcoin in that chart. But they are the same as Bitcoin in that they lack any fundamental value.

Sorry, but you can't just wish away this really critical point by saying that its value is what people say it is. 

Brendan


----------



## tecate

Duke of Marmalade said:


> The fact that you have explained its volatility umpteen times actually reinforces  my distancing myself from _Fella's _opinion that btc volatility is now a thing of the past.


The data doesn't lie (check the citation in one of my posts above).  It's been proven that bitcoin volatility has already decreased over it's eleven years.  It's intuitive that as its market capitalization and adoption expands, volatility will continue to decrease.  


Fella said:


> But one thing that confuses me is how can Brendan be so sure all these people that are delusional buying Bitcoin are going to stop and let it go to zero? How can you predict the behaviour of delusional people surely if they are delusional today they will be delusional tomorrow and the next day?


What's delusional is not having the objectivity to at least acknowledge certain fundamental characteristics that Bitcoin holds in terms of store of value/unit of account.  That's ground zero for Brendan in this discussion.


----------



## Duke of Marmalade

Fella said:


> But one thing that confuses me is how can Brendan be so sure all these people that are delusional buying Bitcoin are going to stop and let it go to zero? How can you predict the behaviour of delusional people surely if they are delusional today they will be delusional tomorrow and the next day?


The _Boss _has also picked this one up.  It is to be fair not new, it is what you have been saying all along.  Your philosophy is that if it has a price then it has a value, you don't give a toss about things like intrinsic value.  It's a position I would never have the courage to adopt myself.  But I withdraw any suggestion that you are a cultist. You are sort of like someone who buys and sells religious artifacts even though you don't believe in the stuff itself.
Now _tecate _believes, for him Bitcoin is the Second Coming.


----------



## tecate

Brendan Burgess said:


> You have posted that chart often and I assume that it has been answered often.


Clearly it hasn't been 'answered' insofar as you present with nonsensical examples such as tulips, toenails and your poetry and wrongly suggest that Bitcoin is no different to them in this context.  That's ludicrous.   I've asked you on each occasion you come out with this to go through the characteristics and consider these things against it - as a store of value.  You refuse to do that because you know what the outcome is (i.e. Bitcoin is far more advanced in terms of the fundamentals necessary for a good store of value than these nonsensical things.  Furthermore, you can see from the chart how it compares with FIAT and Gold).



Brendan Burgess said:


> You repeat the same points time and again and it's not possible to keep up with you.


I'm forced to repeat those points if you simply gloss over them in making claims that are nonsensical (re. Bitcoin is no better than toenails/poetry/tulips as a store of value).



Brendan Burgess said:


> You miss the fundamental point that there is no fundamental value to Bitcoin. If there were a fundamental value, what is it and how is it calculated.


You're absolutely wrong - and the answer lies right there in front of you as per that chart.



Brendan Burgess said:


> My toenails meet all the same criteria as Bitcoin in that chart. But they are the same as Bitcoin in that they lack any fundamental value.


And you're confusing two things.  You are now referencing intrinsic value - the thing that FIAT money has none of. 
Your nonsense examples don't possess the universally accepted characteristics of a store of value (and FIAT money doesn't score all too well lest it's something that you overlooked).  That's the reality.



Brendan Burgess said:


> Sorry, but you can't just wish away this really critical point by saying that its value is what people say it is.


I'm not saying that in isolation.  I'm saying that it clearly scores well in terms of the universally accepted characteristcs of a store of value.  That's something that you continue to gloss over.


----------



## tecate

Duke of Marmalade said:


> The _Boss _has also picked this one up.  It is to be fair not new, it is what you have been saying all along.  Your philosophy is that if it has a price then it has a value,


And  a few weeks ago, you tried your best and failed to deconstruct the clear reality - which is that Bitcoin scores very well comparatively when assessed in terms of the universally accepted characteristics of a good store of value.


Duke of Marmalade said:


> you don't give a toss about things like intrinsic value.  It's a position I would never have the courage to adopt myself.


You underestimate your abilities your Dukeness - when you big up the goodness of the greatest conjob in terms of intrinsic value ever created following the dropping of the Gold Standard - FIAT money!



Duke of Marmalade said:


> Now _tecate _believes, for him Bitcoin is the Second Coming.


Ready to take the Pepsi Challenge and see who the real 'cultists' are?
- I've acknowledged that Bitcoin could conceivably go to zero (whereas yourself and Brendan won't hear of the notion that bitcoin will continue to be successful).
- I've acknowledged that Bitcoin could be usurped by another digital currency.
- I've acknowledged that ALL markets can be irrational and gotten in and out of Bitcoin on a number of occasions already on that basis.
- I'm vested in a few other digital assets that we have not discussed here.
- I've acknowledged a number of issues that Bitcoin needs to improve upon to appeal to the mass market (usability, volatility, ease of storage, etc.).
All the while, the two of you can't be objective enough to recognise one single facet of decentralised digital currencies that's positive.  That's telling as regards who is a 'cultist'.


----------



## Brendan Burgess

Duke of Marmalade said:


> But I withdraw any suggestion that you are a cultist. You are sort of like someone who buys and sells religious artifacts even though you don't believe in the stuff itself.
> Now _tecate _believes, for him Bitcoin is the Second Coming.



That is a brilliant summary. 

And I am a devout atheist. 

Brendan


----------



## Firefly

tecate said:


> Let me be very clear on this Firefly - now more than ever - the answer is NO!


It seems I might have touched a nerve, which confuses me, as it's a perfectly logical question. If I said I would build a bridge from Shannon to New York I would expect someone (as well as asking why), how I would do it....


----------



## Brendan Burgess

tecate said:


> All the while, the two of you can't be objective enough to recognise one single facet of decentralised digital currencies



OK, I will try

It's better than  a bank account if you want to hide your tracks e.g. to hide payments for extortion 
It's a really good live study for psychologists to study mass delusion 
It's an opportunity for people like me to make money from cultists 
It's a great opportunity for spread betting companies to make money from people like me who believe that they can make money from cultists 
It's a Godsend to scammers as it's easy to attract the greedy and the stupid 
It provides fantastic lively debates on askaboutmoney and other forums 
It gives a sense of belonging to the cultists 
It's a clever thought experiment


----------



## tecate

Firefly said:


> It seems I might have touched a nerve, which confuses me, as it's a perfectly logical question.


As well you know, the question is rhetorical.  And the point to it is that you want me to acknowledge that Bitcoin isn't widely accepted - which has never been contested.  However, it will be far easier for the Duke to stand me a few pints via Bitcoin since I live overseas.  I'd be left dying of thirst if he had to do it via International Wire Transfer.  And for the record, where he would be sending that Bitcoin to I frequent regularly - and as of many months, I pay my bills there in Bitcoin.


----------



## tecate

Brendan Burgess said:


> OK, I will try
> 
> It's better than  a bank account if you want to hide your tracks e.g. to hide payments for extortion
> It's a really good live study for psychologists to study mass delusion
> It's an opportunity for people like me to make money from cultists
> It's a great opportunity for spread betting companies to make money from people like me who believe that they can make money from cultists
> It's a Godsend to scammers as it's easy to attract the greedy and the stupid
> It provides fantastic lively debates on askaboutmoney and other forums
> It gives a sense of belonging to the cultists
> It's a clever thought experiment


Thanks for doing that Brendan - the objectivity just oozes out of that post.  I'll dwell on that a little - let it sink in.  Who knows - maybe the Fax Machine People have been right about everything all along.


----------



## Brendan Burgess

tecate said:


> it will be far easier for the Duke to stand me a few pints via Bitcoin since I live overseas.



What?  If you give him your email address, he can send it to you by PayPal.  

Or if you both have a Revolut card. 

I doubt that the Duke will go to the trouble of opening a Bitcoin account.  

Brendan


----------



## tecate

Brendan Burgess said:


> What?  If you give him your email address, he can send it to you by PayPal.


Paypal isn't supported in the country I'm living in.  Even if it was, his Dukeness would pay extra fees for sending to me that way  and on top of those fees, foreign exchange fees.

Revolut isn't supported in this market either.


Brendan Burgess said:


> I doubt that the Duke will go to the trouble of opening a Bitcoin account.


Well then we should drop the whole idea as that's a prerequisite of any such deal.


----------



## elacsaplau

Hi Brendan,

1. Do you believe Fidelity's findings?

https://www.msn.com/en-ie/money/markets/as-many-as-36-of-large-investors-own-crypto-assets-and-bitcoin-is-the-most-popular-fidelity-says/ar-BB15fGsw?ocid=msedgntp

2. If yes, how do you rationalise what's happening?


----------



## Brendan Burgess

elacsaplau said:


> If yes, how do you rationalise what's happening?



Hi elacs

Very difficult to explain cultish behaviour or the madness of crowds.

Well very difficult to predict anyway.

Brendan


----------



## Duke of Marmalade

Brendan Burgess said:


> That is a brilliant summary.
> 
> And I am a devout atheist.
> 
> Brendan


Actually I think it is better than a brilliant analogy.
I presume _Fella _and _tecate _accept that religious artifacts are BOHA. Yet they have had a value for cultists for over a thousand years.  I predict that these cultists will surrender in about 150 years.
I give the Bitcoin cultists 2 years and 4 months.


----------



## tecate

Duke of Marmalade said:


> Actually I think it is better than a brilliant analogy.
> I presume _Fella _and _tecate _accept that religious artifacts are BOHA. Yet they have had a value for cultists for over a thousand years.  I predict that these cultists will surrender in about 150 years.
> I give the Bitcoin cultists 2 years and 4 months.


The irony as what you describe is closer to you once you check the mirror.  Can the Fax Machine People get themselves designated as a cultist/religious group? If so, you're in business.


Brendan Burgess said:


> Very difficult to explain cultish behaviour or the madness of crowds.


I guess Fidelity - one of the World's largest asset managers - and many of their institutional investor peers need to put _'The Madness of Crowds'_ and _'Extraordinary Popular Delusions'_ on their reading lists too.  It's strange as I would have thought those guys would be up to speed with that sort of thing.. who knew?


----------



## Brendan Burgess

tecate said:


> Can the Fax Machine People get themselves designated as a cultist/religious group?



That has swung it for me. Paul Krugman got a prediction wrong in 1998, therefore we are all wrong about Bitcoin.

Makes perfect sense. I will go out and buy, buy, buy tomorrow.

Brendan


----------



## tecate

Brendan Burgess said:


> That has swung it for me. Paul Krugman got a prediction wrong in 1998, therefore we are all wrong about Bitcoin.
> 
> Makes perfect sense. I will go out and buy, buy, buy tomorrow


According to the Duke, he will only consider changing his view if some of these reverent Keynesian theorists change theirs.  These people are not infallible and the basis behind Bitcoin was formulated to address deficiencies in that Keynesian theory they believe in and its application.  They will be the last to change on that score.
Secondly this is technology meeting finance and Krugman and his ilk might know their way around Keynesian theory but what do they know of technology as it intersects with store of value and currency?

The bigger point is that we are still waiting for you to take an objective view in terms of your consideration of Bitcoin and digital currencies.  That's ground zero. You stubbornly wont acknowledge any facet of Bitcoin in terms of the recognised characteristics of a store of value. That doesn't put you on firm ground in claiming there can only be one outcome here and that the rest of us are cultists!


----------



## Fella

Bitcoin started 11 years ago , if it was going to go to zero I would be betting on it happenning in the early years. 
Do you really see Bitcoin going to zero? 
You can call it a BOHA and a cult and maybe your right but can it go to zero? I just can't see it at all , its growing in popularity and I can just see it becoming more mainstream. People have accepted now it has a value (regardless of how worthless it is) why would the world suddenly decide its worth nothing? 
I think its more irrational to expect something to change dramatically than to expect it to remain the same.


----------



## Brendan Burgess

tecate said:


> You stubbornly wont acknowledge any facet of Bitcoin in terms of the recognised characteristics of a store of value.



I don't know how often I have answered this.    There is no fundamental value in Bitcoin.  It may have the same number of features as my toe nails but that does not give it any value.

I have already pointed out that just because people were prepared to pay astronomical sums for a tulip did not give that tulip any value. The whole argument that because thousands or millions of people are prepared to pay $10,000 for somethng, therefore it has value, is nonsense. 

Brendan


----------



## tecate

Brendan Burgess said:


> I don't know how often I have answered this.


You have not once answered as regards consideration of Bitcoin vs. FIAT and these nonsensical examples you try and suggest Bitcoin is equal to - and compared them on the basis of the characteristics of a store of value.  That is the following;

- Durability
- Fungability
- Portability
- Verifiability
- Divisibility
- Scarcity
- Established History
- Censorship Resistance.


----------



## Brendan Burgess

As I have pointed out my toenails have all those characteristics, yet they are not a store of value, because they lack any fundamental value. 

Most of those characteristics are necessary, but they are not sufficient. 

Bitcoin lacks the main characteristic - it has to have some fundamental value in the first place. 

Brendan


----------



## Brendan Burgess

It's like saying that a good comedy should be


short
punchy
well delivered
clear
easy to understand
But those characteristics are not enough. It actually has to be funny.

You are looking at something which walks and swims so you are concluding that it is a duck.  But in fact, it lacks the inherent quality of "duckness" as it's a human swimming.


Brendan


----------



## Duke of Marmalade

Fella said:


> People have accepted now it has a value (regardless of how worthless it is)


I see hope of a reconciliation here.
The _Boss_ argues that btc has no value because it is BOHA
_Fella_ argues it has value because people pay for it
_tecate_ argues it has value because it is a technology
All three premises are correct so the problem is with the word “value”
Can I suggest that we all agree with _Fella_ that btc is “worthless”


----------



## Duke of Marmalade

I must say _Boss_ you are winning this one, and I am being totally objective in saying that.  Love how your toenails satisfy all of _tecate’s _tests. (I’ll give them the benefit of the doubt on fungibility).


----------



## Brendan Burgess

Duke of Marmalade said:


> I’ll give them the benefit of the doubt on fungibility



I was going to post a picture of my big toe, but it's not nice!


----------



## Fella

Duke of Marmalade said:


> I must say _Boss_ you are winning this one, and I am being totally objective in saying that.  Love how your toenails satisfy all of _tecate’s _tests.



Nobody's buying his toenails though.

In a court of law I'd be right in saying Bitcoin has value , on pure facts anything you can sell on an open market for 8000 has value there is no way to argue otherwise it might be based on nothing but it has a value.


----------



## Duke of Marmalade

Fella said:


> Nobody's buying his toenails though.
> 
> In a court of law I'd be right in saying Bitcoin has value , on pure facts anything you can sell on an open market for 8000 has value there is no way to argue otherwise it might be based on nothing but it has a value.


You’re probably right, the learned judge might agree that it has value.  But he might also agree with you that it might be worthless and we could all put these semantic gymnastics to rest.


----------



## Fella

Duke of Marmalade said:


> You’re probably right, the learned judge might agree that it has value.  But he might also agree with you that it is worthless and we could all put these semantic gymnastics to rest.



Thanks , now I value my time so will look back at this worthless thread in a few years could be an interesting read.


----------



## Brendan Burgess

Fella said:


> o will look back at this worthless thread in a few years could be an interesting read



Agree.

It would be great to be able to go back and look at what the buyers of tulips said during tulipmania. 

You can see some of it in the dot.com bubble. 

Or the Women Empowering Women scam





__





						What was the name of the pyramid scheme involving gifts a few years ago?
					

I have been trying to find the reports of this scheme.  People would meet in each other's houses and give a gift. Then they would be entitled to receive gifts.   IIRC, it was primarily targeted at women and used language about "empowering women to create their own wealth."   It burst when a...



					www.askaboutmoney.com
				




Those involved are completely blind to the reality and no amount of reasoning will shift them. 

Brendan


----------



## Duke of Marmalade

Fella on Monday said:
			
		

> This thread has been great reading , thanks to @tecate for his explanations and @Duke of Marmalade who extracted the information by strict questioning.





			
				Fella on Wednesday said:
			
		

> Thanks , now I value my time so will look back at this worthless thread in a few years could be an interesting read.


----------



## Fella

It's hard to post sense in the thread when any alternative opinion is beaten down by talk of bags of hot air and toenails. 

Why should anyone waste there time? 
The internet is a great place to extract discussion and over the years I've learned loads enough that I could utilise and put to work so that I could effectively retire in my 30's. I never went to college , my education was poor and most of stuff I've learned is  from internet and meeting and questioning things and angles. Not all have worked out . But I try not to get into rabbit holes and actually get to work making profit .
I had no interest in Bitcoin but during covid break decided to read as much as I can about it , this thread has been great reading your questions which are more intelligent than questions I could put to tecate and reading the answers has helped my understanding immensely. 
I then bought my first Bitcoin and started slowly opening exchange accounts. I contacted an ex gambling friend of mine who told me there's a few loopholes you can exploit starting off if you look at the exchange offers. I've been doing that and make some small profits but it's I've only invested small . There is also arbitrage between exchanges which may or may not be a runner for me long term .

But there's only so much bandwidth my mind has if I'm having a debate about Bitcoin been worthless it's using resources I could he using elsewhere. There is always opportunity for arbitrage and advantage that I could be exploiting .
My original post wanted to thank you and tecate for your detailed postings. 
My last post was referring to this thread just becoming a bit silly . 
I've no interest in who posts what and getting one up or been funny my sole goal is to learn as much as possible and turn knowledge to a skill and maybe profit . I haven't time to work out the true value of gold Bitcoin or toenails I use exchanges if available as it saves bandwidth and EMH will generally be right enough that I just need to worry about finding value above the market.

Thanks


----------



## Leo

tecate said:


> So you're leaving that open to cryptos that pursue entirely different use cases? If not, and it's the shortlist of cryptos in the same category as Bitcoin, which would you suggest and why? Don't get me wrong - I'm quite happy to accept that Bitcoin is not a done deal - but I'm curious to know as it stands today what you would suggest as being superior technologically and in terms of network effect to usurp it.



I haven't looked into the specs of others as deeply as I have Bitcoin, there simply isn't enough time in the day. I was curious why Fella had chosen bitcoin and what the decision making process was there. I'm still of the opinion that holding cryptos (of any variety) is far too risky, but especially so for anyone not technically savvy enough to secure it effectively.


----------



## DublinHead54

Bitcoin is an evolutionary piece of technology, much like the recognized currency we use today which has evolved through time.

The debate on 'value' is a never-ending circle, simply if people are willing to pay $10,000 then it is worth $10,000, maybe in 30 years that might be $1, or $0 or it maybe $50,000. The same logic can be applied to a 10 euro note, it is just worth 10 euros because the central bank says so and the collective people believe that. A loss of confidence can lead to a currency becoming worthless, see Venezuela hyperinflation.

I think we should not lose sight that the technology is playing an important role in the development of financial markets, simply search blockchain settlement, Central Bank Digital Currencies. You will find that nearly every central bank is researching some form of Digital Currency. It is in the early stages but it has the potential to radically change the banking model from a consumer perspective. I think on the consumer-focused forum we should be discussing those topics.

Bitcoin as a currency does not have mass appeal, it is kind of like if I had Turkish lira in my pocket, I would find it hard to spend it in a shop in Dublin, much like Bitcoin.

Alas, my view is that Bitcoin will not grow further in usage from today. However, the impact of Bitcoin will have a lasting impact on infrastructure and financial markets in the years to come. These changes may not be seen visibly by consumers and will leave many to jest the failing of bitcoin, but in reality, they won't see the fundamental change and innovation it has created.

It would be incredibly useful if the key posts from this topic could be made into a sticky, to educate people on Bitcoin / Blockchain. I have critiqued Bitcoin / Blockchain in a professional environment and consider myself quite knowledgable and neutral on the topic. This post has been very difficult to follow and would be challenging for people trying to get an understanding.


----------



## Duke of Marmalade

Fella I have found your betting posts fascinating.  You obviously have an interesting life story.  Rather opposite my own.  I was a college boy and by the time I was 40 my Net Worth was still negative 
I think the _Boss' _toenail metaphor is legitimate satire. _tecate's _tests are in fact a bastardisation of tests set by the Federal Reserve, though it pointedly omits one which is "credibility".  A "currency" which has swung between 4,000 and 13,000 in the last 52 weeks simply ain't credible.  _tecate _argues that it is because it is still only a precocious teenager.
But the main and fundamental flaw is that it has no intrinsic backing.  Satoshi recognised that fatal weakness but was so enthralled by his creation that s/he came up with a contorted if ingenious way out - it will gain "value" if people think it has value.  _tecate _argues that this it no different from FIAT in that respect.  I tried to explain where he was wrong there, that FIAT is backed by real debts from economic agents in society.  He dismissed my explanation as long winded.  He likes to chose the terms under which he will compete, hence his bogus 7 tests.


----------



## Duke of Marmalade

Dublinbay12 said:


> The debate on 'value' is a never-ending circle, simply if people are willing to pay $10,000 then it is worth $10,000, maybe in 30 years that might be $1, or $0 or it maybe $50,000. The same logic can be applied to a 10 euro note, it is just worth 10 euros because the central bank says so and the collective people believe that. A loss of confidence can lead to a currency becoming worthless, see Venezuela hyperinflation.


That bitcoin has survived at all has been because of this gross oversimplification that FIAT has no backing either.
A modern FIAT currency is a very sophisticated beast much like everything in our everyday lives - there is a lot of sophistication behind the daily appearance of that litre of milk on our shop shelves.
People do like intrinsic backing for their currency, hence the Gold Standard.  But the GS had become hopelessly unfit for the purpose of acting as a unit of exchange.  World trade and economic activity must be a huge multiple of what it was 100 years ago.  If this explosion in economic activity had to be backed by available gold supply the result would have been hugely deflationary.  I am not an economist but I understand that such enormous deflationary pressure would have put a severe brake on economic development.
Debt backed FIAT was a real breakthrough in human economic development.  But it certainly cannot be left to its own devices no more than can the food supply chain.  Central Banks are charged with maintaining an acceptable price level.  This level of backing and control is anathema to Bitcoin cultists.  Fair enough, but my main point is that it is an error to think that the value of FIAT is at the same whims of human sentiment as Bitcoin.


----------



## Sunny

elacsaplau said:


> Hi Brendan,
> 
> 1. Do you believe Fidelity's findings?
> 
> https://www.msn.com/en-ie/money/markets/as-many-as-36-of-large-investors-own-crypto-assets-and-bitcoin-is-the-most-popular-fidelity-says/ar-BB15fGsw?ocid=msedgntp
> 
> 2. If yes, how do you rationalise what's happening?



Shocking finding. Asset manager who just launches Digital Asset Custody business announces survey results to show that digital assets are gaining in popularity.

Yet they won't give a press release showing how much digital assets they have in custody despite this surge in interest and they also won't offer the same amazing opportunities to retail brokerage clients that they offer institutional investors. So Fidelity are basically saying Bitcoin is great but not for the man on the street. Hardly a ringing endorsement for digital currencies that apparently we are all going to be using....


----------



## DublinHead54

Duke of Marmalade said:


> That bitcoin has survived at all has been because of this gross oversimplification that FIAT has no backing either.
> A modern FIAT currency is a very sophisticated beast much like everything in our everyday lives - there is a lot of sophistication behind the daily appearance of that litre of milk on our shop shelves.
> People do like intrinsic backing for their currency, hence the Gold Standard.  But the GS had become hopelessly unfit for the purpose of acting as a unit of exchange.  World trade and economic activity must be a huge multiple of what it was 100 years ago.  If this explosion in economic activity had to be backed by available gold supply the result would have been hugely deflationary.  I am not an economist but I understand that such enormous deflationary pressure would have put a severe brake on economic development.
> Debt backed FIAT was a real breakthrough in human economic development.  But it certainly cannot be left to its own devices no more than can the food supply chain.  Central Banks are charged with maintaining an acceptable price level.  This level of backing and control is anathema to Bitcoin cultists.  Fair enough, but my main point is that it is an error to think that the value of FIAT is at the same whims of human sentiment as Bitcoin.



Whilst a fiat system is complicated, it can be distilled into simple fundamentals of which there remains evidence of fiat currency suffering hyperinflation. In the post-Bretton-Woods environment monetary policy is a delicate balance of tinkering, and we have seen the monetary policy tools such as QE weaken in the last 20 years. Your point alludes to the evolution of the monetary system much like mine, so why not give Bitcoin the same opportunity? 

When we live in an environment of the ECB printing money to buy back debts from the real economy there are valid questions on stability. So whilst the monetary system of FIAT is much more complex it does not make the premise different, we all trust the central bank and if that was impacted so would the currency i.e. Venezuela. 

I am neutral but reading this thread, I have yet to see an argument presented as to why Bitcoin has no value, perhaps there is too much focus on the wit of the responses than the credibility.


----------



## Duke of Marmalade

Dublinbay12 said:


> ...we all trust the central bank and if that was impacted so would the currency...


Absolutely,  we trust the central bank.  In an open democracy we are also able to assess how justifiable that trust is.  And yes I see risks, but not of the Venezuelan kind at least not whilst we have the looney left kept in their box.
As I understand the bitcoin cult (I am not trying to be offensive here, not all btc holders are cultists but it is the cult that fascinates me) the main attraction is that you don't have to trust anyone - trust the algorithm.  I don't now they rationalise that not so long ago btc was priced at $1 whilst today it is priced at $10,000 when the only thing that has changed is that there are now more of them.


----------



## DublinHead54

Duke of Marmalade said:


> Absolutely,  we trust the central bank.  In an open democracy we are also able to assess how justifiable that trust is.  And yes I see risks, but not of the Venezuelan kind at least not whilst we have the looney left kept in their box.
> As I understand the bitcoin cult (I am not trying to be offensive here, not all btc holders are cultists but it is the cult that fascinates me) the main attraction is that you don't have to trust anyone - trust the algorithm.  I don't now they rationalise that not so long ago btc was priced at $1 whilst today it is priced at $10,000 when the only thing that has changed is that there are now more of them.



The likelihood and the premise or independent, the premise stands valid but the likelihood of a loss of confidence in the Euro remains small although perhaps slightly higher than normal recently. The news that the ECB is creating a Bad bank needs to be absorbed and thought about in terms of the overall market. 

I am not a cultist, I am just voraciously curious person so I try to educate myself on relevant topics. My understanding is the roots of Bitcoin lies in the cyberpunk / cyhper punk (?) community, a relative niche community. I figure that has largely broadened today, and my understanding is that transactions can be traced via a public chain and whilst you can trust the algorithm it is the other parts of interaction around it that are susceptible to compromise.


----------



## tecate

Brendan Burgess said:


> As I have pointed out my toenails have all those characteristics, yet they are not a store of value, because they lack any fundamental value.
> Most of those characteristics are necessary, but they are not sufficient.
> Bitcoin lacks the main characteristic - it has to have some fundamental value in the first place.
> You are looking at something which walks and swims so you are concluding that it is a duck.  But in fact, it lacks the inherent quality of "duckness" as it's a human swimming.


Ducks, toe nails, poetry, tulips, hot air and hypocrisy, Brendan.
If you were less disingenuous, you would accept that those characteristics - which are used universally be it by the boffins in the Federal Reserve or elsewhere - are key in determining what makes a decent store of value.  You would accept that Bitcoin scores very well against those characteristics but you're ducking and diving every which way NOT to say one objectively positive thing about a digital decentralised currency that was incredibly well thought out.  You do it a disservice by trying to suggest its equal to these nonsensical things that you mention (which you also know don't rate against those characteristics).
On to the intrinsic  value argument....
This is where the hypocrisy comes in.  You summarily dismiss Bitcoin on the basis that it lacks intrinsic value yet for all of your days, you've been supportive of a currency (and terrible store of value) that has zero intrinsic value - the €uro  (and the dollar and all other FIAT currencies).
How do you square that?  You'll say that its backed by the government.  In real terms, what does that even mean?  What does it mean to the people of <insert long list of a gazillion countries that have mismanaged their sovereign currencies>?  What does it mean to citizens of all the other countries where their central banks/governments have made mistakes in tinkering with monetary policy that have cost them dearly?
How Bitcoin Offsets Intrinsic Value
And it is right here in the weakness of FIAT currency that Bitcoin is offsetting that intrinsic value requirement in spades.  You don't get this - but one by one, millions do so.  It's the fact that people trust in it because it works within completely trustless parameters.  There is no tinkering - it's all set out and pre-programmed.  Nobody will be printing off more of it.  Nobody will be tinkering with it.  Nobody will be left wondering what some unelected unknown officials will do in setting its interest rate - as all stakeholders already know.  There's no mystery - the rules of the game are totally transparent.  This built in assumed lack of trust is where people are finding value in Bitcoin.  They're also being led towards this realisation due to sustained mismanagement of FIAT money and an ever growing distrust of those that manage sovereign currencies.



Brendan Burgess said:


> It would be great to be able to go back and look at what the buyers of tulips said during tulipmania.


Once again, tulips don't even come into consideration here in the Bitcoin context.  You can make the intrinsic value argument but Tulipmania is not worthy of consideration in the same context as Bitcoin as tulips score an F in consideration of practically every characteristic of what makes a decent store of value.  Bitcoin doesn't.


Brendan Burgess said:


> You can see some of it in the dot.com bubble.


You're right to cite over exuberance in the dot com era but you'd do well to acknowledge the incredible innovation and $$$ value add that emerged from it with the FAANGS worth a combined $5 trillion.



Brendan Burgess said:


> Those involved are completely blind to the reality and no amount of reasoning will shift them.


And I'd argue that your own views are pretty hard set and betray a certain lack of understanding.


Fella said:


> It's hard to post sense in the thread when any alternative opinion is beaten down by talk of bags of hot air and toenails.


I maintain that such comparison is at best ill fitting and at worst disingenuous and/or betrays a lack of understanding.



Leo said:


> I'm still of the opinion that holding cryptos (of any variety) is far too risky, but especially so for anyone not technically savvy enough to secure it effectively.


I agree insofar as anyone that decides to store it needs to own that and take personal responsibility for that.  It's entirely do-able (as I'm not technical myself and even I can manage it) but it's certainly not at mass market comfort levels.  That's something I'm confident will change.  The multi-sig and timelock features of Bitcoin will be used to create user friendly solutions for Bitcoin storage.  People are already working on that.


Dublinbay12 said:


> Bitcoin is an evolutionary piece of technology, much like the recognized currency we use today which has evolved through time.
> I think we should not lose sight that the technology is playing an important role in the development of financial markets, simply search blockchain settlement, Central Bank Digital Currencies. You will find that nearly every central bank is researching some form of Digital Currency. It is in the early stages but it has the potential to radically change the banking model from a consumer perspective. I think on the consumer-focused forum we should be discussing those topics.
> The impact of Bitcoin will have a lasting impact on infrastructure and financial markets in the years to come. These changes may not be seen visibly by consumers and will leave many to jest the failing of bitcoin, but in reality, they won't see the fundamental change and innovation it has created.


Thank you for at least acknowledging this.  I'd hope that whatever anyone here believes on $$ value of Bitcoin, we could at least ground the conversation on this basis.  Bitcoin is not BOHA, tulips, toe nails, poetry or any other such nonsense.  There is something tangible there regardless of where you think it goes from here in terms of usage and $$ value.



Dublinbay12 said:


> It would be incredibly useful if the key posts from this topic could be made into a sticky, to educate people on Bitcoin / Blockchain. I have critiqued Bitcoin / Blockchain in a professional environment and consider myself quite knowledgable and neutral on the topic. This post has been very difficult to follow and would be challenging for people trying to get an understanding.


Agree completely.



Dublinbay12 said:


> Alas, my view is that Bitcoin will not grow further in usage from today.


This remains to be seen as it depends on so many factors.  The technology is incomplete and it depends to what extent technologists/innovators can overcome problems as to whether there is any level of mass market adoption.  However, as it stands today, it is in the process of establishing itself as digital gold or a store of value in its own right.  I'm not entirely sure of your thinking on this but just bear in mind that there will always be a place for at least one truly decentralised digital currency.



Duke of Marmalade said:


> _tecate's _tests are in fact a bastardisation of tests set by the Federal Reserve, though it pointedly omits one which is "credibility".  A "currency" which has swung between 4,000 and 13,000 in the last 52 weeks simply ain't credible.  _tecate _argues that it is because it is still only a precocious teenager.


The very same set of characteristics have been used by the Fed and others to assess what makes for a decent store of value, yes.  As regards volatility, I'm not sure how this isn't intuitive to you - and how, as market capitalisation expands and adoption grows, volatility dissipates.  Data has been cited that demonstrates that the process of ever decreasing volatility is already underway for Bitcoin.  When it comes to use as a medium of exchange/every day currency, volatility is problematic.  However, it's a case of stepping stones. In it's first found use case - as digital gold and a store of value, volatility doesn't make a blind bit of difference unless the market participant has the lowest of time preferences.  Otherwise, Bitcoin has evened out to be the best performing asset of the past decade, of 2019 and thus far in 2020.
It seems that you are not prepared to accept that this can be resolved over time but to my mind, that's an error.



Duke of Marmalade said:


> But the main and fundamental flaw is that it has no intrinsic backing.  Satoshi recognised that fatal weakness but was so enthralled by his creation that s/he came up with a contorted if ingenious way out - it will gain "value" if people think it has value.  _tecate _argues that this it no different from FIAT in that respect.  I tried to explain where he was wrong there, that FIAT is backed by real debts from economic agents in society.  He dismissed my explanation as long winded.  He likes to chose the terms under which he will compete, hence his bogus 7 tests.


  See the paragraph under 'How Bitcoin Offsets Intrinsic Value' at the beginning of this post.  It's not just a case of people affixing value to it.  You need to get to the 'why' and the 'why' is that one by one, people are coming to question whether they can trust FIAT money.  With that they're opening up to the prospect of being able to trust in Bitcoin due to its assumed, pre-programmed and untamperable trustlessness.



Duke of Marmalade said:


> People do like intrinsic backing for their currency, hence the Gold Standard.  But the GS had become hopelessly unfit for the purpose of acting as a unit of exchange.  World trade and economic activity must be a huge multiple of what it was 100 years ago.  If this explosion in economic activity had to be backed by available gold supply the result would have been hugely deflationary.  I am not an economist but I understand that such enormous deflationary pressure would have put a severe brake on economic development.
> Debt backed FIAT was a real breakthrough in human economic development.  But it certainly cannot be left to its own devices no more than can the food supply chain.  Central Banks are charged with maintaining an acceptable price level.  This level of backing and control is anathema to Bitcoin cultists.  Fair enough, but my main point is that it is an error to think that the value of FIAT is at the same whims of human sentiment as Bitcoin.


You can say that FIAT money lacks intrinsic value yet is more sophisticated.  However, it boils down to the same thing.  That sophistication does nothing for people that end up on the wrong end of such currencies when they go very wrong.  And all ordinary people end up on the wrong end of it - whether its through blatant mismanagement or the ongoing erosion of their wealth through inflation.
On the need to avoid deflation at all costs, I'm not an economist either but many are questioning this more and more.  With that debt backed FIAT approach came exactly that - debt.  Is that what society needs - everyone up to their tonsils in debt?  That there won't be functioning economies and stable societies with a deflationary monetary system is not a foregone conclusion from what I can see.



Sunny said:


> Shocking finding. Asset manager who just launches Digital Asset Custody business announces survey results to show that digital assets are gaining in popularity.
> 
> Yet they won't give a press release showing how much digital assets they have in custody despite this surge in interest and they also won't offer the same amazing opportunities to retail brokerage clients that they offer institutional investors. So Fidelity are basically saying Bitcoin is great but not for the man on the street. Hardly a ringing endorsement for digital currencies that apparently we are all going to be using....


I'm not sure where you're going with this.  Are you saying that there is no uptick in institutional interest in digital assets - because there have been plenty of other indicators that there has been more recently.  As regards them catering to a particular sector of the market, what of it?  I don't see your point.  Fidelity don't cater to the man on the street.  The man on the street has other options if he/she wants to gain exposure to digital assets.  Here's one that's just been introduced - Deutsche Borse lists Bitcoin ETP.


----------



## Brendan Burgess

tecate said:


> This is where the hypocrisy comes in. You summarily dismiss Bitcoin on the basis that it lacks intrinsic value yet for all of your days, you've been supportive of a currency (and terrible store of value) that has zero intrinsic value - the €uro (and the dollar and all other FIAT currencies).



Hi tecate

I haven't commented much on fiat currencies.   You have had that dispute mainly with the Duke. 

I must say that I am nervous about the value of currencies given the QE.  But the solution is not to move my money from euro into a bag of hot air.

I don't think I am hypocritical on the issue of Bitcoin.  Often in discussing a topic, one can have two mutually exclusive opinions and then you try to resolve them. That is not hypocrisy.  

Hypocrisy would be if I were talking about how worthless Bitcoin was while simultaneously building up a big holding of it. 

Brendan


----------



## Brendan Burgess

tecate said:


> tulips don't even come into consideration here in the Bitcoin context.



You can't just dismiss the arguments you don't like. 

There was a mania which caused people to pay massive amounts of money for something which was worth very little.  

Bitcoin is a mania where people are paying huge amounts of money for something which is worth nothing. 

Clearly you are part of this mania, so you can't see it as a mania.  That is why I think you should read the Madness of Crowds. You will laugh at the stupidity of these clever people and then you might go "Oh, oh..." 

Brendan


----------



## tecate

Brendan Burgess said:


> I haven't commented much on fiat currencies.


Exactly my point.  You won't look past intrinsic value and you won't acknowledge my rationale as to how Bitcoin offsets intrinsic value yet for all of your life you've been using and continue to use a currency that has no intrinsic value.  You can't just dismiss the arguments you don't like.  I say again - it's hypocritical.



Brendan Burgess said:


> I don't think I am hypocritical on the issue of Bitcoin.  Often in discussing a topic, one can have two mutually exclusive opinions and then you try to resolve them. That is not hypocrisy.


 Hypocrisy is where you completely slate one store of value/currency on the basis of it lacking intrinsic value whilst all the while using another currency that has no intrinsic value.  It's due an explanation.



Brendan Burgess said:


> Hypocrisy would be if I were talking about how worthless Bitcoin was while simultaneously building up a big holding of it.


Goldman Sachs have gotten there before you on that one.



Brendan Burgess said:


> You can't just dismiss the arguments you don't like.


Absolutely - and that's why I'm calling you out on it.



Brendan Burgess said:


> There was a mania which caused people to pay massive amounts of money for something which was worth very little.


So there's over exuberance in markets be it the Celtic Tiger Property Market, the dot com boom, Bitcoin or the bonkers equities markets right now that go up in the face of every economic indicator suggesting that they should be going the other way.  There was over exuberance in 2017/8 and that's why I exited the market temporarily at that point.



Brendan Burgess said:


> Bitcoin is a mania where people are paying huge amounts of money for something which is worth nothing.


We're eleven years on since the Bitcoin network went live.  We're a couple of years on since the hype peaked.  There's little in the way of 'mania' right now. 
As regards price, price is a function of supply and demand.  Within that, the universally accepted characteristics of what makes a decent store of value play a part - particularly but in no way exclusively, scarcity.  The building out of the digital assets eco-system plays a part.  The growing credibility and acceptance of Bitcoin as a store of value plays a part.  Adoption is also meaningful in the context of the iterative Bitcoin price discovery process.



Brendan Burgess said:


> Clearly you are part of this mania, so you can't see it as a mania.  That is why I think you should read the Madness of Crowds. You will laugh at the stupidity of these clever people and then you might go "Oh, oh..."


As I've mentioned, I've read a couple of books on the psychology of markets.  As I have been doing, I will get in and out of the market if I sense that there's an irrationality about the market.  That's not to be found right now. 

And something that you yourself will have to get over at some stage.  You need to get up to speed with what decentralised digital currencies actually are and the value they bring to the table.  You can suggest that they're mispriced.  But to continue with these nonsensical comparisons that you persist with and not acknowledge the difference is entirely inaccurate and misleading to anyone reading this thread and trying to form an opinion on Bitcoin.


----------



## Duke of Marmalade

tecate said:


> With that debt backed FIAT approach came exactly that - debt.  Is that what society needs - everyone up to their tonsils in debt?


And you accuse me of being offensive in calling it a "cult".  A world without government.  A world without banks. A world without debt.  Debt is an essential part of the human economic condition.  People accumulate assets during their economic lives to support them in retirement.  This is in large part facilitated through the financial system by the older asset rich generation lending to the income rich younger generation.
Maybe there is a niche for a cult to indulge in a government free, bank free, debt free, interest rate free utopia.
But the real world will stick to the modern structures of our civilisation, including a well regulated fiat currency, which have been developed over centuries.


----------



## tecate

Duke of Marmalade said:


> And you accuse me of being offensive in calling it a "cult".


Of course I did and I do.  There is no-one that has participated in this discussion on AAM and is open minded in their consideration of Bitcoin and decentralised currencies (evidently that excludes yourself and Brendan) that considers themselves part of a 'cult' on account of that.



Duke of Marmalade said:


> A world without government.


WHERE did I ever suggest that we should have a world without government?  Where?



Duke of Marmalade said:


> A world without banks.


WHERE did I ever suggest that we should have a world without banks?  Where? 
I may in past discussion have said that having the ability to store and transact value without an intermediary is my preference.  I didn't say that we will have or that we have to have a world without banks.



Duke of Marmalade said:


> A world without debt.


WHERE did I ever suggest that we should have a world without debt?  Where?
I said that 'a world up to its tonsils in debt' is not good for society.  I was referring to staggering levels of per capita (and national level) debt that western societies have reached.  You believe that such runaway debt levels are good for society? - you're on your own on that one.



Duke of Marmalade said:


> People accumulate assets during their economic lives to support them in retirement.


And the same can be achieved via reinstatement of a savings culture.



Duke of Marmalade said:


> This is in large part facilitated through the financial system by the older asset rich generation lending to the income rich younger generation.


Whilst also overburdening them with sovereign debt and encouraging them to over-extend themselves on personal debt. 



Duke of Marmalade said:


> Maybe there is a niche for a cult to indulge in a government free, bank free, debt free, interest rate free utopia.


Dear God!  Resistant to change much, your Dukeness? Book recommendations have been a thing on this thread so let me make one for you. 



Duke of Marmalade said:


> But the real world will stick to the modern structures of our civilisation, including a well regulated fiat currency, which have been developed over centuries.


@Dublinbay12 made a suggestion to you with regard to monetary system evolution and development which is entirely relevant to this statement of yours:


			
				Dublinbay12 said:
			
		

> Your point alludes to the evolution of the monetary system much like mine, so why not give Bitcoin the same opportunity?


If on the one hand you accept the development of monetary systems over centuries, perhaps you might also consider being open to that ongoing development as per his suggestion above.  Just a thought your Dukeness.


----------



## Duke of Marmalade

_tecate _you have an annoying habit of picking  literally on points which are obviously rhetorical.  For total accuracy let me describe the cult as anti government, anti bank and anti debt, or for total total accuracy more anti/anti/anti than the rest of us.  Others will recognise what I mean so please don't prolong the semantic debate on this point.


----------



## tecate

Duke of Marmalade said:


> Others will recognise what I mean so please don't prolong the semantic debate on this point.


And that's exactly why I will take you to task on it - because it's a misrepresentation.  Bitcoin is not a 'cult'.  I don't belong to any 'cults'.  How am I 'anti' everything?  I believe in iterative progression.  Nothing stands still (although some stand in the way!).  You refer to the ongoing development of monetary systems - and that's where my interest lies.
You might want to frame it in a certain way as you disagree with my opinion but this 'cult' nonsense is not helpful to the thread.  I'd suggest you drop it  (but don't think for a second that I won't be correcting you on it if you're going to carry on with that misrepresentation).


----------



## Brendan Burgess

Hi tecate

There is also a reference to the cult of the equity  which is the blind belief in the equity markets.

I am not suggesting that you are worshipping any guru or engaging in arcane spiritual practices.

But you have adopted an irrational belief that a bag of hot air is worth something.  I am not sure whether you believe it is worth $1 , $10,000 or $100,000.  But anything over $1  is a cult. It's an irrational devotion to something with no substance.

Brendan


----------



## tecate

Brendan,

There's no justification for the use of that type of negative word association.  It's unhelpful to anyone trying to follow this thread and it's entirely inaccurate.  The same as your 'hot air' / 'toe nail' / 'poetry' / 'tulip' references are totally inappropriate and inaccurate in the context of consideration of a store of value such as Bitcoin (which possesses all of the characteristics of a good store of value unlike these nonsensical things you try and liken it to).



Brendan Burgess said:


> There is also a reference to the cult of the equity  which is the blind belief in the equity markets. I am not suggesting that you are worshipping any guru or engaging in arcane spiritual practices.
> But you have adopted an irrational belief that a bag of hot air is worth something.  I am not sure whether you believe it is worth $1 , $10,000 or $100,000.  But anything over $1  is a cult. It's an irrational devotion to something with no substance.



If we must go round in circles, then on we go.  This is my response with regard to intrinsic value ->


			
				tecate said:
			
		

> You summarily dismiss Bitcoin on the basis that it lacks intrinsic value yet for all of your days, you've been supportive of a currency (and terrible store of value) that has zero intrinsic value - the €uro (and the dollar and all other FIAT currencies).
> How do you square that? You'll say that its backed by the government. In real terms, what does that even mean? What does it mean to the people of <insert long list of a gazillion countries that have mismanaged their sovereign currencies>? What does it mean to citizens of all the other countries where their central banks/governments have made mistakes in tinkering with monetary policy that have cost them dearly?
> How Bitcoin Offsets Intrinsic Value
> And it is right here in the weakness of FIAT currency that Bitcoin is offsetting that intrinsic value requirement in spades. You don't get this - but one by one, millions do so. It's the fact that people trust in it because it works within completely trustless parameters. There is no tinkering - it's all set out and pre-programmed. Nobody will be printing off more of it. Nobody will be tinkering with it. Nobody will be left wondering what some unelected unknown officials will do in setting its interest rate - as all stakeholders already know. There's no mystery - the rules of the game are totally transparent. This built in assumed lack of trust is where people are finding value in Bitcoin. They're also being led towards this realisation due to sustained mismanagement of FIAT money and an ever growing distrust of those that manage sovereign currencies.



We're still waiting for an explanation as to how you believe one thing is worthless on solely an 'intrinsic value' basis (casting aside what's set out above in terms of Bitcoin's trustless nature) yet you won't apply the same standard to €uro, USD, etc.  I invite you to address that.

As regards your suggestion that any valuation over $1 is a travesty, you've reminded me of another aspect to all of this and that's Henry Ford's Energy Standard.  It takes a hell of a lot of energy to mine and mint Bitcoin and run the Bitcoin network.  It's the energy backed currency that Ford aspired to.


----------



## NoTomLan

This is the online version of a Rocky 15 round heavyweight slugfest, who will tire out first?!


----------



## Brendan Burgess

tecate said:


> . I invite you to address that.



Duke has explained this more than once to you and in a much more informed way than I can.

Brendan


----------



## Brendan Burgess

tecate said:


> As regards your suggestion that any valuation over $1 is a travesty



He tecate

Have you given your own valuation of Bitcoin on askaboutmoney? Is it worth $1 or $1m? How did you arrive at it.

I am sure you have answered this - you might just link me to it.

Brendan


----------



## tecate

Brendan Burgess said:


> Duke has explained this more than once to you and in a much more informed way than I can.


 If we're going by what Duke has said, then it's backed by nothing, nada, zilch.  That leaves your claim against Bitcoin as a double standard.

And in fact, now that you've reminded me, I'm rolling back on that view that Bitcoin has no intrinsic value seeing as it's an energy backed standard.


----------



## Brendan Burgess

NoTomLan said:


> who will tire out first?!



I must admit I am wilting. 

Brendan


----------



## RedOnion

tecate said:


> It's unhelpful to anyone trying to follow this thread


It's only now you're worried about that?


----------



## Cricketer

Can't you just freeze this thread, email it to us (scheduled for ten years time) and we can get on with things until all is revealed?


----------



## tecate

Brendan Burgess said:


> Have you given your own valuation of Bitcoin on askaboutmoney? Is it worth $1 or $1m? How did you arrive at it.


Well, you setup a valuation/price prediction thread.  My prediction for year end 2019 was the most accurate on AAM.  

In terms of arriving at that valuation, this is something that we both discussed last year and with that, there's some info pending from you as per this post here.


----------



## LS400

Duke of Marmalade said:


> I must say _Boss_ you are winning this one,




Hmm, dont know about that. 

Have to say, for a subject I admit to know nothing about. Im fascinated. Great arguments on both sides.


----------



## Brendan Burgess

tecate said:


> In terms of arriving at that valuation, this is something that we both discussed last year and with that, there's some info pending from you as per this post here.



I had a quick look at that thread. So it seems that you have no way at all of working out whether Bitcoin is $1, $100 or $10,000 or $1m? 

That tells us all we need to know. 

Brendan


----------



## elacsaplau

Nice one LS400,

There may indeed be a bit of confirmation bias going on!


----------



## Brendan Burgess

LS400 said:


> Hmm, dont know about that.



I agree.  No one really wins these arguments until the outcome is known. 

Tecate thinks I am irrational. 

I think he is irrational. 

It's not really possible to reach an agreement. 

Brendan


----------



## tecate

Brendan Burgess said:


> That tells us all we need to know.


Not so fast Brendan.  I believe where we left off was that you were going to tell us what calculation someone should use to determine the fair price of gold.

What is the calculation for determining the faIr price of gold?



Brendan Burgess said:


> it seems that you have no way at all of working out whether Bitcoin is $1, $100 or $10,000 or $1 million


It seems that you have no way at all of working out whether Bitcoin Gold is $1, $100 or $10,000 or $1 million.

Who knew?  .  It seems that the two scarce assets have even more in common than we ever imagined.


----------



## Fella

Brendan Burgess said:


> I agree.  No one really wins these arguments until the outcome is known.
> 
> Tecate thinks I am irrational.
> 
> I think he is irrational.
> 
> It's not really possible to reach an agreement.
> 
> Brendan



I can admire @tecate for his rational arguments. He is very well educated on Bitcoin. 
I think at very least you should either educate yourself on Bitcoin or not post more in the thread because your input is not helping anyone reading the thread.
To be honest the bag of hot air and toenails chat becomes boring after a while , only @Duke of Marmalade  who seems educated on Bitcoin but also seems to fuel your postings with "boss" your toenails analogy is funny , it's not funny it's pointless. 
Askaboutmoney should be a place to actually learn stuff about cryptocurrency not read childish posts that you and Duke are posting back and forth. If I want to read forum tit for tats I'll go to boards.ie


----------



## Duke of Marmalade

LS400 said:


> Hmm, dont know about that.
> 
> Have to say, for a subject I admit to know nothing about. Im fascinated. Great arguments on both sides.


I suppose I should drop the attempts at humour, AAM not a good medium for that.  I thought my protests of total objectivity would be a clue.  Nevertheless the _Boss _had come up with some clever little demolitions of the infallibility of _tecate's _7 tests.


----------



## Brendan Burgess

tecate said:


> What is the calculation for determining the faIr price of gold?



tecate

Do you know how completely irrational that is? 

You are saying, that not only does the value of Bitcoin depend on the price of gold but it also depends on what my view of the price of gold is. 

I have never bought gold or owned gold - maybe years ago I bought a gold cross as a present. 

I have no idea of the price of gold.  I have little interest in it. I am neither going to buy it nor short it. 

You seem unable to determine a value for Bitcoin.  

And it's clear why. It's not worth anything.  

It might be useful just as a cheque book is useful. But it's not worth anything 

Brendan


----------



## tecate

Duke of Marmalade said:


> Nevertheless the _Boss _had come up with some clever little demolitions of _tecate's _7 tests.


The seven universally recognised characteristics of a good store of value?  If you call ignoring them and not assessing the nonsensical things that Brendan likens Bitcoin to on this thread clever....


Brendan Burgess said:


> You are saying, that not only does the value of Bitcoin depend on the price of gold but it also depends on what my view of the price of gold is.


Bitcoin is an asset.  Gold is an asset.  You are suggesting that if there isn't a neat and tidy calculation (like you might use P/E ratio to try to determine the fair value of an equity stock) for Bitcoin, then the conclusion you draw is that Bitcoin has no value?
On that basis, I am asking you to let us all know  what neat little formula can be used to determine the fair price of gold.

If there isn't one, have we just stumbled upon an amazing discovery?  Is the $9 trillion gold market a complete sham?



Brendan Burgess said:


> I have no idea of the price of gold.  I have little interest in it.


The title of this very thread alludes to the development of Bitcoin as 'digital gold'.  It's entirely relevant to compare them.

Double Standards
So far you've presented with three double standards in this discussion:

1. Bitcoin has been considered in terms of seven universally accepted characteristics of what makes for a good store of value but you won't assess any of the nonsensical things that you liken Bitcoin to on the basis of those same fundamentals.
2. The core of your argument is that Bitcoin has zero intrinsic value* and on that basis alone you say that it is worth zero.  However, you don't apply the same standard to intrinsically valueless FIAT money (i.e. €uro, USD, GBP, etc.).
3. In the absence of a neat formula to determine the fair price of Bitcoin, you say that it has zero value.  Yet when I ask you to apply the same standard to gold, you tell me that's irrational.



			
				Brendan Burgess said:
			
		

> It might be useful just as a cheque book is useful. But it's not worth anything


As  useful as a cheque book?  I'd really encourage you to think about rolling back on that as it will age just about as well as Krugman's  fax machine gaffe.  Let me take that a step further - it had aged before you had written it - even outdoing Krugman!

The Bitcoin Whitepaper can be found here.  I would encourage you to read it.



_*Bitcoin does actually have intrinsic value as it's an energy standard._


----------



## Sunny

This is fast becoming another Tesla thread which I see has also raised its ugly head again. Arguing about the value of bitcoin is pointless. I reckon I am in a majority of people who simply do not understand enough about digital currency, does not trust digital currency like bitcoin and is completely indifferent to it. Just like the majority of people are also completely indifferent to the direction of other asset classes. Bitcoin could go up to 100000 or 0 and I couldn't care less. Gold could go to 100000 or 0 and I couldn't care less apart from me stealing my wife's wedding rings to melt if it does.  All people are doing is trying to make money by speculating. Good luck to you but that's all it is. Speculation. It doesn't mean bitcoin will ever be widely accepted. Doesn't mean bitcoin will be the digital asset that survives in the long term if any of them do. Bitcoin at 9000 doesnt mean bitcoin is brilliant and is going to change the world. Bitcoin at 0 doesnt mean the concept is worthless. But that it is all it is. It is just a concept that is being used in some small narrow experimental way. Depsite all the talk over years and how people are jumping on to it in ever increasing numbers, I reckon 99% of the population could not give one hoot. Good luck to the 1% who think they are on to something. You may well be right but I think I will be well dead before you get to say I told you so......


----------



## tecate

Sunny said:


> Arguing about the value of bitcoin is pointless.


I think it's a very worthwhile discussion to have - but you said that you're indifferent to it.  If that's the case, maybe just unfollow the thread?



Sunny said:


> Just like the majority of people are also completely indifferent to the direction of other asset classes.


Ok, so why would they click on a thread that is specifically about said subject?



Sunny said:


> Bitcoin could go up to 100000 or 0 and I couldn't care less. Gold could go to 100000 or 0 and I couldn't care less apart from me stealing my wife's wedding rings to melt if it does.


See above.



Sunny said:


> It doesn't mean bitcoin will ever be widely accepted.


A couple of things.  Bitcoin doesn't have to appeal to the mass market to continue to develop and establish itself as a store of value or digital gold.  As regards day to day transactional use, sure there's a speculation as to whether it will continue to develop a broader appeal in that context.  What of it? There is speculative interest in so many things but always with new technology/innovation.



Sunny said:


> Despite all the talk over years and how people are jumping on to it in ever increasing numbers, I reckon 99% of the population could not give one hoot. Good luck to the 1% who think they are on to something. You may well be right but I think I will be well dead before you get to say I told you so......


Presumably anyone that partakes in this discussion has an interest  - otherwise why would they waste anyones time in posting here.
Secondly, what major tech doesn't take years?  How long did it take to get from Arpanet to internet?  How long has AI been knocking around and why are we only seeing the results of it more recently?  Mobile tech? IoT?



Sunny said:


> Good luck to the 1% who think they are on to something. You may well be right but I think I will be well dead before you get to say I told you so......


This is the 'alternative investments' sub-forum and its being considered and discussed here in that context.  If you are bored or disinterested then why open the thread?


----------



## Firefly

Sunny said:


> This is fast becoming another Tesla thread which I see has also raised its ugly head again. Arguing about the value of bitcoin is pointless. I reckon I am in a majority of people who simply do not understand enough about digital currency, does not trust digital currency like bitcoin and is completely indifferent to it. Just like the majority of people are also completely indifferent to the direction of other asset classes. Bitcoin could go up to 100000 or 0 and I couldn't care less. Gold could go to 100000 or 0 and I couldn't care less apart from me stealing my wife's wedding rings to melt if it does.  All people are doing is trying to make money by speculating. Good luck to you but that's all it is. Speculation. It doesn't mean bitcoin will ever be widely accepted. Doesn't mean bitcoin will be the digital asset that survives in the long term if any of them do. Bitcoin at 9000 doesnt mean bitcoin is brilliant and is going to change the world. Bitcoin at 0 doesnt mean the concept is worthless. But that it is all it is. It is just a concept that is being used in some small narrow experimental way. Depsite all the talk over years and how people are jumping on to it in ever increasing numbers, I reckon 99% of the population could not give one hoot. Good luck to the 1% who think they are on to something. You may well be right but I think I will be well dead before you get to say I told you so......


That's a super post and I agree 100%

There may be some edge cases but until lots and lots of people start using Bitcoin to buy stuff I can't see how lots and lots of people will trust it as a store of value


----------



## Duke of Marmalade

tecate said:


> 1. Bitcoin has been considered in terms of seven universally accepted characteristics of what makes for a good store of value but you won't assess any of the nonsensical things that you liken Bitcoin to on the basis of those same fundamentals.


I think it was I who did the miscounting.  You actually gave 8 UACs.  However, I decided to check with the fountain of all wisdom:


			
				Wiki said:
			
		

> To fulfill its various functions, money must have certain properties:[28]
> 
> 
> Fungibility: its individual units must be capable of mutual substitution (i.e., interchangeability).
> Durability: able to withstand repeated use.
> Divisibility: divisible to small units.
> Portability: easily carried and transported.
> Cognizability: its value must be easily identified.
> Scarcity: its supply in circulation must be limited.


So there is in fact only 6.  But strangely they do not coincide with your UACs which either means Wiki has made a rare booboo or you are mistaken in the universality of your tests.  Anyway you do agree on 5 of the tests.  You decided to leave out "Cognizablity:its value must be easily identified".  Are you sure you were running a fair contest?  I doubt that anyone could describe a currency which gyrates between 4,000 and 13,000 in the previous 52 weeks as having a value that can be easily identified.  I know you have excused the laddie for sowing a few adolescent wild oats.

You included 3 more.
*Verifiable*.  What does that mean?
*Censorship Resistant*  whatever that means I wouldn't dare call it cultist.  Anyway, poor old Fiat got completely beaten up by our hero in this category.
*Established History*  this gave a consolation prize for the old guy, I presume to convince the grandstands of the overall fairness of the contest.



> As  useful as a cheque book?  I'd really encourage you to think about rolling back on that as it will age just about as well as Krugman's  fax machine gaffe.  Let me take that a step further - it had aged before you had written it - even outdoing Krugman!
> 
> The Bitcoin Whitepaper can be found here.  I would encourage you to read it.


I think you have mixed up your files a bit there.  It was the _Boss _who referenced cheque books and I don't think he deserves to be beaten up by Krugman's Fax Machine.  I have read the White Paper.  I was really excited as I turned the pages and then came the big let down.  Satoshi admits the great hole in his whole scheme.  Where is the value in a digital entry, no matter how scarce, verifiable or censorship resistant it might be?


----------



## Sunny

tecate said:


> I think it's a very worthwhile discussion to have - but you said that you're indifferent to it.  If that's the case, maybe just unfollow the thread?
> 
> Ok, so why would they click on a thread that is specifically about said subject?
> 
> See above.
> 
> 
> A couple of things.  Bitcoin doesn't have to appeal to the mass market to continue to develop and establish itself as a store of value or digital gold.  As regards day to day transnational use, sure there's a speculation as to whether it will continue to develop a broader appeal in that context.  What of it? There is speculative interest in so many things but always with new technology/innovation.
> 
> Presumably anyone that partakes in this discussion has an interest  - otherwise why would they waste anyones time in posting here.
> Secondly, what major tech doesn't take years?  How long did it take to get from Arpanet to internet?  How long has AI been knocking around and why are we only seeing the results of it more recently?  Mobile tech? IoT?
> 
> This is the 'alternative investments' sub-forum and its being considered and discussed here in that context.  If you are bored or disinterested then why open the thread?



Sorry, I didn't realise I wasn't worthy to open or comment on a thread. Excuse my ignorance. I will leave it to the experts like yourself


----------



## Brendan Burgess

tecate said:


> Double Standards
> So far you've presented with three double standards in this discussion:
> 
> 1. Bitcoin has been considered in terms of seven universally accepted characteristics of what makes for a good store of value but you won't assess any of the nonsensical things that you liken Bitcoin to on the basis of those same fundamentals.
> 2. The core of your argument is that Bitcoin has zero intrinsic value* and on that basis alone you say that it is worth zero. However, you don't apply the same standard to intrinsically valueless FIAT money (i.e. €uro, USD, GBP, etc.).
> 3. In the absence of a neat formula to determine the fair price of Bitcoin, you say that it has zero value. Yet when I ask you to apply the same standard to gold, you tell me that's irrational.



Hi tecate

I will ask you again. How do you arrive at a value of $10,000 for one bitcoin?

It's not a trick question.  It's not a hypothetical question. 

I do not know how to value gold and I have no interest or stake in its value.
I share your concerns about fiat currencies. But if they are worthless, that does not make Bitcoin valuable. Or if it does, can you explain how it's calculated?

As I say, I have no interest or knowledge in the price of gold. I am very interested in the price of Bitcoin. I am planning to short it again when I have  a bit of cash and it hits $10k. 

But if someone can show me that it has value, then I won't put my money at risk.

Brendan


----------



## tecate

Brendan Burgess said:


> I do not know how to value gold and I have no interest or stake in its value.
> As I say, I have no interest or knowledge in the price of gold. I am very interested in the price of Bitcoin. I am planning to short it again when I have  a bit of cash and it hits $10k.  But if someone can show me that it has value, then I won't put my money at risk.


Once again, you're suggesting that if there is no tidy calculation to determine fair market value for Bitcoin, that it has no value.  I'm asking you to defend your point and tell me why that contention wouldn't apply to gold (assuming that you have no tidy calculation to determine the fair market value of gold ...as I've already asked you a couple of times - last year...and now on this thread)?  Are you suggesting that the $9 trillion gold market is a sham?



Brendan Burgess said:


> I am planning to short it again when I have  a bit of cash and it hits $10k.
> But if someone can show me that it has value, then I won't put my money at risk.


Ok, well you'll need to watch the market a bit more closely as it hit $10k momentarily yesterday.  It's interesting that you're considering going short as I'm long Bitcoin right now.



Brendan Burgess said:


> I share your concerns about fiat currencies. But if they are worthless, that does not make Bitcoin valuable. Or if it does, can you explain how it's calculated?


You claim that the price of bitcoin should be zero as it has no intrinsic value.  I'm asking you if FIAT has no intrinsic value, then why are you not telling us that it is worthless?


----------



## tecate

We've been through this before your Dukeness.  This thread considers Bitcoin's use case as digital gold and a store of value in its own right.  You're quoting the characteristics of a medium of exchange and not those of a store of value.  The distinction was made to you a few weeks ago already.  You're in complete troll mode at this point.



			
				Sunny said:
			
		

> Sorry, I didn't realise I wasn't worthy to open or comment on a thread. Excuse my ignorance. I will leave it to the experts like yourself


You said that you were indifferent to the topic and that 'you couldn't care less'.  I mean, forgive my ignorance but I'm confused as to why you want to post if that's the extent of your contribution.



			
				Firefly said:
			
		

> There may be some edge cases but until lots and lots of people start using Bitcoin to buy stuff I can't see how lots and lots of people will trust it as a store of value


I disagree but I guess we will see how it plays out.  Bear in mind that 'buying stuff' is not the only Bitcoin use case.  Remittances, cross border transactions and settlement are also relevant when it comes to Bitcoin.  With Microsoft's decentralised digital identity tool, ION going live on the Bitcoin blockchain yesterday, it looks like stuff is even being built on top of the network...and yet, we're told by Brendan that there's no utility here.


----------



## Duke of Marmalade

tecate said:


> We've been through this before your Dukeness.  This thread considers Bitcoin's use case as digital gold and a store of value in its own right.  You're quoting the characteristics of a medium of exchange and not those of a store of value.  The distinction was made to you a few weeks ago already.  You're in complete troll mode at this point.


And you are in complete denial. You have trolled on and on about the *universally *accepted tests for a currency.  When I point out that they are a bastardisation by a fellow cultist of the true UACs you retort that the latter are about medium of exchange whilst the cultist UACs were addressing store of value and that my citing the true UACs is off topic.  You really mean us to accept that ducking?  What have Portable, Fungible, Divisible got to do with store of value?


----------



## tecate

Duke of Marmalade said:


> And you are in complete denial. You have trolled on and on about the *universally *accepted tests for a currency.  When I point out that they are a bastardisation by a fellow cultist of the true UACs you retort that the latter are about medium of exchange whilst the cultist UACs were addressing store of value.  You really mean us to accept that ducking.?  What have Portable, Fungible, Divisible got to do with store of value?


You are telling porkies now Dukey.  Where's your link to that info that you quote above?  You are listing the characteristics of a medium of exchange - not of a store of value.


----------



## Duke of Marmalade

tecate said:


> You are telling porkies now Dukey.  Where's your link to that info that you quote above?  You are listing the characteristics of a medium of exchange - not of a store of value.


Rather sad attempts to move the goal posts, _tecate_.  What have Fungibility, Portability and Divisibility got to do with store of value?  You have stated categorically these to be *universally *accepted tests for such a store.


----------



## tecate

Duke of Marmalade said:


> Rather sad attempts to move the goal posts, _tecate_.  What have Fungibility, Portability and Divisibility got to do with store of value?  You have stated categorically these to be *universally *accepted tests for such a store.


Disingenuous much?  I'll ask you once more.  Please post a link to the information you refer to in post #230.


----------



## Brendan Burgess

Tecate

I don't have any gold so I don't care about its value.  I have never been a fan. 
I try to minimise my holding of currencies.  And I share your concern about the risk to them due to inflation caused by printing.

Now could you please tell me why you are long on something priced at $10,000. Presumably you have done a calculation which shows you that it's worth $10,000? 

I am genuinely interested and it's not just academic. If I am missing something, I don't want to risk shorting it.

Please, tell me how you arrived at that valuation? 

Brendan


----------



## tecate

Brendan, 

The thread concerns the consideration of Bitcoin as digital gold.  It's entirely relevant.  And I will ask again - (and full disclosure - I'll keep asking until you answer) - how do you determine the fair price of gold?  If you can't, it seems according to your logic, then its price should be zero and the $9 trillion gold market is a sham.

Please clarify.


----------



## Duke of Marmalade

tecate said:


> Disingenuous much?  I'll ask you once more.  Please post a link to the information you refer to in post #230.


See Properties
Fiat as a medium of exchange is not meant to be a long term store of value.  Its guardians have openly declared their intention to try and devalue it by 2% p.a.  But monetary assets earning interest have proved not too bad as a store of value in the past.


----------



## tecate

Duke of Marmalade said:


> See Properties
> Fiat as a medium of exchange is not meant to be a long term store of value.  Its guardians have openly declared their intention to try and devalue it by 2% p.a.  But monetary assets earning interest have proved not too bad as a store of value in the past.


As was explained to you (and as you well knew from the outset), those are the characteristics of a means of exchange and NOT a store of value.


----------



## Duke of Marmalade

tecate said:


> As was explained to you (and as you well knew from the outset), those are the characteristics of a means of exchange and NOT a store of value.





			
				tecate a few pages back said:
			
		

> You have not once answered as regards consideration of Bitcoin vs. FIAT and these nonsensical examples you try and suggest Bitcoin is equal to - and compared them on the basis of the characteristics of a store of value. That is the following;
> 
> - Durability
> - Fungability
> - Portability
> - Verifiability
> - Divisibility
> - Scarcity
> - Established History
> - Censorship Resistance.


Are my posts not showing up properly on your computer?  I'll try again.  What have Fungability, Portability and Divisibility got to do with store of value?  Or let me ask a supplementary.  The Wiki list contains _"Cognizability: its value must be easily identified"  _Surely if you think Fungability, Portability and Divisibility are important tests of store of value, you would accept that Cognizability is more important than these, after all it actually references the word "value".  Why did you drop Cognizability from your universal tests?


----------



## WolfeTone

Microsoft and Bitcoin

Why does one of the largest technology companies in the world have a support page to use Bitcoin to add money to your Microsoft account? 
Surely the tech heads at Microsoft can see past the BOHA that is bitcoin?
Or perhaps it is others who cannot wrap their heads around the concept that is bitcoin?


----------



## Duke of Marmalade

OMG Theo is back


----------



## tecate

Duke of Marmalade said:


> Are my posts not showing up properly on your computer?  I'll try again.  What have Fungability, Portability and Divisibility got to do with store of value?  Or let me ask a supplementary.  The Wiki list contains _"Cognizability: its value must be easily identified"  _Surely if you think Fungability, Portability and Divisibility are important tests of store of value, you would accept that Cognizability is more important than these, after all it actually references the word "value".  Why did you drop Cognizability from your universal tests?


Once again, you incorrectly quoted the characteristics of a medium of exchange/currency and not those of a store of value.


----------



## Brendan Burgess

tecate - Gold might be worth zero. I don't really mind what it's worth as I am not a fan of it  as a store of value, or a medium of exchange, or to adorn myself with.

Now please show us  your calculations to show how Bitcoin is worth $10k 

Is the value of gold part of your equation which ends in =$10,000  ? 

Or Brendan's view of the value of gold part of that equation?

Brendan


----------



## Duke of Marmalade

tecate said:


> Once again, you incorrectly quoted the characteristics for a medium of exchange/currency and not those for a store of value.


Okay, you won't answer the question.  Ever think of a career in politics?
I see Wolfie has been so excited that Microsoft have reinstated the facility to buy games with btc (had been suspended due to volatility) that he has decided that he has to break his vow of silence.
I don't know under which of your universal acceptance tests as a store of value, being able to buy games would score.  Can you help?
As an aside, anybody that goes to the bother of paying for her Microsoft games with bitcoin is an unreconstructed self indulgent cultist (USIC) in my book.


----------



## tecate

Brendan Burgess said:


> Gold might be worth zero. I don't really mind what it's worth as I am not a fan of it  as a store of value, or a medium of exchange, or to adorn myself with.


Not so fast, Brendan.    If you're making such a big fat claim then you'll have to defend it.  The big fat claim is that you state that if there's no easy calculation to determine a fair price for Bitcoin then its worth $0.  Yet  you suggest that if there's no easy calculation to determine a fair price for gold, then it doesn't get the same treatment...you say it 'might be worth zero'...whereas with Bitcoin, you leave everyone in no doubt.  How's that for double standards Brendan.  Which is it?  Gold 'might be worth zero' or it is worth zero?  Should those that stake the $9 trillion dollar gold industry be worried?  If this is a breakthrough in understanding, then this could be huge.  There could be some media interviews coming your way on the subject!


Just so that we're clear, these are the double standards i'm talking about:


tecate said:


> Double Standards
> So far you've presented with three double standards in this discussion:
> 
> 1. Bitcoin has been considered in terms of seven universally accepted characteristics of what makes for a good store of value but you won't assess any of the nonsensical things that you liken Bitcoin to on the basis of those same fundamentals.
> 2. The core of your argument is that Bitcoin has zero intrinsic value* and on that basis alone you say that it is worth zero.  However, you don't apply the same standard to intrinsically valueless FIAT money (i.e. €uro, USD, GBP, etc.).
> 3. In the absence of a neat formula to determine the fair price of Bitcoin, you say that it has zero value.  Yet when I ask you to apply the same standard to gold, you tell me that's irrational.
> _*Bitcoin does actually have intrinsic value as it's an energy standard._


----------



## WolfeTone

_tecate _has mentioned a figure of $9trn for the gold market. 
I dont know how gold is valued at $1500 per ounce today, and maybe $1600 tomorrow other than it is what the market prices it at. 

I cant envisage gold being wholly replaced by bitcoin, but perhaps that is just my lack of foresight. I can envisage bitcoin taking a share of that market. How much I dont know, but 50% of that $9trn doesnt seem implausible to me. 
So with 21m bitcoin taking a 50% share of the $9trn gold market, my guess is that bitcoin could range from $114,000 - $214,000 a coin. 
That said, it is a long way down the road, but at todays prices, certainly worth considering to buy some more.


----------



## WolfeTone

Duke of Marmalade said:


> I see Wolfie has been so excited that Microsoft have reinstated the facility to buy games with btc (had been suspended due to volatility) that he has decided that he has to break his vow of silence.



Not really. I simply acted a bit rashly a few months back. A time-out from cyber space was called for. 

Why would one of the largest technology companies in the world have a support page for bitcoin usage?


----------



## Firefly

WolfeTone said:


> Not really. I simply acted a bit rashly a few months back. A time-out from cyber space was called for.


It's like you never left


----------



## tecate

WolfeTone said:


> Why would one of the largest technology companies in the world have a support page for bitcoin usage?


Could it be that they can actually look at things _objectively_  and they see what's coming down the tracks? So much so, that they've taken to building on top of the Bitcoin blockchain network themselves.  Could it be that they see Bitcoin layer 2 solution Lightning Network making steady progress and think not only will it solve the Bitcoin transaction time/cost issue but that it could have other implications for the $93 billion gaming industry?


----------



## elacsaplau

WolfeTone said:


> _tecate _has mentioned a figure of $9trn...…..



Hey Wolfie,

I'm not sure if you are familiar with Playboy...…...............of the Western World, that is. There's a part in it when the Playboy's dad appears yet again, which gives rise to the famous line of: _"are you coming to be killed a third time, or what ails you?"_

Your welcome return kinda reminds me of this! Stick around a while!


----------



## Brendan Burgess

tecate said:


> it 'might be worth zero'...



Just to be clear as I have worded it badly. 

Gold might be worth zero for all I care.   It might be worth zero. It might be worth $1,000 an ounce.  If I ever choose to buy it or short it, I will study it. But I doubt I will. 

Any time you are ready,  you might share with us,  your calculations that Bitcoin is worth $10,000? 

As I said, this is serious. I have shorted it before and would like to do so again. But if there is any evidence that it has a fundamental value, I would like to see it.

Brendan


----------



## WolfeTone

tecate said:


> Could it be that they can actually look at things _objectively_  and they see what's coming down the tracks?



Perhaps so _tecate , _i can never be too sure about these things. Alot of the technical talk surrounding bitcoin is often way over my head. But I garner assurance from understanding the concept of bitcoin and, as time proceeds, the whole crypto/blockchain/bitcoin arena is settling as a normal facet of internet and digital technology.


----------



## WolfeTone

Firefly said:


> It's like you never left



Thanks Firefly, I almost detect the veiled sarcasm in your  
The Big Short (unjustly banned), Folsom (created to get around the unjust banning of The Big Short, but then unjustly banned). 
And now Wolfe Tone, im sure BB can confirm timelines of said bannings and username creations.

After that, you can speculate to your little speculative hearts content 

But lets not digress. You are an IT man are you not? 
Can you explain why one of the largest technology companies in the world have a support page for payments with Bitcoin?


----------



## Firefly

Hi tecate,

You are obviously very knowledgeable in the area of Bitcoin so I also would be very interested in knowing how you arrive at this valuation.


----------



## Firefly

WolfeTone said:


> Thanks Firefly, I almost detect the veiled sarcasm in your
> The Big Short (unjustly banned), Folsom (created to get around the unjust banning of The Big Short, but then unjustly banned).


Speaking of Folsom, did you know that Folsom is a hotel that features in the book Bitcoin Billionaires? How's that for coincidence ???


----------



## WolfeTone

Firefly said:


> Speaking of Folsom, did you know that Folsom is a hotel that features in the book Bitcoin Billionaires? How's that for coincidence ???



No I did not know that. Its also a city in California where I have some distant relations living. I hope to visit someday. 

Any thoughts on why the one of the largest technology companies in the world has a support page for payments with bitcoin?


----------



## tecate

Brendan Burgess said:


> Gold might be worth zero for all I care.   It might be worth zero. It might be worth $1,000 an ounce.  If I ever choose to buy it or short it, I will study it. But I doubt I will.


No - sorry Brendan but that in NO way cuts it.  You've trash talked Bitcoin on this basis - and now when it comes to gold, you don't care.  I care.  People following this thread care (because it determines very much if there''s any credibility to your claims).   So - please explain to readers how you would advise them with regard to purchasing gold right now.  As I write this, gold is at $1,742/oz.  Should I go out and buy it right now?  Is it a steal at that price or should I short it?

This is a $9 trillion dollar industry - so it's got oodles of credibility and professionalism backing it up.  Surely someone has a magic formula?

How about Silver?  What calculation would you use for determining the fair market price of silver?


Firefly said:


> You are obviously very knowledgeable in the area of Bitcoin so I also would be very interested in knowing how you arrive at this valuation.


See above my friend - we won't be moving past this until Brendan fesses up :-D



Firefly said:


> Speaking of Folsom, did you know that Folsom is a hotel that features in the book Bitcoin Billionaires? How's that for coincidence ???


The Social Network was a resounding box office success.  Hopefully the second part to the Winklevoss' twins story - 'Bitcoin Billionaires' will be equally well put together when it hits the big screens next year.


----------



## Duke of Marmalade

WolfeTone said:


> Not really. I simply acted a bit rashly a few months back. A time-out from cyber space was called for.
> 
> Why would one of the largest technology companies in the world have a support page for bitcoin usage?


Because there are people who get a kick out of paying for their games with bitcoin.  I don't see that demand ever driving the price to $114,000.  But wait, where's my imagination?  I foresee a day when all the work is done by robots and the millennials spend all day playing Microsoft games and casually let their peers know how they spent a few bitcoin at the games today.  Could be.


----------



## WolfeTone

Duke of Marmalade said:


> Because there are people who get a kick out of paying for their games with bitcoin.



Is that it? That is the best reasoning you have why MS is providing the service? 

I would get a kick out of paying for my sons xbox games with my toenails. Is there a support page for this?


----------



## Duke of Marmalade

tecate said:


> As was explained to you (and as you well knew from the outset), those are the characteristics of a means of exchange and NOT a store of value.


No, I'm not allowing you away with that.  You won't answer the question why your store of value criteria clearly contain medium of exchange tests and yet you drop a test which bridges the two aspects. Fair enough.
But I shouldn't have allowed the disingenuous moving of the goalposts in the first place.  Bitcoin is first and last a currency, a medium of exchange.  The clue is in the name, but read that White Paper again just to satisfy yourself.  Its ultimate role as a currency is central to its long term store of value.
A house is a store of value.  But it is firstly a place to live.  You cannot separate its store of value from its primary use value.


----------



## Duke of Marmalade

WolfeTone said:


> Is that it? That is the best reasoning you have why MS is providing the service?


I have expanded that earlier post.  You will see that I concede that you might have a point.


----------



## Firefly

Duke of Marmalade said:


> Bitcoin is first and last a currency, a medium of exchange.  The clue is in the name, but read that White Paper again just to satisfy yourself.  Its ultimate role as a currency is central to its long term store of value.


I think it suits the narrative that Bitcoin is a store of value cos it's costs a few grand. That and almost nobody uses it to buy anything. Something tells me if it was the other way round it would be hailed as a currency but not yet a store of value, which you know will come as it's still only shiny & new..


----------



## WolfeTone

Duke of Marmalade said:


> I have expanded that earlier post.  You will see that I concede that you might have a point.



Yes, the price may never go $114,000 for sure. But that is not really the point is it? 
Rather, one of the largest technology companies in the world has provided a support page for customers wanting to pay with bitcoin. 

From yours and Brendans perspective surely this makes no sense to you both?


----------



## tecate

Duke of Marmalade said:


> No, I'm not allowing you away with that.  You won't answer the question why your store of value criteria clearly contain medium of exchange tests and yet you drop a test which bridges the two aspects.


A couple of things your Dukeness..  Please acknowledge that you posted incorrect data and linked to incorrect data.  Secondly, either you accept the store of value characteristics that I listed or you have another attempt at citing such a list. 



Duke of Marmalade said:


> But I shouldn't have allowed the disingenuous moving of the goalposts in the first place.  Bitcoin is first and last a currency, a medium of exchange.  The clue is in the name, but read that White Paper again just to satisfy yourself.  Its ultimate role as a currency is central to its long term store of value.
> A house is a store of value.  But it is firstly a place to live.  You cannot separate its store of value from its primary use value.


Ha ha ha...this is priceless.  Would you care to have a look at the title of the thread and then come back to me if you're still confused as to why the discussion focuses on 'store of value' rather than 'unit of account'.



			
				Firefly said:
			
		

> I think it suits the narrative that Bitcoin is a store of value cos it's costs a few grand. That and almost nobody uses it to buy anything. Something tells me if it was the other way round it would be hailed as a currency but not yet a store of value, which you know will come as it's still only shiny & new..


Then put your money where your mouth is and short it right now.  Simples.


----------



## tecate

WolfeTone said:


> Yes, the price may never go $114,000 for sure. But that is not really the point is it?
> Rather, one of the largest technology companies in the world has provided a support page for customers wanting to pay with bitcoin.
> From yours and Brendans perspective surely this makes no sense to you both?


They're waiting for the tulips payments page and payments gateway to be put in place.


----------



## Duke of Marmalade

Thought I would throw my 2 cents worth into the Great Price Of Gold debate.  The economists tell us that price is the equilibrium between supply and demand.  With bitcoin we have absolute certainty on the supply so I suppose the _Boss _is trying to tease out what is informing the demand.
With gold there is a primary source of demand - jewelry and industrial. The latter is driven by commercial factors.  The former is highly subjective. But we know from the WGC that the majority demand is secondary, either store of value or speculation. 
Now what I would like to know _tecate _is are you a primary or a secondary demand agent?  This might also help resolve your tit for tat with the _Boss_.  If you are a secondary agent like _Fella _then the situation is simple, for you the price is the price.  But one suspects from your musings that there is at least a bit of the primary demand in you.  The question is how do you quantify that primary demand, if it exists.


----------



## Duke of Marmalade

tecate said:


> Then put your money where your mouth is and short it right now.  Simples.


You address this question to me even though I did not actually make the point.  This is the second time you have done that


----------



## tecate

Duke of Marmalade said:


> Thought I would throw my 2 cents worth into the Great Price Of Gold debate.  The economists tell us that price is the equilibrium between supply and demand.


What's this?  Preliminary results are in?  It seems that the price of gold is determined by the supply and demand dynamic.  But lets not jump the gun, lets wait and see what Brendan comes back with.

Incidentally, do you have any sort of formula to go with that?  I know that 'stock to flow' is one such model that they tinker around with in the gold world but perhaps you're aware of others?

(Just for any unfortunate neutrals trying to dicypher this discussion, Industrial gold use accounts for about 10% of gold.  The World Gold Council classifies Gold jewellery as a function of investment and store of value largely).


----------



## Duke of Marmalade

tecate said:


> What's this?  Preliminary results are in?  It seems that the price of gold is determined by the supply and demand dynamic.  But lets not jump the gun, lets wait and see what Brendan comes back with.
> 
> Incidentally, do you have any sort of formula to go with that?  I know that 'stock to flow' is one such model that they tinker around with in the gold world but perhaps you're aware of others?


_tecate_ I actually did see once an attempt to rationalise its price.  I'll try and trace it down.  It was based on estimates of how much of world monetary transactions will ultimately be done in bitcoin.  I'm not kidding.  I know you think its use as a medium of exchange is off topic but this exercise which was done by a bitcoin enthusiast (not a cultist) saw its use as a medium of exchange as the final arbiter of its value/price.  From memory he had a topside projection where 15% of world transactions were in bitcoin and that gave rise to a big price as you might guess, somewhere in the range that the prodigal _Wolfie_ has bandied about.
On a slightly separate point I recall you dismissing recent volatility as only of relevance to those with very short term horizons but that long term you were confident of its store of value.  I really find that difficult to understand.  Even the hedge fund enthusiasts usually comment that it will either be zero long term or something v. big.  Also how you can be so confident of its long term value when mainstream economists dismiss the concept also mystifies me.  (Okay I know, you're going to throw the Keynesian fax machine at me.  )


----------



## elacsaplau

This thread is great craic! I'm fat as a fool on the popcorn.



WolfeTone said:


> No I did not know that. Its also a city in California where I have some distant relations living. I hope to visit someday.



Please tell me not the prison!


----------



## tecate

Duke of Marmalade said:


> I know you think its use as a medium of exchange is off topic but this exercise which was done by a bitcoin enthusiast (not a cultist) saw its use as a medium of exchange as the final arbiter of its value/price.  From memory he had a topside projection where 15% of world transactions were in bitcoin and that gave rise to a big price as you might guess,


Have at it Dukey.  Notwithstanding that, I'm keen to hear back from Brendan on how gold is valued.



Duke of Marmalade said:


> On a slightly separate point I recall you dismissing recent volatility as only of relevance to those with very short term horizons but that long term you were confident of its store of value.  I really find that difficult to understand.



It's as yet formative in the role of a store of value / digital gold.



Duke of Marmalade said:


> Even the hedge fund enthusiasts usually comment that it will either be zero long term or something v. big.  Also how you can be so confident of is long term value when mainstream economists dismiss the concept also mystifies me.


I've acknowledged many times that Bitcoin could be usurped by another digital currency or it may not garner any further adoption but that's not my current thinking (and of course everyone's opinion is different on that).
Look at the performance of the conventional markets over recent weeks.  Does it make sense? Who knew and who prophesised the opposite?


Duke of Marmalade said:


> (Okay I know, you're going to throw the Keynesian fax machine at me.)


At ease Dukey, I haven't seen one since Adam was a boy so I'd say you're safe enough.


----------



## Brendan Burgess

tecate said:


> I'm keen to hear back from Brendan on how gold is valued.



Hi tecate

You are just being silly  now. Irrationality is bad enough. 

You think that something you own is worth $10,000 and yet the only basis for that is that Brendan doesn't know how to value gold. 

You demean your other arguments by not answering the most fundamental question. 

Brendan


----------



## tecate

Brendan Burgess said:


> You demean your other arguments by not answering the most fundamental question.


Brendan, I have to say that it's disappointing that you're doubling down on the double standards.

This aspect of the discussion isn't going anywhere until you explain to us all how gold is valued and its fair price arrived at.  I'll even throw you a bone and open  it up to Silver also.

Dukey tells us its simply 'supply and demand' and that there is no calculation per se. Would this be in line with your thoughts?

We await the calculation.


----------



## Duke of Marmalade

tecate said:


> Dukey tells us its simply 'supply and demand' and that there is no calculation per se.


That's what the economists tell us from an external viewpoint.  But _Boss _is asking you how did you arrive at the price that you satisfies your demand?  I suspect the answer is that you have no metric- why not just say so, heck you would be in the good company of _Fella_.


----------



## WolfeTone

Brendan Burgess said:


> I am planning to short it again when I have a bit of cash and it hits $10k.



Sorry for butting in, but I am intrigued as what the $10K price tag has to do with you shorting bitcoin? 
It implies, to me at least, that you have done some sort of valuation yourself? Certainly, its how I imagine how someone of rational thinking would behave - try to make a rational valuation of an item and if its overpriced short it, if its underpriced buy it. 
Of course, even the best of rational thinking investors can get things wholly wrong. But its clear, you have determined a price for bitcoin (notably not its current price) where, presumably, you are seeking to minimise any potential losses and maximize any potential profits? 
Am I correct? If so, how did you calculate $10k as the price to short it? 
Or is your valuation of $10k totally irrational?

Lets see if can recall, the last time you shorted bitcoin, following innumerable proclamations that it is worthless, you sold it at $13,000? and bought it at $5,000k? 
Given your toenail, worthless etc claims, can you explain the (ir)rationality in your behavior?


----------



## tecate

@dukey: The answer is that this discussion has been misinformed and part of clearing that up is Brendan clarifying how the fair value of gold is arrived at.  

There's no way round that.


----------



## Brendan Burgess

WolfeTone said:


> If so, how did you calculate $10k as the price to short it?



Hi Wolfie

The valuation is clear - Bitcoin is worth zero. 

However, as long as there are irrational fanatics around, there is risk in shorting it. 

I did short it at $14,000 initially and set a price to close out at $3,000.   I stuck to that and it came down close to $3,000 but I didn't close out. I was greedy and waited. And it bounced back.  I watched a lot of my gains fade away.  

So it approached $5,000 on the way down again which coincided with me needing cash, so I closed out.

I can't forecast the irrational movement of Bitcoin. I can only tell you the end point - zero.  I will short it at $10k when I have the cash.  I understand the risk and will close out if it rises to $20k or if it falls to $5,000. That is the rough plan at the moment.  When I have the cash I will firm up on that. 

As with all short sales, if there is no change in the underlying information, it becomes an even better value short as the price rises.  But it's hard to stake more money on a bet which is under the water. 

Brendan


----------



## elacsaplau

Brendan,

I've been thinking! You could always do an each-way double or something with Tesla!


----------



## Duke of Marmalade

tecate said:


> @dukey: The answer is that this discussion has been misinformed and part of clearing that up is Brendan clarifying how the fair value of gold is arrived at.
> 
> There's no way round that.


Oh I think that is a gold herring.


----------



## tecate

Duke of Marmalade said:


> Oh I think that is a gold herring.


i wonder does that mean I'll be getting the same answer as I got in July 2019? (A refusal to answer).  

So as folks unfamiliar with Bitcoin try to weigh it up here, I'd encourage them to join the dots and figure out what claims check out and which ones don't.


----------



## WolfeTone

Brendan Burgess said:


> I can't forecast the irrational movement of Bitcoin.



So if you are going long or short on bitcoin, its all irrational behavior?


----------



## Brendan Burgess

WolfeTone said:


> So if you are going long or short on bitcoin, its all irrational behavior?



Hi Wolfie

The ultimate price is zero.  So it's a bet with a positive equity.   The average person who shorts Bitcoin will make money.

However, it's still risky. In my view, the gain is well worth the risk.  But I have to manage the risk.

People who are willing to pay $10k for something which has no fundamental value but shares some common features with toe nails and currencies could well push the value up to $100k.  There is not accounting for the irrationality of people. 

I freely admit that if I had been aware of it when it was $800, I would have shorted it. 

So hopefully it will fall from $10k to $5k.

Then hopefully it will rise again and I will short it again. 

And so on.  While I am disappointed that my forecast that it would not last a year turned out wrong, it could well be the gift that keeps on giving. 

Brendan


----------



## WolfeTone

Brendan Burgess said:


> There is not accounting for the irrationality of people.



No there is not, so im somewhat intrigued as to how you came to the notion of shorting it at $10k. Why not $8k, or $12, or even $20k or $100k?
How did you come to decide $10k was the price you would short it?
Seems like to me, and having you acknowledge that it could go to $100k by virtue of all this irrationality, then the potential gains are very much on the buyers side.
But that's just my take, you have your view. In the end, the market will determine the price at which all this irrationality, including your own, is to be valued - just like gold.


----------



## Brendan Burgess

Hi Wolfie 

Good questions and hard to answer. 

The ultimate destination is zero. 

So shorting it at any price has a net positive expectation. 

Buying it at any price has a net negative expectation. 

So buyers will lose more than sellers. 

It is tough to close out at $5k when you know what you are, in effect, buying, is worth nothing.

Given all that, my gut feeling is that it seems to go up and down. I doubt it will trouble the $20k level, but it might.

I could wait for $15,000 , but it might never get up there and I would have missed out the opportunity of shorting it. 

Brendan


----------



## WolfeTone

Brendan Burgess said:


> The ultimate destination is zero.



For sure, just like the thousands of fiat currencies throughout history, they all return to zero.



Brendan Burgess said:


> So shorting it at any price has a net positive expectation.
> 
> Buying it at any price has a net negative expectation.
> 
> So buyers will lose more than sellers.



I think there is a critical element which is entirely missing in your thought process - time.
You have already acknowledged that the market price of bitcoin could go either way by quite some significant margin, before it returns to zero, but you haven't assigned a period of time to any of these fluctuations which is a critical error.
And I think we can all agree that it is virtually impossible to time the market?
So the question is, between now and then (returning to zero) which way will the price go?
For my part, I have no expectation that bitcoin will return to zero anytime in the foreseeable future. Quite the opposite in fact, I expect it to feature more prominently in our increasingly digital and internet based interactions. Admittedly, I do find a lot of tech talk goes over my head, but then again, most sectors develop their own lexicons detached from the lay person. But I don't have to understand the complexities within to understand the concept. I also garner confidence from the extent and prevalence of informed opinion that permeates from the IT industry that is continually investing time in bitcoin. You would have to be blind not to recognize that a lot of well educated and informed people are innovating, developing and working on solutions on the bitcoin network.
Its my guess that after 11yrs, if bitcoin was BOHA, this topic would have been consigned to history already. Instead, im of the view that bitcoin is merely in its infancy.
I have no idea what price bitcoin will be at any undefined time in the future anymore than knowing what the price of my house will be. With the distinction that my house is a finished product, bitcoin I feel, is just at foundation stage.
My expectation is that bitcoin is here to stay for the foreseeable future and that if the concept continues to develop then that, in my opinion, represents an opportunity to buy.


----------



## Brendan Burgess

WolfeTone said:


> You have already acknowledged that the market price of bitcoin could go either way by quite some significant margin, before it returns to zero, but you haven't assigned a period of time to any of these fluctuations which is a critical error.



Hi Wolfie

I had my last short position for 18 months. I was annoyed and frustrated that it did not fall to zero quicker. But I was in no hurry as I was in the money soon after shorting it. 

When I short it again, I will face the uncertainty that comes with volatility. If it rises by 50%, it will be disappointing. If it falls by 50%, I will close my position and hope that it rises again. 

But we agree that we can't  get the timing right.  

So I won't bet the shop on it. I will just allocate a percentage of my portfolio that I am prepared to lose in full. 

It is not like buying a portfolio of shares which rise over the long-term.

But it is part of a portfolio.  Some will be profitable. Some will be loss making.

Brendan


----------



## WolfeTone

So after all this discussion your claim that bitcoin will return to its ultimate destination of zero is not predicated on anything other than the realization that everything will, one day, return to zero?

Excuse my ignorance,  comparisons with toenails and proclamations of BOHA I assumed, naively now it seems, that you were calling out bitcoins ultimate destination , if not imminently, but within at least a short-term period of 18-24 months?
If so, your strategy to close out your position after a 50% price drop is wholly irrational in the face of the ultimate destination.


----------



## DublinHead54

@Bren


Brendan Burgess said:


> Hi Wolfie
> 
> The ultimate price is zero.  So it's a bet with a positive equity.   The average person who shorts Bitcoin will make money.
> 
> Brendan



Do you have evidence to support that the average person will make money? That appears quite a careless statement and could be misconstrued as a statement of fact to the untrained eye.

On a separate note......you have made two statements
1. Bitcoin has a value of zero
2. The reason it has not gone to 0 is that the market is irrational

In this instance, I agree with those sentiments, but I don't see how as an investor you can get comfortable enough to put on a trade knowing the market is irrational? Or is it a case your reason for the previous trade failing (shorting at 10k with a close of 3k) is due to the market being irrational. 

Therefore if you short it now, you will make money not because the value is 0 but rather the irrationality of the market that leads to volatility. You could also go long and make money.

Ultimately your first point on Bitcoin will only be proven true if it goes to 0. In the meantime, you will be able to make money shorting it due to the market being irrational.


----------



## WolfeTone

Dublinbay12 said:


> You could also go long and make money.



And given the irrationality of the market, the price could go either way. However, if you short bitcoin your potential profits are limited, but if you go long, the potential profits are unlimited. 
So accepting for a moment that the market is irrational, and that this is the only information available to the investor, then surely the rational investor interested in gambling a few punts would try to exploit the potentially unlimited profits and buy bitcoin rather than limit those potential profits by going short?

Unless of course the investor has some other additional information that at least indicates to them that the market will bring forth the ultimate destination of bitcoin within a given timeframe. 
The investor may still be wrong, they may get the timing wrong, but without this timeframe in mind, then the potential gains going long far outweigh the potential gains going short. 
Surely a rational investor can see this?


----------



## Duke of Marmalade

This is a good summary of bitcoin as a store of value:


			
				Investopedia said:
			
		

> One of the biggest issues is Bitcoin's status as a store of value. Bitcoin's utility as a store of value is dependent on its utility as a medium of exchange. We base this in turn on the assumption that for something to be used as a store of value it needs to have some intrinsic value, and if Bitcoin does not achieve success as a medium of exchange, it will have no practical utility and thus no intrinsic value and won't be appealing as a store of value. Like fiat currencies, Bitcoin is not backed by any physical commodity or precious metal.15
> Throughout much of its history, the current value of Bitcoin has been driven primarily by speculative interest.


Two important takeaways.  Ultimately bitcoin's status as a store of value stands or falls on its acceptance and penetration as a medium of exchange.  Secondly, to date its pricing has been almost totally speculative.
Note that Gold is not used as a medium of exchange at all in the developed world and yet it has established itself as a store of value.  On these grounds alone the representation of bitcoin as digital gold and pictures of gold bitcoins on the internet are almost irresponsible.  
_tecate _tries to separate bitcoin's store of value from its use as a medium of exchange (understandably) but this summary from Investopedia shows that he is deluding himself.  He is in fact just one of the speculators behind the current price.  He is speculating that ultimately bitcoin will be a store of value but what he does not seem to realise is that in effect he is speculating that it will ultimately establish itself as a major medium of exchange.
So a question for _tecate_, which I do not expect him to answer.  If it is finally recognised that bitcoin will not achieve meaningful penetration as a medium of exchange does he still think it will survive as a store of value?


----------



## DublinHead54

WolfeTone said:


> And given the irrationality of the market, the price could go either way. However, if you short bitcoin your potential profits are limited, but if you go long, the potential profits are unlimited.
> So accepting for a moment that the market is irrational, and that this is the only information available to the investor, then surely the rational investor interested in gambling a few punts would try to exploit the potentially unlimited profits and buy bitcoin rather than limit those potential profits by going short?
> 
> Unless of course the investor has some other additional information that at least indicates to them that the market will bring forth the ultimate destination of bitcoin within a given timeframe.
> The investor may still be wrong, they may get the timing wrong, but without this timeframe in mind, then the potential gains going long far outweigh the potential gains going short.
> Surely a rational investor can see this?



That is my point, any profit made from shorting Bitcoin currently is not because the value is 0, it is because the market is irrational. Unless as you say there is non-public information known. 

I guess if Brendan were to short it at 10k on the basis that the value is 0, he should set his close price at $0.

At the minute it seems like it is just a gamble and thus the directionality of any bet does not matter.


----------



## Duke of Marmalade

I thought that insightful summary from Investopedia was worth two posts.


			
				Investopedia said:
			
		

> Like fiat currencies, Bitcoin is not backed by any physical commodity or precious metal.


And now I see it with such clarity.  The remarkable success and occasional spectacular failure of Fiat was the spawning ground for bitcoin.  Until relatively recently, the idea of a currency without intrinsic backing would have been a laughing stock.  The great silver lining of the 30s depression was the recognition that money did not need the backing of physical gold.  The very first thing that hits anyone in the eye, including Satoshi,  is "but what does the digital entry signify?".  And the stock answer from the cultists is "what does Fiat signify?".  The follow up is that unlike Fiat which can do a Venezuela or a Zimbabwe bitcoin is untouchable.  In fact current conditions could hardly be more propitious for this narrative - QE and helicopter money play into the bitcoin mantra.  It is a wonder that it is still less than half the price it was two years ago.
Yes, Fiat does not have intrinsic value, though it is backed the debts of economic agents.  Nonetheless, our ancestors would be right to be vary wary of a money which had no intrinsic value.  That the concept survives and serves society so well in the main requires very careful management and oversight.  If I ever do worry about the value of my humble Fiat holding, I reassure myself that there is a sophisticated machinery in place to support it.  
Some day, soon, when Fiat has weathered its current storm and when the bitcoin speculators get burnt yet again the Satoshi will drop that there is no machinery in place to actually underpin its price.  It will then drop to earth like a stone.


----------



## Duke of Marmalade

Tool for putting a price on bitcoin


----------



## Fella

Duke of Marmalade said:


> Tool for putting a price on bitcoin



Duke do you think shorting Bitcoin has a positive or negative expected return over a 1 year /3 year / 5 year period ?


----------



## Duke of Marmalade

Fella said:


> Duke do you think shorting Bitcoin has a positive or negative expected return over a 1 year /3 year / 5 year period ?


Assuming this question is in good faith I attach the tool I use for evaluating bitcoin shorts.  It uses a macro so your blockers may not allow you to open it.
The model allows for 3 time periods for lognormal simulated performance. As sent from factory it has the following inputs.
First 50 weeks 1% downward weekly drift; 10% weekly volatility
Next 50 weeks .5% downward weekly drift; 10% weekly volatility
Thereafter no drift 10% weekly volatility

The test example is to short 1 bitcoin with a stop loss of $10k and a close out if btc hits $1000.
A two year holding period is simulated
The summary result is an expected gain of $1,050 but a 23.3% chance of hitting the stop loss.
I don't like those odds.


----------



## Brendan Burgess

Dublinbay12 said:


> At the minute it seems like it is just a gamble and thus the directionality of any bet does not matter.



Hi Dublin Bay

If you give me odds of 6/1 on a throw of a 5 on a die, I have a positive expected outcome.  If I roll it 120 times, I will roll a 5, twenty times and win €120. I will roll something else 100 times and lose €100. So I can expect a profit of €20 from the 120 rolls.

It's not quite the same with Bitcoin, but it's something similar.  I could short it now and it could rise.  If I could do multiple shorts I would expect a profit as the ultimate price is zero. 

Brendan


----------



## Brendan Burgess

Duke of Marmalade said:


> Tool for putting a price on bitcoin



I am not sure what it's doing but it's fun sliding those sliders around. 

I suppose it forces people who want to calculate the value to make estimates. 

Brendan


----------



## Fella

I can open it , do you close out at 1 dollar or 1000? 
Where did you get the 1% downward weekly drift and 0.5% downward weekly drift numbers from?


----------



## Duke of Marmalade

Fella said:


> I can open it , do you close out at 1 dollar or 1000?
> Where did you get the 1% downward weekly drift and 0.5% downward weekly drift numbers from?


1,000 as per spreadsheet, earlier post edited
I used the John Bowe technique in coming up with the model's parameters


----------



## DublinHead54

Brendan Burgess said:


> Hi Dublin Bay
> 
> If you give me odds of 6/1 on a throw of a 5 on a die, I have a positive expected outcome.  If I roll it 120 times, I will roll a 5, twenty times and win €120. I will roll something else 100 times and lose €100. So I can expect a profit of €20 from the 120 rolls.
> 
> It's not quite the same with Bitcoin, but it's something similar.  I could short it now and it could rise.  If I could do multiple shorts I would expect a profit as the ultimate price is zero.
> 
> Brendan



The statistics are correct but irrelevant to this situation, and not sure what point it makes in supporting you rationalizing your bitcoin short given that you can't know when it will go to 0 just that it would go to zero. I would think this important piece of information would prevent an investor from putting on a short. 

I know when the big boys short in the market, they often have to close out because they can't afford the cost of keeping the short open as time goes bye. Is there not a cost to rolling a short position each day and therefore the short has a time limit where it would become unprofitable even when Bitcoin goes to 0?


----------



## Duke of Marmalade

Brendan Burgess said:


> I am not sure what it's doing but it's fun sliding those sliders around.
> 
> I suppose it forces people who want to calculate the value to make estimates.
> 
> Brendan


I think the really big revelation is that all this speculation about bitcoin's ultimate destiny stands or falls on its widespread adoption as a medium of exchange.  I don't see that happening and I don't think current speculators would be too convinced either.  And if by some chance it really did start to gain a foothold as a medium of exchange the monetary authorities would have to clamp down on it hard.  To me then its best case final resting place is dominating the black market and as it happens the tool says that 50% of that market would support the current price.
The tool asks for inputs and then gives a price.  But you have been asking a more fundamental question which is "where do you get your inputs, or why should there be that level of take up?"


----------



## Fella

Duke of Marmalade said:


> 1,000 as per spreadsheet, earlier post edited
> I used the John Bowe technique in coming up with the model's parameters



Can you send me a link to that John bowe technique?


----------



## Duke of Marmalade

Fella said:


> Can you send me a link to that John bowe technique?


_courtesy of tecate_


----------



## Fella

Duke of Marmalade said:


> _courtesy of tecate_



So you just made them figures up , you had me excited about making money shorting it .


----------



## Duke of Marmalade

Fella said:


> So you just made them figures up , you had me excited about making money shorting it .


The volatility could probably be modeled from historic data but the drift has to be subjective I fear.


----------



## tecate

Fella said:


> So you just made them figures up , you had me excited about making money shorting it .


Maybe this is the model Brendan would use for figuring out the fair price of gold?


----------



## Leo

Duke of Marmalade said:


> The volatility could probably be modeled from historic data but the drift has to be subjective I fear.



For quite a time bitcoin's price was closely correlated to Google search trends. More recently however it appears some may have been using this to affect the price in their favour.


----------



## Fella

Duke of Marmalade said:


> The volatility could probably be modeled from historic data but the drift has to be subjective I fear.



You just made an excel spreadsheet with random figures and ran a simulation to decide if it was value shorting ? I'm not sure if your been real or not , that probably explains why you still in debt at 40


----------



## Sunny

Fella said:


> You just made an excel spreadsheet with random figures and ran a simulation to decide if it was value shorting ? I'm not sure if your been real or not , that probably explains why you still in debt at 40



Think you might have just undone all the good you have done with previous posts with a comment like that.


----------



## Fella

Sunny said:


> Think you might have just undone all the good you have done with previous posts with a comment like that.


I did inset a smile but it didn't show up


----------



## Fella

Sunny said:


> Think you might have just undone all the good you have done with previous posts with a comment like that.



Your right though I struggle with recognising sarcasm and long form debates, I have mild autistic tendencies. So I'll be closing my account as to protect my over loading brain. Sorry if offence caused Duke


----------



## Sunny

Fella said:


> Your right though I struggle with recognising sarcasm and long form debates, I have mild autistic tendencies. So I'll be closing my account as to protect my over loading brain. Sorry if offence caused Duke



No need for that. I am sure he is not that offended. Just didn't read well without the smiley thingy!

By the way, someone else tried to close their account. Check out how that went!


----------



## Duke of Marmalade

Fella said:


> Your right though I struggle with recognising sarcasm and long form debates, I have mild autistic tendencies. So I'll be closing my account as to protect my over loading brain. Sorry if offence caused Duke


Yes I was puzzled by the comment.  Thanks to _Sunny _for having the matter cleared up - no offence taken. 
Obviously shorting bitcoin is a subjective play - as you say yourself the price is the price and who can say categorically that the price is wrong.  I developed the spreadsheet back when bitcoin was at 14,500.  I was mainly interested in modelling the volatility risk in taking out a short, which I think can be reasonably modeled.  The trade offs looked good and so I took a modest short position and got out a couple of months later at around 8,000.  I haven't dabbled since.


----------



## Firefly

Duke of Marmalade said:


> _courtesy of tecate_


I must say I didn't have tecate down for a communist being a proponent of a no government "currency" such as Bitcoin. 

It's Friday so a joke springs to mind......_"A communist walks into a bar with Bitcoin..."_


----------



## tecate

WolfeTone said:


> So after all this discussion your claim that bitcoin will return to its ultimate destination of zero is not predicated on anything other than the realization that everything will, one day, return to zero?



The average lifespan of a FIAT currency is 27 years.  If Brendan was to qualify his statement to what you are pointing out Wolfie I.e. that ultimately everything returns to zero (very much including FIAT currencies), there might be some credibility in it.



WolfeTone said:


> I assumed, naively now it seems, that you were calling out bitcoins ultimate destination , if not imminently, but within at least a short-term period of 18-24 months?



Brendan and others started off with such thinking.  That’s demonstrated by their earlier posts on Bitcoin on AAM cerca 2017/8 and price predictions of zero that have not materialised.  As Bitcoin stubbornly has no intention of playing along with that script, the time element has been removed.  To verify this, ask Brendan to confirm when Bitcoin will go to zero.  As I outlined above, the average lifespan of a FIAT currency is 27 years - with a couple of them having kicked the bucket in the last few weeks alone.



WolfeTone said:


> The investor may still be wrong, they may get the timing wrong, but without this timeframe in mind, then the potential gains going long far outweigh the potential gains going short.
> Surely a rational investor can see this?



And this is precisely what @Fella has demonstrated that he understands.  Nobody here has ever suggested that you put your life savings into Bitcoin. It’s at a formative and early stage in its development and use.  From an investment perspective, it is high risk.  However, that risk is asymmetric - with the potential upside being far greater than any other asset at this point in time. Very few assets present with that sort of gain - and nor will Bitcoin in the longer term when it matures as an asset.

So people can say that it’s risky as hell but what @Fella gets is in sizing that investment.  With a 2% allocation, if naysayers are right and Bitcoin gets wiped out, then of course it’s bad but given target inflation is 2%, it doesn’t destroy his portfolio.  On the other hand, if Bitcoin keeps doing what it has been doing - being the best performing asset  of the last decade, of 2019 and thus far in 2020 - then with a much much higher upside than all other assets right now, that 2% allocation is going to lift the value of his overall portfolio disproportionately.  Looking at it from that perspective, it's foolhardy not to gain a certain level of exposure to the digital asset.



Duke of Marmalade said:


> This is a good summary of bitcoin as a store of value:


The article in its entirety is a good writeup in the consideration of Bitcoin.  Always the penchant to cherry pick, your Dukeness.  The entire article can be found here.  I’d encourage people to read the whole thing - not just Dukey’s highlights!




Duke of Marmalade said:


> Ultimately bitcoin's status as a store of value stands or falls on its acceptance and penetration as a medium of exchange.  *Note that Gold is not used as a medium of exchange at all in the developed world and yet it has established itself as a store of value*.


Forgive the terrible pun but this is pure gold from his Dukeness!

The article outlines precisely why Gold can’t be used as a medium of exchange:



			
				John Kelleher's Investopedia Article said:
			
		

> Utility also requires that currencies be easily moved from one location to another. Burdensome precious metals and commodities don't easily meet this stipulation.



The article then goes on to demonstrate precisely what gives Gold value:



			
				John Kelleher's Investopedia Article said:
			
		

> _Generally, scarcity can drive value higher. This can be seen with precious metals like gold._



We had Brendan tell us that scarcity doesn’t matter but as Kelleher points out, it very much does!  Bitcoin has designed in scarcity - and with that, it can act as a store of value.  It doesn’t stop there.  Bitcoin has the ability to act as a medium of exchange (unlike gold).  Sure, adoption in a medium of exchange context will copper fasten its position.  I’ve referred to exactly that in previous posts.  However, as a store of value, there is nothing standing in its way to either be a digital form of gold or a store of value asset in its own right.  It brings with it additional qualities that supplant gold.  I believe in the longer run, Bitcoin will make further in-roads as a medium of exchange.  Improvements in usability and the sustained and ongoing process of a reduction in volatility will see to that.  However, Gold proves that there is no actual need - Bitcoin can act as a store of value just like Gold without having widespread use as a means of exchange.



Duke of Marmalade said:


> On these grounds alone the representation of bitcoin as digital gold and pictures of gold bitcoins on the internet are almost irresponsible.



That’s completely incorrect.  See above - and go back and look at the characteristics of any store of value - Bitcoin scores exceptionally well in those terms.



Duke of Marmalade said:


> _tecate _tries to separate bitcoin's store of value from its use as a medium of exchange but this summary from Investopedia shows that he is deluding himself.



Once again, see above.  There’s no delusion here…at least not on my part.  As mentioned, you cherry pick from the article.  Secondly, you disprove the point you are making as Gold doesn’t act as a medium of exchange yet it is very much a store of value.



Duke of Marmalade said:


> He is speculating that ultimately bitcoin will be a store of value but what he does not seem to realise is that in effect he is speculating that it will ultimately establish itself as a major medium of exchange.



Disproven - see above.



Duke of Marmalade said:


> So a question for _tecate_, which I do not expect him to answer. If it is finally recognised that bitcoin will not achieve meaningful penetration as a medium of exchange does he still think it will survive as a store of value?



Gold stands as the king in terms of store of value yet it’s not a medium of exchange.  Does that answer your question?


Duke of Marmalade said:


> The remarkable success and occasional spectacular failure of Fiat was the spawning ground for bitcoin.



FIAT has served society well - within it’s time and place.  However, you’ve previously referred to ‘monetary evolution’ and digital currency is a manifestation of that.  Additionally, the _‘occasional spectacular failure of FIAT’_ is inaccurate - that failure is ongoing.  The average lifespan of a FIAT currency is 27 years.  At any given time, we have a list of mismanaged FIAT currencies. In the past few weeks alone, we have had two of them fail completely.



Duke of Marmalade said:


> Until relatively recently, the idea of a currency without intrinsic backing would have been a laughing stock.



And that’s precisely what we’ve had with FIAT currencies since the withdrawal of the gold standard.  And here’s the kicker - they very much can’t be trusted whereas preprogrammed and untamperable Bitcoin with it’s fixed supply can.



Duke of Marmalade said:


> The great silver lining of the 30s depression was the recognition that money did not need the backing of physical gold.



That’s a bare faced lie.  From Kelleher's Investopedia article:



			
				John Kelleher's Investopedia Article said:
			
		

> Countries left the gold standard in an effort to curb concerns about runs on federal gold supplies.



And that’s only half the insight.  The rest is that countries were not storing the reserves of gold that they claimed - they couldn’t be trusted to do so.



Duke of Marmalade said:


> Yes, Fiat does not have intrinsic value, though it is backed the debts of economic agents.



I meet plenty of Venezuelans and none of them tell me about the warm cosy feeling they get about the backing of the Bolivar with the ‘debts of economic agents’.
If the Euro was dissolved tomorrow, Ireland would return to the Punt Nua and as people’s euro’s were converted, their wealth would vapourise instantaneously as our sovereign currency would devalue against the Franc and the Deusche Mark.  I’m sure in that circumstance, AAM’ers can come back here and glory at your ‘debts of economic agents’ backing then!



Duke of Marmalade said:


> Nonetheless, our ancestors would be right to be vary wary of a money which had no intrinsic value.  That the concept survives and serves society so well in the main requires very careful management and oversight.



Within its time and place, FIAT currency has definitely served its purpose and will continue to do so.  However, it’s foolish to assume that people can rely on any currency to be ‘carefully managed’.  History has shown us that we can’t trust in that.

You said that FIAT money is not a store of value yet as per Kelleher's Investopedia article, it needs to be if it is to act as a decent currency:



			
				John Kelleher's Investopedia Article said:
			
		

> Currency is usable if it is a store of value, or, put differently, if it can reliably be counted on to maintain its relative value over time and without depreciating.



At best, ordinary people are being pick-pocketed through the ongoing inflation of FIAT currency.  At worst, their money is taken away from them or their wealth vapourised through mismanagement.



Duke of Marmalade said:


> If I ever do worry about the value of my humble Fiat holding, I reassure myself that there is a sophisticated machinery in place to support it.



There is…until the day that there isn’t!  Remember that Bitcoin (and FIAT) is to be assessed on a global basis.  We may have had relative stability currency-wise but past performance is not necessarily an indicator of future performance.  Of course, that’s also if you consider the Euro almost collapsing in 2012 stability…or speculation about how it’s going to navigate its way out of the current crisis.  Even if it finds its way, know that at any given time there are a list of FIAT currencies giving Bitcoin a mandate.



Duke of Marmalade said:


> Some day, soon, when Fiat has weathered its current storm and when the bitcoin speculators get burnt yet again the Satoshi will drop that there is no machinery in place to actually underpin its price.  It will then drop to earth like a stone.


Nostrodamos strikes again.

One other interesting thing Dukey is that you had difficulty in getting to grips with the characteristics of a store of value.  Here are Kelleher's characteristics of money:




Check out just how well Bitcoin scores against gold and FIAT in that context.

Best Articles to Understand Bitcoin
I have to say that I was impressed by Kelleher's article (and ironically, Dukey's recommendation) - it's even handed and thorough.  I'm going to start recommending it to the Bitcoin-curious.  My other default is Vijay Boyapati's medium article - which Dukey tried his best to critique but failed miserably.

Why Do Bitcoins Have Value - John P. Kelleher
The Bullish Case For Bitcoin - Vijay Boyapati


----------



## Leo

tecate said:


> Here are Kelleher's characteristics of money:



That's hilarious! So money must be smart / programmable or it's no good??? 

I'd also question anyone who thinks Bitcoin is easily transactable. How many companies in Ireland accept Bitcoin? Certainly none that I deal with here or abroad will accept Bitcoin, so it fails the easily transactable test for me.

I'd question the dollar only scoring a moderate for divisibility. How many times does anyone need to spend or transfer less than a cent??


----------



## tecate

Leo said:


> For quite a time bitcoin's price was closely correlated to Google search trends. More recently however it appears some may have been using this to affect the price in their favour.


You'll have to forgive my musings on this as it remains a mystery BUT could this be Brendan's approach to arriving at the fair price of gold?  Perhaps you have a calculation for that yourself Leo?


Firefly said:


> I must say I didn't have tecate down for a communist being a proponent of a no government "currency" such as Bitcoin.
> 
> It's Friday so a joke springs to mind......_"A communist walks into a bar with Bitcoin..."_


 Bitcoin doesn't discriminate - in fact, Bitcoin doesn't give a fiddlers if you are a communist, a statist or a right wing nut job. It can be used by anyone as it's preprogrammed and transparent.


----------



## Duke of Marmalade

tecate said:


> The article in its entirety is a good writeup in the consideration of Bitcoin.  Always the penchant to cherry pick, your Dukeness.  The entire article can be found here.  I’d encourage people to read the whole thing - not just Dukey’s highlights!


Yes the article is very favourable to bitcoin.  That is why I thought the selective quote which addresses directly the issue of medium of exchange vs store of value would be difficult for you to refute.



> Once again, see above.  There’s no delusion here…at least not on my part.  As mentioned, you cherry pick from the article.  Secondly, you disprove the point you are making as Gold doesn’t act as a medium of exchange yet it is very much a store of value.
> 
> Gold stands as the king in terms of store of value yet it’s not a medium of exchange.  Does that answer your question?


I am obviously very very bad at getting my point across.  Absolutely Gold is royalty in terms of store of value.  Real estate is not bad either.  But one is as bad as the other as a medium of exchange.  The key point about the extract from Kelleher is that he states that bitcoin's eventual status as a store of value stands or falls on its adoption as a medium of exchange.  It is IMHO grossly misleading to refer to it as digital gold as it would be to refer to it as digital real estate.
You seem to think that you have answered my question.  If so, I take it that you believe that bitcoin can ultimately survive as a store of value even if it continues to flop as a medium of exchange. Just like gold.  But in direct contradiction of the extract from Kelleher's piece which I posted.


----------



## tecate

Leo said:


> That's hilarious! So money must be smart / programmable or it's no good???


You've picked out one benchmark from the eleven he lists Leo.  My reading of it is that theyr'e all to be considered together - not isolating one.



Leo said:


> I'd also question anyone who thinks Bitcoin is easily transactable.


Insofar as it's peer to peer money - and doesn't involve an intermediary, then sure - it is.



Leo said:


> How many companies in Ireland accept Bitcoin? Certainly none that I deal with here or abroad will accept Bitcoin, so it fails the easily transactable test for me.


That's not what he's referring to.  If you had Bitcoin and someone agreed to accept it as payment, they could setup a Bitcoin wallet in 10 minutes and receive it.  You're referring to adoption - and he addresses that in the article.



Leo said:


> I'd question the dollar only scoring a moderate for divisibility. How many times does anyone need to spend or transfer less than a cent??


We're approaching the world of IoT and the machine to machine economy.  You'll get your answer with that.  You'll get your answer also with the onset of 'per-use' payment systems down to a per-second basis.


----------



## tecate

Duke of Marmalade said:


> Yes the article is very favourable to bitcoin.  That is why I thought the selective quote which addresses directly the issue of medium of exchange vs store of value would be difficult for you to refute.


By taking it out of context?  I don't think so Dukey.



Duke of Marmalade said:


> You seem to think that you have answered my question.  If so, I take it that you believe that bitcoin can ultimately survive as a store of value even if it continues to flop as a medium of exchange. Just like gold.  But in direct contradiction of the extract from Kelleher's piece which I posted.


Indeed I have answered your question - or rather - Kelleher has - if you take his article in it's entirely.  Gold is king as regards store of value yet gold cannot be used and is not used as a medium of exchange.  Bitcoin is already formative in the role of digital gold (or a store of value in its own right).  Further inroads as a medium of exchange will copper fasten its position.  With a steady decline in volatility, major advances in usability and improved understanding and ever greater acceptability, I expect Bitcoin to make further progress as a medium of exchange in the future also.


----------



## Leo

tecate said:


> You'll have to forgive my musings on this as it remains a mystery BUT could this be Brendan's approach to arriving at the fair price of gold? Perhaps you have a calculation for that yourself Leo?



Gold has utility, so I'd hope Brendan is factoring that into the equation. I haven't put time into coming up with an equation myself, there are just too many irrational variables to come up with a reliable model.


----------



## tecate

Leo said:


> Gold has utility, so I'd hope Brendan is factoring that into the equation.


Hmm...which equation precisely would this be?  As NOBODY has presented one.  As I write this, gold is at $1,737.75.  I wonder is it a steal at this price?  How am I to decide.  Surely there is a nice neat little formula?


----------



## Firefly

Leo said:


> Gold has utility, so I'd hope Brendan is factoring that into the equation. I haven't put time into coming up with an equation myself, there are just too many irrational variables to come up with a reliable model.


Since gold has been used for centuries by people for storing wealth is there really any point anyway.....gold is the king and the incumbent.


----------



## tecate

Firefly said:


> Since gold has been used for centuries by people for storing wealth is there really any point anyway.


That's an excellent point Firefly.  What I would say is that it's a case of everything in its time and place.  Gold has served us well and will continue to do so.

However, what if you could have all the qualities of gold and then some? What if you could have gold but with the ability to store it yourself, to transact it yourself on a peer to peer basis with no intermediary and the ability to use it as a medium of exchange?

Seems like something that's relevant for today's digital age.


----------



## Leo

tecate said:


> You've picked out one benchmark from the eleven he lists Leo.  My reading of it is that theyr'e all to be considered together - not isolating one.



In fairness, I called out a few of the traits as problematic. They don't seem to correlate with most people's understanding of what money is and are more weighted towards the characteristics of bitcoin/ crypto. 



tecate said:


> Insofar as it's peer to peer money - and doesn't involve an intermediary, then sure - it is.



Problem there is none of my peers use it, and I work in IT a group you'd think among the more likely to embrace crypto! Peer-to-peer is also a small share of total transactions. 



tecate said:


> That's not what he's referring to.  If you had Bitcoin and someone agreed to accept it as payment, they could setup a Bitcoin wallet in 10 minutes and receive it.  You're referring to adoption - and he addresses that in the article.



They could, but for many people that is not easy. Getting real money out of crypto isn't straightforward either with banks shutting down accounts or blocking transactions with exchanges. This seems to be focusing on what's theoretically possible then and not reality now or any time soon. For a large chunk of the world population it's about to get a lot more difficult as well if India pass the legislation they are working on to make it a criminal offence to trade in cryptos with a minimum 1 year jail term. 



tecate said:


> We're approaching the world of IoT and the machine to machine economy.  You'll get your answer with that.  You'll get your answer also with the onset of 'per-use' payment systems down to a per-second basis.



That doesn't make sense to me, and I work with IoT and microservices. Do you expect it ever to be economically viable for a company to invoice for a per-use service for less than 1c?  If not where's the value here? Why is the current model of rounding to the nearest cent broken?


----------



## Leo

tecate said:


> Hmm...which equation precisely would this be?



I don't know, you'd probably need to ask Brendan....I haven't been peaking at his notes


----------



## WolfeTone

Fella said:


> Your right though I struggle with recognising sarcasm and long form debates, I have mild autistic tendencies. So I'll be closing my account as to protect my over loading brain.



I tried it recently, transpires I just needed a break from online activity. 
I have had somewhat of a chequered past on AAM. Believe it or not, some posters actually campaigned to have me banned, _twice! _
You can guess how that worked out. 

Stick around, your views are respected in this quarter, and obviously from others too.


----------



## tecate

Leo said:


> In fairness, I called out a few of the traits as problematic. They don't seem to correlate with most people's understanding of what money is and are more weighted towards the characteristics of bitcoin/ crypto.


We're increasingly going toward an ever digital future Leo.  Surely if those things present as sound characteristics for money, they should be included?  Just because they didn't exist as characteristics back in the day shouldn't preclude their consideration.



Leo said:


> Problem there is none of my peers use it, and I work in IT a group you'd think among the more likely to embrace crypto! Peer-to-peer is also a small share of total transactions.


Ok, but in what context is this being tackled?  Kelleher is right that Bitcoin can be transacted simply from one party to another (without intermediation).  That is a characteristic.  That there is little adoption as a means of exchange is separate from the actual characteristic.  Notwithstanding that, he addresses that lack of adoption as a medium of exchange.  So have I here on many occasions.  To me, it's store of value use case first - then means of exchange but only if innovators work on improving usability and second layer solutions like Lighning Network actually come through.


Leo said:


> They could, but for many people that is not easy. Getting real money out of crypto isn't straightforward either with banks shutting down accounts or blocking transactions with exchanges. This seems to be focusing on what's theoretically possible then and not reality now or any time soon. For a large chunk of the world population it's about to get a lot more difficult as well if India pass the legislation they are working on to make it a criminal offence to trade in cryptos with a minimum 1 year jail term.


Your point stands but bear in mind he's referring to a characteristic - so as a characteristic its valid too.  He's looking at fundamentals.
We've discussed the issue of getting money in and out of crypto - and as I mentioned before, for sure - you're quite right - it's a difficulty.  However, as I mentioned to you the last day, day by day I become more comfortable with the notion of not having to and not wanting to.  People are never going to be 'all-in' on crypto.  We all inherited a FIAT world - so of course people will have both.  Who's to say that they're not comfortable with leaving a portion of their funds within crypto?
Let me qualify that.  I'm not talking about having large holdings of Bitcoin.  You can of course invest in/buy/earn Bitcoin but you don't have to be exposed to the volatility that (currently) comes with it.  Over the course of the past few months, there have been billions added to the overall stablecoin balance sheet - largely by people who have no other interest in crypto.  They just want to get in to dollars as there's a shortage of Euro-dollars.  Some of them also want to escape volatility in their own sovereign currencies and get some of their capital out of the local system.
In tandem with all of that, I'm trying to watch closely the Ethereum-driven DeFi space and the savings products that are coming out of that.  To me, all that is far too risky right now but I'm sure they'll work it out.  If you have access to all of that - and its functional - who needs to take it out of that eco-system (if it doesn't represent ALL of a persons funds)?
Other than that, products will develop to assist with the gap where crypto meets FIAT.  There are a multitude of credit and debit cards available now that are targetted exclusively at that market.
As regards government action, as we discussed recently I'm in agreement that we will see pushback.  We've already been through the preliminary rounds of it.  Governments have already flip flopped their position on it as they don't know how to handle it.  There will be more of that for years to come - that's guaranteed.  You cite India as an example and that's interesting as just a few weeks ago, they rolled back positively towards crypto, instructing their banks to bank crypto companies having taken a harder line before that.



Leo said:


> That doesn't make sense to me, and I work with IoT and microservices. Do you expect it ever to be economically viable for a company to invoice for a per-use service for less than 1c?  If not where's the value here? Why is the current model of rounding to the nearest cent broken?


Well, right now, it's not cost effective to transact micro-payments.  Visa/conventional means can't support that (largely due to fees).  In fairness, it remains to be seen if Bitcoin can do any better as with LN, there will still be fees.  It could be left to a truly fee-less cryptocurrency to tackle that.
But in answer to your question, do I think there will be gazillions of micro-transactions in the near future?  Absolutely.  Year on year, gazillions of IoT devices are being rolled out.  With that, they're going to be collecting valuable data.  Lets say you have a digital wallet in a car for example.  The car can collect data about pot holes or traffic, etc.  That data on an individual basis would be worth little - but over an entire car fleet, its a lot - and the power of it is a beautiful thing.  That data can be sold and the same digital wallet could be used for different things. eg. car passes through toll and the digital wallet pays toll fee automatically with the very same crypto.



Leo said:


> I don't know, you'd probably need to ask Brendan....I haven't been peaking at his notes


I guess it will be Christmas before we know it - who knows what gifts that might bring.  I'm ever the optimist.


----------



## WolfeTone

Duke of Marmalade said:


> The great silver lining of the 30s depression was the recognition that money did not need the backing of physical gold.



I see _tecate _has already pulled you up on this so I wont elaborate too much. But this type of revisionism needs to checked in the context of the overall discussion. 
The reality is that the US got used to a monetary system that facilitated exorbitant privilege for their economy. So much so that when the plundering indulgences of successive American administrations were called to task by emerging economic powerhouses like France, Germany and Japan, rather than buckle down and compete on a level playing field, the US simply abandoned the rules and changed the nature of the game. 
As US economist Barry Eichengreen said "_It costs only a few cents for the Bureau of Engraving and Printing to produce a $100 bill, but other countries had to pony up $100 of actual goods in order to obtain one"_
In fairness to the Americans, it was only human nature how they acted. I suspect most countries in their position would have done much the same. 
If only there was a monetary system available that was separate and trustworthy to all this political interference. Any ideas anyone?


----------



## Firefly

tecate said:


> We're increasingly going toward an ever digital future


Apple Pay / Google Pay, Stripe, PayPal etc etc. 

Even the trusty tap&go at my local supermarket has this kinda covered has it not?


----------



## Duke of Marmalade

tecate said:


> Indeed I have answered your question - or rather - Kelleher has - if you take his article in it's entirely.  Gold is king as regards store of value yet gold cannot be used and is not used as a medium of exchange.  Bitcoin is already formative in the role of digital gold (or a store of value in its own right).  Further inroads as a medium of exchange will copper fasten its position.  With a steady decline in volatility, major advances in usability and improved understanding and ever greater acceptability, I expect Bitcoin to make further progress as a medium of exchange in the future also.


Oh dear, you are back in politician mode.  I don't see that as an answer. Do you agree with the following assertion by Kelleher, Yes or No?


			
				Kelleher said:
			
		

> Bitcoin's utility as a store of value is dependent on its utility as a medium of exchange. We base this in turn on the assumption that for something to be used as a store of value it needs to have some intrinsic value, and if Bitcoin does not achieve success as a medium of exchange, it will have no practical utility and thus no intrinsic value and won't be appealing as a store of value.


----------



## Duke of Marmalade

Leo said:


> That's hilarious! So money must be smart / programmable or it's no good???
> 
> I'd also question anyone who thinks Bitcoin is easily transactable. How many companies in Ireland accept Bitcoin? Certainly none that I deal with here or abroad will accept Bitcoin, so it fails the easily transactable test for me.
> 
> I'd question the dollar only scoring a moderate for divisibility. How many times does anyone need to spend or transfer less than a cent??


Leo this is what Mr Kelleher says about "divisibility":


			
				Kelleher said:
			
		

> *2) Divisibility*
> 21 million Bitcoins is vastly smaller than the circulation of most fiat currencies in the world. Fortunately, Bitcoin is divisible up to 8 decimal points. The smallest unit, equal to 0.00000001 Bitcoin, is called a "Satoshi" after the pseudonymous developer behind the cryptocurrency. This allows for quadrillions of individual units of Satoshis to be distributed throughout a global economy.
> 
> One bitcoin has a much larger degree of divisibility than the U.S. dollar as well as most other fiat currencies. While the U.S. dollar can be divided into cents, or 1/100 of 1 USD, one "Satoshi" is just 1/100,000,000 of 1 BTC. It is this extreme divisibility which makes bitcoin's scarcity possible; if bitcoin continues to gain in price over time, users with tiny fractions of a single bitcoin can still take part in everyday transactions. Without any divisibility, a price of, say, $1,000,000 for 1 BTC would prevent the currency being used for most transactions.


 Jayz!  You would think the divisibility of bitcoin was on a par with the invention of the microchip.


----------



## tecate

WolfeTone said:


> I see _tecate _has already pulled you up on this so I wont elaborate too much. But this type of revisionism needs to checked in the context of the overall discussion.
> The reality is that the US got used to a monetary system that facilitated exorbitant privilege for their economy. So much so that when the plundering indulgences of successive American administrations were called to task by emerging economic powerhouses like France, Germany and Japan, rather than buckle down and compete on a level playing field, the US simply abandoned the rules and changed the nature of the game.
> As US economist Barry Eichengreen said "_It costs only a few cents for the Bureau of Engraving and Printing to produce a $100 bill, but other countries had to pony up $100 of actual goods in order to obtain one"_
> In fairness to the Americans, it was only human nature how they acted. I suspect most countries in their position would have done much the same.
> If only there was a monetary system available that was separate and trustworthy to all this political interference. Any ideas anyone?


Excellent point Wolfie.  You're referring of course to the US having installed itself with the USD as global reserve currency and the entitlement that brings the US at a cost to all others.  There's been a lot of pushback on this over recent years from the Russians, Chinese and Europeans.  Ray Dalio referenced this recently in terms of his consideration of a new world order.  Things go in cycles. 
The Chinese are going to try and gain the upper hand with their new digital currency (DCEP).  However, Wolfie is quite right - a neutral transparent digital currency would be more equitable in the role (not that I'm saying that's how it will pan out).


Firefly said:


> Apple Pay / Google Pay, Stripe, PayPal etc etc.
> Even the trusty tap&go at my local supermarket has this kinda covered has it not?


Another valid point - but they're materially different.  They all involve an intermediary.  They also involve considerable fees.  Bitcoin is peer to peer money.  On the fees front, it's not at the races right now for a medium of exchange but that may change.


Duke of Marmalade said:


> Oh dear, you are back in politician mode.  I don't see that as an answer.


You have your answer - it's just that you don't like that answer.



Duke of Marmalade said:


> Do you agree with the following assertion by Kelleher, Yes or No?


I don't agree with you taking things out of context.  As has already been pointed out to you, Kelleher acknowledges that gold has established itself as a store of value without being (or being able to be) a medium of exchange.  If gold can do it, why can't Bitcoin?


----------



## Duke of Marmalade

tecate said:


> I don't agree with you taking things out of context.


OMG you definitely missed your vocation


----------



## tecate

Duke of Marmalade said:


> Leo this is what Mr Kelleher says about "divisibility":
> Jayz!  You would think the divisibility of bitcoin was on a par with the invention of the microchip.


So the concept is simple but its foolish to dismiss it on that basis as it's also powerful.  It's so powerful as to mean that gold cant be a medium of exchange.  Bitcoins strength in terms of its divisibility means that as this progresses we might move from dicussion of the price of a Bitcoin as a unit to the discussion of the unit price of a Satoshi.

Bitcoin doesn't appear to be high tech but it doesn't have to be as what it does provide is a technology of trust - and that's powerful.


----------



## tecate

Duke of Marmalade said:


> OMG you definitely missed your vocation


Compliments are hard to come by in this partisan corner of the interweb so I'll take that one for the win!  Thank you your Dukeness


----------



## Duke of Marmalade

tecate said:


> So the concept is simple but its foolish to dismiss it on that basis as it's also powerful.  It's so powerful as to mean that gold cant be a medium of exchange.  Bitcoins strength in terms of its divisibility means that as this progresses we might move from dicussion of the price of a Bitcoin as a unit to the discussion of the unit price of a Satoshi.
> 
> Bitcoin doesn't appear to be high tech but it doesn't have to be as what it does provide is a technology of trust - and that's powerful.


You really think that is a big plus for bitcoin?  And you say you are not a cultist.   Sure divisibility is an essential requirement for a functioning currency but it represents no challenge at all for Fiat - why the moderate rating?  If for some bizarre reason the cent is not small enough for practical purposes there would be no problem in introducing the tecate with 1 cent = 10 tecates or 100 or 1000, whatever.


----------



## tecate

Duke of Marmalade said:


> And you say you are not a cultist.


You show signs of an ability to partake in an adult discussion - can you please put this inaccurate and nonsensical terminology in the Lego bucket as it has no place here!



Duke of Marmalade said:


> You really think that is a big plus for bitcoin?   Sure divisibility is an essential requirement for a functioning currency but it represents no challenge at all for Fiat - why the moderate rating?  If for some bizarre reason the cent is not small enough for practical purposes there would be no problem in introducing the tecate with 1 cent = 10 tecates or 100 or 1000, whatever.


I think that it is an essential characteristic of a means of exchange/currency, yes.  In this case, it invalidates gold completely.  In the case of FIAT, sure it scores well.  However, Satoshi could see that this is fixed supply currency and that there would be a need for eight places of decimal.  There's no need for eight places of decimal with FIAT when they just print the stuff off like its going out of fashion.



Duke of Marmalade said:


> introducing the tecate with 1 cent = 10 tecates or 100 or 1000, whatever


It's the weekend and I agree that we should introduce the 'Tecate' at this point ->


----------



## Duke of Marmalade

It really is perverse that Kelleher gives bitcoin the edge over fiat for divisibility.  Does he not realise that these days fiat is every bit as digital as any crypto.  But he actually points to a minor advantage for fiat that was not on his long list.  I would call it "emergency fall back feature".  By this I mean having a few notes and coins in your pocket, just in case there is a power cut or you want to drop a few bob in the old man's hat or the SVP box or you want to give a discrete tip to the waitress or you want to give the grandchildren something for a few sweets.  Admittedly you would have to restrict your transaction to a whole number of cents in these situations.


----------



## tecate

Duke of Marmalade said:


> It really is perverse that Kelleher gives bitcoin the edge over fiat for divisibility.


I don't think from a pro-FIAT point of view, it's something to get animated about.  In isolation, it's a small difference between FIAT and bitcoin. For gold, it's a deal breaker for a medium of exchange use case.



Duke of Marmalade said:


> But he actually points to a minor advantage for fiat that was not on his list.  I would call it "emergency fall back feature".  By this I mean having a few notes and coins in your pocket, just in case there is a power cut or you want to drop a few bob in the old man's hat or the SVP box or you want to give a discrete tip to the waitress.  Admittedly you would have to restrict your transaction to a whole number of cents in these situations.


Bitcoin can be transacted via satellite.  It can be transacted via text message also.  When mesh networks become more popular, it will be even more robust still (but that's a while off).  Tips can be given in Bitcoin - via an app on your phone and flashing a QR code.  
If we are going to have prolonged outages of electricity beyond what a genny can provide us with, lets just say we're into bigger problems and it won't be cash or bitcoin that we will need but guns.


----------



## Duke of Marmalade

tecate said:


> I don't think from a pro-FIAT point of view, it's something to get animated about.  In isolation, it's a small difference between FIAT and bitcoin. For gold, it's a deal breaker for a medium of exchange use case.
> 
> 
> Bitcoin can be transacted via satellite.  It can be transacted via text message also.  When mesh networks become more popular, it will be even more robust still (but that's a while off).  Tips can be given in Bitcoin - via an app on your phone and flashing a QR code.
> If we are going to have prolonged outages of electricity beyond what a genny can provide us with, lets just say we're into bigger problems and it won't be cash or bitcoin that we will need but guns.


I was just saying that fiat had a minor edge over bitcoin in being available in notes and coins.  An edge (amongst others like Cognizability) that was not in the long list.


----------



## Leo

tecate said:


> We're increasingly going toward an ever digital future Leo.  Surely if those things present as sound characteristics for money, they should be included?  Just because they didn't exist as characteristics back in the day shouldn't preclude their consideration.



I thought he was talking in present tense? ~99% of my current transactions are digital, bitcoin doesn't give me anything new, in fact it just reduces my options.



tecate said:


> Ok, but in what context is this being tackled?  Kelleher is right that Bitcoin can be transacted simply from one party to another (without intermediation).



I'd imagine the vast majority of the population would not consider it simple. 



tecate said:


> You cite India as an example and that's interesting as just a few weeks ago, they rolled back positively towards crypto, instructing their banks to bank crypto companies having taken a harder line before that.



Note that this is not the Indian government changing their mind, the earlier roll-back was instigated by a Supreme Court ruling the previous restrictions weren't backed by law. So now they're implementing law to enforce their position. 



tecate said:


> Well, right now, it's not cost effective to transact micro-payments.  Visa/conventional means can't support that (largely due to fees).



And I can push a $0.0001 transaction through Bitcoin without fees? Regardless, you're missing the point. I meant the cost to business in selling products or billing services at $0.001. I'd be confident no person or business will ever need to transact at that level, and so touting bitcoin as being massively divisible is pushing a characteristic that offers zero value.



tecate said:


> But in answer to your question, do I think there will be gazillions of micro-transactions in the near future?  Absolutely.  Year on year, gazillions of IoT devices are being rolled out.  With that, they're going to be collecting valuable data.  Lets say you have a digital wallet in a car for example.  The car can collect data about pot holes or traffic, etc.  That data on an individual basis would be worth little - but over an entire car fleet, its a lot - and the power of it is a beautiful thing.  That data can be sold and the same digital wallet could be used for different things. eg. car passes through toll and the digital wallet pays toll fee automatically with the very same crypto.



People give up traffic and LA maintenance issues free at the moment, so I don't foresee anyone paying for that. But leaving the specific example aside, there are already micro reward services that pay users for visiting sites, watching ads, etc., they all manage by building the credits to a point where something of real value is built up. With bitcoin's scaling issues, it certainly won't be the crypto of choice for anything involving that magnitude of transactions.


----------



## Leo

Duke of Marmalade said:


> Leo this is what Mr Kelleher says about "divisibility":



 So it's handy for deflationary purposes. It's really scarce, but we built in a mechanism to get around that...


----------



## Duke of Marmalade

Leo said:


> So it's handy for deflationary purposes. It's really scarce, but we built in a mechanism to get around that...


That is an excellent point.  Scarcity does not arise at all when the real number line is a continuum.  There are in fact 21 by 10 to the power of 16 Satoshis. That is an enormous number.  So stop shouting about scarce supply and start talking about limited supply.


----------



## tecate

Duke of Marmalade said:


> I was just saying that fiat had a minor edge over bitcoin in being available in notes and coins.  An edge (amongst others like Cognizability) that was not in the long list.


It's a minor edge for sure given that if we're without electricity for extended periods, it's guns that will be needed - not cash or Bitcoin.  So the well researched piece that you relied upon to build your pro-FIAT argument doesn't work for you  now?  I guess that's why you didn't link to it - and just cherry picked the piece that was supportive of your world view, right?



Leo said:


> I thought he was talking in present tense?


I'm not sure what the issue is?  He has included a few categories that FIAT and gold can't possibly score well with (as they have their foundations rooted in an analog time).   But if you check those fundamentals, they're legitimate in terms of what would make a decent medium of exchange.



Leo said:


> 99% of my current transactions are digital


No problem Leo - then don't use it    There's plenty of us on the planet that see the value in decentralised, permissionless, censorship resistant money though.



Leo said:


> bitcoin doesn't give me anything new


You mean you don't see any value in the new features it does bring.  That's a bit different.  And that's ok - you don't have to use it but its there for you if you ever do want to use it.



Leo said:


> in fact it just reduces my options.


How do you figure that one?  You have the current options that you currently profess to be more than happy with.  You have no interest in using Bitcoin - that's fine.  How does that in any way reduce your options given that it's optional whether you use it or not?



Leo said:


> I'd imagine the vast majority of the population would not consider it simple.


And I'd imagine if you were first introduced to a bank today - and never heard of it or how it worked, it would seem complicated.  If you can install an app on your phone, I can send you Bitcoin.
When it comes to the storing of significant amounts of crypto, it does need a better UX but that will come through in due course.



Leo said:


> Note that this is not the Indian government changing their mind, the earlier roll-back was instigated by a Supreme Court ruling the previous restrictions weren't backed by law. So now they're implementing law to enforce their position.


Good luck to them (not because I actually wish them good luck - because they'll need it if they think they can smother crypto so easily).



Leo said:


> And I can push a $0.0001 transaction through Bitcoin without fees?


Dabbling in the rhetorical I see (given that I myself said that fees could still be an obstacle at that micro-level).  Again, like I said, we'll have to see how LN fees pan out.  If not, there's a crypto that's feeless that will do the job quite nicely.



Leo said:


> I meant the cost to business in selling products or billing services at $0.001. I'd be confident no person or business will ever need to transact at that level, and so touting bitcoin as being massively divisible is pushing a characteristic that offers zero value.


In an automated machine to machine environment (IoT sensors), sure they will.  If you're talking billions of sensors and repeated data points, then it's far more significant than you've considered it to be.



Leo said:


> People give up traffic and LA maintenance issues free at the moment, so I don't foresee anyone paying for that. But leaving the specific example aside, there are already micro reward services that pay users for visiting sites, watching ads, etc., they all manage by building the credits to a point where something of real value is built up. With bitcoin's scaling issues, it certainly won't be the crypto of choice for anything involving that magnitude of transactions.


On the first part, I believe you misunderstand.  Facebook, google and others we may be giving data away to - but in the not too distant future, personal data will be under our own control and it will be up to ourselves if we want to sell aspects of it. In terms of the example I gave, I'm talking about something that's completely automated.  And I agree - as I mentioned from the outset - it's likely that another crypto will handle this type of stuff.



Leo said:


> So it's handy for deflationary purposes. It's really scarce, but we built in a mechanism to get around that...





Duke of Marmalade said:


> That is an excellent point.  Scarcity does not arise at all when the real number line is a continuum.  There are in fact 21 by 10 to the power of 16 Satoshis. That is an enormous number.  So stop shouting about scarce supply and start talking about limited supply.



 Honestly, if you can't figure out the difference between scarcity/fixed supply and divisibility, you really have my sympathies!


----------



## Duke of Marmalade

tecate said:


> Honestly, if you can't figure out the difference between scarcity/fixed supply and divisibility, you really have my sympathies!


Don’t be so prickly.  This is not a damning assault on bitcoin but Leo has pointed to what will surely be a case study in market psychology.
The only unit of physical significance  is the smallest one, anything else is just packaging.  This is especially so if the currency has no intrinsic link or previous history.  Satoshi decided that his currency would have 2,100 Trillion units, now called satoshis.  Now fiat usually bundles its smallest unit into 100s.  Satoshi could even have decided to package the whole lot as 1 bitcoin, wouldn’t make any difference of substance. He chose instead to package them in bundles of 100 million.  Certainly by fiat standards it looks a bit OTT but as I said not a fatal condemnation of the construct.

Kelleher talks in terms of 21 million bitcoins being a very small number but by the miracle of the blockchain technology it is capable of being split into 100 million pieces each.  This is junior infants stuff.


----------



## Duke of Marmalade

tecate said:


> It's a minor edge for sure given that if we're without electricity for extended periods, it's guns that will be needed - not cash or Bitcoin.


I mentioned several everyday uses for notes and coin including the odd electricity outage.  You have twisted this into an Armageddon point which I presume you think is a slam dunk riposte but anybody watching will surely find it bemusing.
Whist we are on Armageddon, you are fond of reminding us of the possibility of the dollar or euro doing a Zimbabwe/Venezuala/Lebanon.  Do you really think that in that scenario you will be able to smugly lie in your bed at night with your bitcoin wallet under your pillow?


----------



## WolfeTone

Duke of Marmalade said:


> Now fiat usually bundles its smallest unit into 100s.



Yes, but what does fiat bundle its largest units into? Well, currently its trillions, and tens of them too.
So yes, satoshi could have limited bitcoin to one single unit, which would be priced at $160bn today. And for small punters like myself, the term 'satoshis' would be more prominent in the general lexicon discussion of bitcoin, rather than 'bitcoin' itself - eg 'I bought 10,000 satoshi today', rather than '...0.00010000 bitcoin'.
The satoshi lexicon hasn't really emerged yet and I do wonder if bitcoin had been set at one single unit, now priced at $160bn, would  bitcoin actually draw more traction and momentum from the mass population by virtue of such a colossal price? Bitcoin price is $160bn is certainly more head turning headline than $9,000.

Instead its a meagre $9000, which although no small change for most people, does not really catch the imagination of the mass population who, as has been pointed out, are broadly indifferent to bitcoin.
However,  is a long-game being played out here? The problems with the bitcoin network have been highlighted and the innovations to tackle those problems, we are told, are under development. Confidence in finding solutions is reflective in its price, in my opinion. If solutions do not emerge, then over time, bitcoin will return to its ultimate destination. If solutions do emerge, then the scope within the bitcoin unit of measurement to grow exponentially throughout the mass population is massive.


----------



## Duke of Marmalade

WolfeTone said:


> Yes, but what does fiat bundle its largest units into? Well, currently its trillions, and tens of them too.
> So yes, satoshi could have limited bitcoin to one single unit, which would be priced at $160bn today. And for small punters like myself, the term 'satoshis' would be more prominent in the general lexicon discussion of bitcoin, rather than 'bitcoin' itself - eg 'I bought 10,000 satoshi today', rather than '...0.00010000 bitcoin'.
> The satoshi lexicon hasn't really emerged yet and I do wonder if bitcoin had been set at one single unit, now priced at $160bn, would  bitcoin actually draw more traction and momentum from the mass population by virtue of such a colossal price? Bitcoin price is $160bn is certainly more head turning headline than $9,000.
> 
> Instead its a meagre $9000, which although no small change for most people, does not really catch the imagination of the mass population who, as has been pointed out, are broadly indifferent to bitcoin.
> However,  is a long-game being played out here? The problems with the bitcoin network have been highlighted and the innovations to tackle those problems, we are told, are under development. Confidence in finding solutions is reflective in its price, in my opinion. If solutions do not emerge, then over time, bitcoin will return to its ultimate destination. If solutions do emerge, then the scope within the bitcoin unit of measurement to grow exponentially throughout the mass population is massive.


Well at least you see Leo's point.  The whole bitcoin thing is a fascinating insight into human psychology.  How significant is the arbitrary choice of bitcoin's bundle of primary units.  100 million was chosen.  Would we have had a different price trajectory if it it had been 100, 10000, 1m?  It all goes back to one fundamental.  Bitcoin is not cognizable i.e. there is no clear look through to its value.  I wonder what Satoshi had in mind.  What was his/her target $ price for bitcoin?  I doubt it was $9,000.


----------



## tecate

Duke of Marmalade said:


> Kelleher talks in terms of 21 million bitcoins being a very small number but by the miracle of the blockchain technology it is capable of being split into 100 million pieces each.  This is junior infants stuff.


You're now trying to suggest that it isn't scarce on the basis of divisibility.  If that was the case, why do both scarcity and divisibility show up as fundamental characteristics of money - according to the Federal Reserve and others?
Divisibility does not undo scarcity.



Duke of Marmalade said:


> I mentioned several everyday uses for notes and coin including the odd electricity outage.  You have twisted this into an Armageddon point which I presume you think is a slam dunk riposte but anybody watching will surely find it bemusing.


The power outage scenario was the only one you mentioned where cash has an advantage.  What else did you mention in this context?



Duke of Marmalade said:


> but anybody watching will surely find it bemusing.


What sort of childish nonsense is this?



Duke of Marmalade said:


> you are fond of reminding us of the possibility of the dollar or euro doing a Zimbabwe/Venezuala/Lebanon.  Do you really think that in that scenario you will be able to smugly lie in your bed at night with your bitcoin wallet under your pillow?


Are you talking in terms of security?  If so, then absolutely.  So, you have cash under your pillow - someone can come in and wrestle it out of your hands.  In contrast, you could have a Bitcoin wallet with the flexibility to have it secured by as many as 15 key holders and you can configure it as to whether 1 or 15 (or any number in between) keys are needed to unlock that wallet.  Those 15 keyholders could be anywhere geographically.  Someone can come in and suspect you have Bitcoin - 'persuade' the private key out of you - but the wallet will be looking for another X number of private keys - which that individual doesn't have. 



Duke of Marmalade said:


> It all goes back to one fundamental.  Bitcoin is not cognisable


You're talking about the very last step.  I'm sure there are many FIAT currencies around the world that are not cognizable to you because you don't use them as a medium of exchange or unit of account.  Cognisability is a function of 'unit of account'.  An incumbent will always have cognisability.



Duke of Marmalade said:


> What was his/her target $ price for bitcoin?  I doubt it was $9,000.


I doubt it too - why would there be 8 places of decimal otherwise.


----------



## WolfeTone

Duke of Marmalade said:


> The whole bitcoin thing is a fascinating insight into human psychology.



It certainly is.



Duke of Marmalade said:


> Would we have had a different price trajectory if it it had been 100, 10000, 1m?



I would suggest yes most definitely, but will refrain from even guessing what that trajectory would have been.



Duke of Marmalade said:


> Bitcoin is not cognizable i.e. there is no clear look through to its value.



The price/value argument of what is value, how to price etc can be trashed out infinitely, so rather than re-hash it all, I will set out my reasoning for value and applying a price to that value.

From my own perspective I use my record collection analogy. I place a high value on my record collection and price that value at €10K+ using a formula containing the amount of time and money I have spent on collecting, the overall condition of the records, mixed with huge dollop of nostalgia.
I do this full in the knowledge that a second hand record trader would probably part no more than €250, at best, for the entire collection -  he using a basic formula of time, effort and potential profit.
My wife will pay someone €50 to take the whole lot away - using a simple formula of the extra space in the attic having greater utility than being occupied with my records.

That's three different valuations, using three different formulas, resulting in three different prices, for the exact same thing.
If the only participants in the market for my record collection were me, the second hand retailer and my wife, the market wouldn't function.
But if millions of people were engaged, record collectors, traders etc, a market could emerge with each buyer/seller applying a price based on their own formula to value merchandise. An overall market emerges with buyers and sellers at any given price _and prospective_ _buyers_ _and_ _sellers_ gauging whether the market price is too high or too low.

So with that, do I see value in bitcoin? Yes, I do. For the primary reason that I think the concept of being able to store money outside of the prevailing monetary system, not being manipulated by central banks or governments, is a brilliant, genius idea.
Not because I think bitcoin will take over the world, not because im anti-central bank, anti-government, but because I know for a fact, that those said institutions have a history of manipulating their own monetary and financial systems (human nature). It is my view, that such manipulation and fraud has real potential (increasingly so) to fundamentally undermine the confidence and trustworthiness of the system.
Bitcoin, to me, has a greater prospect as acting as a bulwark against financial fraud and manipulation in the central bank monetary system rather than the "its great for criminals" tabloid stories we hear about.
I also see some value in it being used, potentially, as a medium of exchange (in a widely and generally accepted way), but less and less so.

So money stored outside monetary system + manipulation inside of monetary system (human nature) + potential use as a generally accepted medium of exchange = value.

The price I place on that, if bitcoin realises its full potential is massive. Far greater than where we are today.
That said, it is of course speculative. If the solutions for the network fail to emerge, if another network eclipses it, if the internet gets switched off! etc...then it could go back to zero.
But as it stands it does have value, and I speculate that the price currently applied to that value is cheap.


----------



## Duke of Marmalade

tecate said:


> You're now trying to suggest that it isn't scarce on the basis of divisibility.  If that was the case, why do both scarcity and divisibility show up as fundamental characteristics of money - according to the Federal Reserve and others?
> Divisibility does not undo scarcity.


If bitcoin was 100 satoshis like conventional currencies there would be 21 Trillion of them.  I doubt it would be marketed as "scarce" though.  If bitcoin was 2,100 Trillion satoshis it would be as scarce as the Taj Mahal.  Yet nothing whatsosever would be different, other than simply the name calling.  I am not trashing bitcoin on this count, but I am questioning whether scarce is a suitable description.  Ironically it does have an edge over Gold in this space - we know its *Limit*.  Gold is scarce but we do not know its limit.  Somehow scarce sounds more sexy than limited.


> The power outage scenario was the only one you mentioned where cash has an advantage.  What else did you mention in this context?





			
				DoM said:
			
		

> By this I mean having a few notes and coins in your pocket, just in case there is a power cut or you want to drop a few bob in the old man's hat or the SVP box or you want to give a discrete tip to the waitress or you want to give the grandchildren something for a few sweets.


I said it was a minor point but it was conspicuous by its absence from a long list.


> Are you talking in terms of security?  If so, then absolutely.  So, you have cash under your pillow - someone can come in and wrestle it out of your hands.  In contrast, you could have a Bitcoin wallet with the flexibility to have it secured by as many as 15 key holders and you can configure it as to whether 1 or 15 (or any number in between) keys are needed to unlock that wallet.


If you think your bitcoin wallet will be of value "with the world in a grave" (Barry Maguire: Eve of Destruction)  that does go some way to explain your passion for it.


----------



## Duke of Marmalade

WolfeTone said:


> It certainly is.
> 
> 
> 
> I would suggest yes most definitely, but will refrain from even guessing what that trajectory would have been.
> 
> 
> 
> The price/value argument of what is value, how to price etc can be trashed out infinitely, so rather than re-hash it all, I will set out my reasoning for value and applying a price to that value.
> 
> From my own perspective I use my record collection analogy. I place a high value on my record collection and price that value at €10K+ using a formula containing the amount of time and money I have spent on collecting, the overall condition of the records, mixed with huge dollop of nostalgia.
> I do this full in the knowledge that a second hand record trader would probably part no more than €250, at best, for the entire collection -  he using a basic formula of time, effort and potential profit.
> My wife will pay someone €50 to take the whole lot away - using a simple formula of the extra space in the attic having greater utility than being occupied with my records.
> 
> That's three different valuations, using three different formulas, resulting in three different prices, for the exact same thing.
> If the only participants in the market for my record collection were me, the second hand retailer and my wife, the market wouldn't function.
> But if millions of people were engaged, record collectors, traders etc, a market could emerge with each buyer/seller applying a price based on their own formula to value merchandise. An overall market emerges with buyers and sellers at any given price _and prospective_ _buyers_ _and_ _sellers_ gauging whether the market price is too high or too low.
> 
> So with that, do I see value in bitcoin? Yes, I do. For the primary reason that I think the concept of being able to store money outside of the prevailing monetary system, not being manipulated by central banks or governments, is a brilliant, genius idea.
> Not because I think bitcoin will take over the world, not because im anti-central bank, anti-government, but because I know for a fact, that those said institutions have a history of manipulating their own monetary and financial systems (human nature). It is my view, that such manipulation and fraud has real potential (increasingly so) to fundamentally undermine the confidence and trustworthiness of the system.
> Bitcoin, to me, has a greater prospect as acting as a bulwark against financial fraud and manipulation in the central bank monetary system rather than the "its great for criminals" tabloid stories we hear about.
> I also see some value in it being used, potentially, as a medium of exchange (in a widely and generally accepted way), but less and less so.
> 
> So money stored outside monetary system + manipulation inside of monetary system (human nature) + potential use as a generally accepted medium of exchange = value.
> 
> The price I place on that, if bitcoin realises its full potential is massive. Far greater than where we are today.
> That said, it is of course speculative. If the solutions for the network fail to emerge, if another network eclipses it, if the internet gets switched off! etc...then it could go back to zero.
> But as it stands it does have value, and I speculate that the price currently applied to that value is cheap.


_Wolfie_ I am always a tad nervous in engaging with you given your penchant for popping up in various aliases.
That was an amusing allegory about your record collection and I see the point you are making.
More pertinently you do not seem to agree with the following:


			
				Kelleher said:
			
		

> Bitcoin's utility as a store of value is dependent on its utility as a medium of exchange. We base this in turn on the assumption that for something to be used as a store of value it needs to have some intrinsic value, and if Bitcoin does not achieve success as a medium of exchange, it will have no practical utility and thus no intrinsic value and won't be appealing as a store of value.


In case you haven't been following the story so far.  Kelleher is a big fan of bitcoin, albeit somewhat biased as evidenced by his long list of requirements for a currency which was heavily tilted in favour of the crypto.
I agree 100% with the above assertion by Kelleher.  I am not sure where _tecate _stands on it as he will not answer the point "out of context".


----------



## tecate

Duke of Marmalade said:


> If bitcoin was 100 satoshis like conventional currencies there would be 21 Trillion of them.  I doubt it would be marketed as "scarce" though.  If bitcoin was 2,100 Trillion satoshis it would be as scarce as the Taj Mahal.  Yet nothing whatsosever would be different, other than simply the name calling.  I am not trashing bitcoin on this count, but I am questioning whether scarce is a suitable description.  Ironically it does have an edge over Gold in this space - we know its *Limit*.  Gold is scarce but we do not know its limit.  Somehow scarce sounds more sexy than limited.


There's no end to the absurdity.  I've never seen such a claim anywhere else before - more media interview potential for AAM nocoiner-naysayers.
I'll say it again - divisibility does not undo scarcity.



Duke of Marmalade said:


> If you think your bitcoin wallet will be of value "with the world in a grave" (Barry Maguire: Eve of Destruction)  that does go some way to explain your passion for it.


What are you talking about?  If you have hard money in a country who's currency has just gone into hyperinflation, are you trying to tell us all that you would prefer to be in that hyper-inflated currency instead?  Time to go back to school, your Dukeness.

And by the way, I didn't say any such thing about the Euro or the Dollar doing a Venezuela.  What I said was that ALL FIAT currencies can be mismanaged.  Bitcoin isn't politically influenced by the whims of a wanna-be despot.  Another example of that interference here.

There are various levels of mismanagement.  As for the Euro, it may cease to exist - many commentators have been saying that in recent months (none of them with anything to do with crypto).  IF that was to happen - on the very day it happens, whatever wealth you have in your irish bank accounts will be devalued immediately.  That wealth will take a major haircut as the Punt Nua will devalue immediately.


----------



## tecate

Duke of Marmalade said:


> In case you haven't been following the story so far.  Kelleher is a big fan of bitcoin, albeit somewhat biased as evidenced by his long list of requirements for a currency which was heavily tilted in favour of the crypto.


Now he's biased even though you were the one that introduced his commentary to this discussion?  Priceless.  As I said before, It was no accident that you didn't link to his article back then and you cherry picked a specific tract of text - which, out of context and in isolation supports your world view - not the article in its entirety.



Duke of Marmalade said:


> I agree 100% with the above assertion by Kelleher.  I am not sure where _tecate _stands on it as he will not answer the point "out of context".


The article confirmed that gold is a store of value despite not being (and not having the ability to be) a medium of exchange.  Bitcoin goes one further insofar as it can be used as a medium of exchange (and we will see ongoing work on UX to make it easier to use in that context as we go forward from here).  On that basis, it's clearly not precluded from acting as a store of value in its own right or digital gold.


----------



## Duke of Marmalade

tecate said:


> There's no end to the absurdity.
> I'll say it again - divisibility does not undo scarcity.


It was Kelleher who made a big deal of divisibility, as you noted I kept the nonsensical bits of his ramblings away from AAM.
Question Yes or No?  Are satoshis scarce?  Clue: there will be 2,100 trillion of them.  If you say they aren't scarce then as a supplementary where would the decimal point need to have been drawn to make bitcoin earn the sobriquet of "scarce"?



> What are you talking about?  If you have hard money in a country who's currency has just gone into hyperinflation, are you trying to tell us all that you would prefer to be in that hyper-inflated currency instead?


  It was you who brought up the Armageddon motif:





			
				tecate yesterday said:
			
		

> It's a minor edge for sure given that if we're without electricity for extended periods, it's guns that will be needed - not cash or Bitcoin.


 You appear to have changed your mind, you will be secure with your bitcoin wallet when the nukes start being thrown around.  Or maybe I misunderstood your metaphor "it's guns that will be needed".



> There are various levels of mismanagement.  As for the Euro, it may cease to exist - many commentators have been saying that in recent months (none of them with anything to do with crypto).  IF that was to happen - on the very day it happens, whatever wealth you have in your irish bank accounts will be devalued immediately.  That wealth will take a major haircut as the Punt Nua will devalue immediately.


You may be right, though David McWilliams believes that the punt would soar in such a scenario.


			
				tecate said:
			
		

> The article confirmed that gold is a store of value despite not being (and not having the ability to be) a medium of exchange. Bitcoin goes one further insofar as it can be used as a medium of exchange (and we will see ongoing work on UX to make it easier to use in that context as we go forward from here). On that basis, it's clearly not precluded from acting as a store of value in its own right or digital gold.


 You're still doing a bit of a politician there.  But I think you are saying that you believe bitcoin can be a long term store of value without necessarily making the grade as a medium of exchange.  If this is so, you totally reject Kelleher's view.  But correct me if I have misinterpreted you.


----------



## WolfeTone

Duke of Marmalade said:


> _Wolfie_ I am always a tad nervous in engaging with you given your penchant for popping up in various aliases.



Unfortunately, an enforced move on my part due to unjust bannings in the past. I accept that previous alias TheBigShort may have ruffled some feathers with an overly abrupt style but I put it down to inexperience of the online forum etiquette. But I think banning was wholly unjust, although I think im improving all the time 

To answer your question, no I don't agree with this Kelleher chap that Bitcoins store of value is dependent on it being used as a medium of exchange. 

Speaking of 21trn 'scarce' satoshis. I did a quick sum on my calculator.
It turns out 21trn satoshi's equals about 2800 satoshis for every man, woman and child in the world. Or by todays prices $0.25c each. 

There must the equivalent of 6,000trillion (is there even a name for this number?) $0.01c circulating in the international monetary system. 
Yet apparently, two-thirds of the world's population live in relative poverty. 
Perhaps scarce is wrong adjective, elusive may be more apt.


----------



## tecate

Duke of Marmalade said:


> It was Kelleher who made a big deal of divisibility.


Everyone who has ever assessed the characteristics of money has made a big deal about divisibility and included it as a fundamentally important characteristic of money.  Show me anyone who has not done so?
The difference is that you're saying that Bitcoin's divisibility cancels out another entirely separate characteristic - that of scarcity.  That's incorrect.



Duke of Marmalade said:


> as you noted I kept the nonsensical bits of his ramblings away from AAM.


No.  You cherry picked one tract of text and deliberately didn't cite it in case people would read the complete article in context. That's disingenuous, your Dukeness.



Duke of Marmalade said:


> Question Yes or No?  Are satoshis scarce?  Clue: there will be 2,100 trillion of them.  If you say they aren't scarce then as a supplementary where would the decimal point need to have been drawn to make bitcoin earn the sobriquet of "scarce"?


Asked and answered.  Divisibility does not cancel out scarcity.  You can engage in semantics until the cows come home - it doesn't change that.

Back to school time Dukey



Duke of Marmalade said:


> It was you who brought up the Armageddon motif.


You introduced the notion that cash would trump Bitcoin in a prolonged electricity outage situation.  I said that such a scenario was likely to involve total societal breakdown in which case neither cash nor bitcoin would be relevant.
If a short term outage its a mut point for the most part.  Bitcoin transactions are possible via satellite and text message.  So long as someone in the community had a genny, people can charge their phones and still transact Bitcoin.



Duke of Marmalade said:


> You appear to have changed your mind, you will be secure with your bitcoin wallet when the nukes start being thrown around.  Or maybe I misunderstood your metaphor "it's guns that will be needed".


Its your mutterings that were being responded to so you might want to clarify those mutterings.  If you were talking about security in a societal breakdown scenario, Bitcoin would be more secure than keeping cash under your pillow....aside from the fact that Bitcoin is global, not local and in those circumstances, your local cash would be worthless.
If the point was simply in relation to an electricity outage, then you have my answer on that above.



Duke of Marmalade said:


> You may be right, though David McWilliams believes that the punt would soar in such a scenario.


There were a number of threads here on the topic in 2011/12.  I've had a look back and it seems that there were mixed opinions but with that, there were quite a few AAM'ers at the time opening accounts in NI, Belgium, France, Holland, Germany - and others aspiring to do the same.
That being said, Bitcoin is not to be considered just from an Irish perspective.  Presumably, there will be other Europeans who will be negatively affected by a Euro-breakup so the point stands regardless.



Duke of Marmalade said:


> You're still doing a bit of a politician there.  But I think you are saying that you believe bitcoin can be a long term store of value without necessarily making the grade as a medium of exchange.  If this is so, you totally reject Kelleher's view.  But correct me if I have misinterpreted you.


I've been very clear here.  I have not tried to misrepresent something.  You quoted a tract of text in isolation - without the context of the complete article and without citing the article.
I've drawn your attention to the fact that the article states that gold cannot act as a medium of exchange and thus, doesn't act as a medium of exchange.  Nevertheless it acts as a store of value.  The takeaway is that digital gold can do the very same.  It has the ability to go beyond that and act as a medium of exchange.  Services can be built on top of it like Microsoft's ION. As the world's most secure blockchain, it can serve another use case by securing other blockchains.  It can and is being used in the global remittance process as confirmed by the European Commission in this report. It doesn't have to offer all that utility to develop the utility of store of value or digital gold but it will certainly help to copper fasten its position in that role.


----------



## Duke of Marmalade

Gus1970 said:


> One gram of gold contains about 30 billion-billion atoms.
> Does this fact make it less scarce?


I was making the point that where you put the decimal point doesn't change anything of substance.  But surely the whole psychology and the use of the word "scarce" as a promotional feature would be radically different if, like conventional currencies, bitcoin was 100 times its smallest constituent as then there would be 21 trillion of them.  Who knows what the price trajectory might have been.  Folk might have thought Satoshi was targeting parity with the then dollar which would imply a market cap of $21tr
I was also reflecting on the breathtaking naïveté of Kelleher who seems to be of the view that bitcoin was a primary physical object and that it was the genius of Satoshi and the marvels of modern technology which was able to divide it into 100 million pieces.

The real point of these musings is that it highlights the fundamental flaw in bitcoin - it is not Cognizable.  Meaning there is no clear view to its value.
I think most people would agree that to date its price is purely driven by speculation. Not so much an equilibrium between supply and demand but between buyers and sellers.  Let us say the world is divided between bitcoin believers and bitcoin skeptics. I would suggest that the latter far outnumber the former but the vast majority of these latter are not active in the market.  In other words the buyers and sellers are both in the main members of the faithful.  Now there are many religions on this planet and at most one can be correct and yet they have all been sustained by their believers over many centuries.  Maybe bitcoin as a cult can similarly be sustained by the faithful.  Though I am very much of Kelleher's view that it has to make the breakthrough as a medium of exchange to achieve that longevity.  Where I differ from Kelleher is that I cannot see it making that breakthrough.


----------



## Gus1970

Duke of Marmalade said:


> I was making the point that where you put the decimal point doesn't change anything of substance.  But surely the whole psychology and the use of the word "scarce" as a promotional feature would be radically different if, like conventional currencies, bitcoin was 100 times its smallest constituent as then there would be 21 trillion of them.  Who knows what the price trajectory might have been.  Folk might have thought Satoshi was targeting parity with the then dollar which would imply a market cap of $21tr
> I was also reflecting on the breathtaking naïveté of Kelleher who seems to be of the view that bitcoin was a primary physical object and that it was the genius of Satoshi and the marvels of modern technology which was able to divide it into 100 million pieces.
> 
> The real point of these musings is that it highlights the fundamental flaw in bitcoin - it is not Cognizable.  Meaning there is no clear view to its value.
> I think most people would agree that to date its price is purely driven by speculation. Not so much an equilibrium between supply and demand but between buyers and sellers.  Let us say the world is divided between bitcoin believers and bitcoin skeptics. I would suggest that the latter far outnumber the former but the vast majority of these latter are not active in the market.  In other words the buyers and sellers are both in the main members of the faithful.  Now there are many religions on this planet and at most one can be correct and yet they have all been sustained by their believers over many centuries.  Maybe bitcoin as a cult can similarly be sustained by the faithful.  Though I am very much of Kelleher's view that it has to make the breakthrough as a medium of exchange to achieve that longevity.  Where I differ from Kelleher is that I cannot see it making that breakthrough.



Is gold scarce?


----------



## tecate

Duke of Marmalade said:


> I was making the point that where you put the decimal point doesn't change anything of substance.


That's incorrect - particularly so now that we are eleven years down the road and one Bitcoin has a value of $9,429 as I write this.  Hard to believe this has to be pointed out but the decimal point is a function of divisibility.



Duke of Marmalade said:


> But surely the whole psychology and the use of the word "scarce" as a promotional feature would be radically different if, like conventional currencies, bitcoin was 100 times its smallest constituent as then there would be 21 trillion of them.  Who knows what the price trajectory might have been.  Folk might have thought Satoshi was targeting parity with the then dollar which would imply a market cap of $21tr


Scarcity is not a 'promotional' anything - it is a bona fide characteristic of both a good store of value and money. By 2140, 21 million Bitcoin will have been minted - and we know that it stops there.
Satoshi couldn't possibly have been looking to achieve parity with the dollar because you can't tell me how many dollars are in circulation in this very moment, how many there will be tomorrow, next week/month/year, etc.  Bitcoin is hard money - FIAT is not.



Duke of Marmalade said:


> I was also reflecting on the breathtaking naïveté of Kelleher who seems to be of the view that bitcoin was a primary physical object and that it was the genius of Satoshi and the marvels of modern technology which was able to divide it into 100 million pieces.


Kelleher went from hero to zero in record speed it seems given that it was you that introduced his article (or a specific snippet of his article) to this discussion in an effort to support your argument.  Now you are criticising him for acknowledging Bitcoin's divisibility - when divisibility is universally recognised as a key characteristic of both a store of value and money.



Duke of Marmalade said:


> The real point of these musings is that it highlights the fundamental flaw in bitcoin - it is not Cognizable.  Meaning there is no clear view to its value.


It seems you have misunderstood the characteristic of Cognisability.   It's set out [broken link removed] in these words:

_"The good money is one which could easily be cognized. If it does not happen the counterfeit currency will come into circulation. As a result, so many problems will rise."_

Therefore, cognisability is akin to verifiability.  There are counterfeit notes for every FIAT currency in circulation.  Likewise, it is not easy to determine the authenticity of gold - not without expensive equipment.  In contrast to that, Bitcoins are confirmed with mathematical certainty - there are no counterfeits.  Therefore, what you have thought of as a downside for Bitcoin - is actually a feature and benefit over and above FIAT money and gold.



Duke of Marmalade said:


> I think most people would agree that to date its price is purely driven by speculation.


I think everyone understands that it's in its infancy and is finding it's place in the world.  With that, it's going through an iterative process of price discovery.  That will settle over time - whilst use as a store of value and medium of exchange (along with having services built on top of it) will continue to gain momentum.
Other than that, its fair price can be arrived at in the same way as gold.  You can ask Brendan to explain how that works.



Duke of Marmalade said:


> Not so much an equilibrium between supply and demand but between buyers and sellers.


Doesn't supply and demand implicate buyers and sellers?  The dynamic is the same as gold.  There are speculators in the gold arena too.



Duke of Marmalade said:


> In other words the buyers and sellers are both in the main members of the faithful. Now there are many religions on this planet and at most one can be correct and yet they have all been sustained by their believers over many centuries. Maybe bitcoin as a cult can similarly be sustained by the faithful.


Bitcoin is not a 'cult' or a 'religion' regardless of how many times you say it is.  Remember, you are on record as saying that anyone that would even recommend to someone to buy Bitcoin is a 'cultist'.  I'd recommend a timeout to reflect on your own thoughts Dukey.

FIAT currencies work until people lose confidence in them and they don't anymore.  That's why they have an average lifespan of 27 years.



Duke of Marmalade said:


> Though I am very much of Kelleher's view that it has to make the breakthrough as a medium of exchange to achieve that longevity.


Lets provide the full explanation.  In his article, Kelleher outlines that gold is not a medium of exchange and has not and never will have the ability to be one.  Yet it is a store of value.  Ergo, being a medium of exchange is not necessarily a prerequisite for Bitcoin to act as a store of value.  I do agree that it will help copper fasten its position in that respect but it is not a requirement for Bitcoin.



Duke of Marmalade said:


> Where I differ from Kelleher is that I cannot see it making that breakthrough.


Lets qualify that statement by adding that you are on record as stating that you vehemently don't want it to make that breakthrough.  Perhaps that clouds your judgement a tad - who's the cultist now?


----------



## Duke of Marmalade

tecate said:


> Lets qualify that statement by adding that you are on record as stating that you vehemently don't want it to make that breakthrough.  Perhaps that clouds your judgement a tad - who's the cultist now?


I won't address all the other points which are just the two of us going around in a dialogue, boring the pants of innocent AAM viewers.
But let me freely admit that I am totally against everything that the bitcoin cultists (they do exist, maybe you are not one) believe in.  I greatly respect our Western democratic way of life and its attendant institutions including its monetary system.   I believe that by and large they are looking after my interests and I am confident that they will not fulfill the bitcoin cultist fantasy of it all crashing and burning.


----------



## Duke of Marmalade

Gus1970 said:


> Is gold scarce?


I suspect you think you have a game changing "gotcha" in your pocket.  Of course it is scarce.  Here is the Oxford Dictionary definition:


			
				Oxford Dictionary said:
			
		

> scarce:  insufficient to meet demand


  So for example milk isn't scarce even though it still has a price, but the demand for it is largely satiated.  Gold is obviously in a different space.
Getting back on topic do you agree with the following statement from an ardent bitcoin supporter:


			
				Kelleher said:
			
		

> Bitcoin's utility as a store of value is dependent on its utility as a medium of exchange. We base this in turn on the assumption that for something to be used as a store of value it needs to have some intrinsic value, and if Bitcoin does not achieve success as a medium of exchange, it will have no practical utility and thus no intrinsic value and won't be appealing as a store of value.


----------



## tecate

Duke of Marmalade said:


> But let me freely admit that I am totally against everything that the bitcoin cultists (they do exist, maybe you are not one) believe in.


The only problem with that is that you have deemed anyone who is positively dispositioned towards Bitcoin as a 'cultist'.  See your post here.  You called the Global Head of Equity Strategy at a leading global investment bank a 'cultist' for recommending to his clients that they should have a holding of Bitcoin and gold.  Yet to my knowledge, the guy had never made a previous public utterance on Bitcoin.



Duke of Marmalade said:


> I greatly respect our Western democratic way of life and its attendant institutions including its monetary system.


This is not binary  - it's not a winner takes all scenario.  Decentralised cryptocurrency can sit alongside FIAT currency.  It just provides an alternative option for people - and having options can only be a positive thing.  If sovereign currencies unravel, that's down to their mismanagement - not related to Bitcoin.  In actual fact, if that's what you believe in, you should want Bitcoin to exist as a credible option.  You might have experienced relative monetary stability but that's not the experience for millions of people around the world as their sovereign currencies are mismanaged.  Bitcoin can act as an incentive for these guys not to mismanage their currencies.



Duke of Marmalade said:


> I am confident that they will not fulfill the bitcoin cultist fantasy of it all crashing and burning.


That's an inaccurate line of thought.  See above - this is not binary.  It's an expansion of the array of options open to people - nothing more.


----------



## WolfeTone

Duke of Marmalade said:


> Now there are many religions on this planet and at most one can be correct and yet they have all been sustained by their believers over many centuries. Maybe bitcoin as a cult can similarly be sustained by the faithful



The references to religious following is a strong feature of your position. Frequent references to the 'faithful', 'believers', 'cult' pepper your posts in a manner that I assume is used to try expose some fundamental flaw in those who hold the view that bitcoin has value of substance. However, not wanting to divert the topic into a futile theological debate, please allow me a little a latitude to inquire some more on these frequent references. 

It is my whole understanding that in the course of these discussions that the central debate is over whether bitcoin actually has any value or not. There are those of us that proclaim it to have value and there are those claiming it to be worthless, a bag of hot air, and this group frequently imply cult or religious fanaticism to some, if not all, the other group. 

So a brief moment, if I now accept that they are right, does that mean bitcoin has no value to me. Yes, of course. But does it mean it holds no value to others. No of course not. And as has been alluded to here, such value can be sustained for hundreds of years, more in fact. 
Lets take religious Christian faithful. This group believe that JC is the son of God, no question, they believe he was crucified and rose from the dead three days later. 
Whatever mania and hype kicked off two thousand years ago, its simply incredulous that such a story could sustain itself for so long, believed by some two billion people. Isnt it? 
Or is there any of the bitcoin non-believers part of this Christian story? Do they worship at the alter of JC? Do they receive Holy Communion, confess sins, fast at lent, all in the name of JC? 
If so, why on earth would such pragmatic, rational thinking people do such a thing? 
Perhaps they see value? Value in the word and teachings of JC? Perhaps the fear what is to come after their own demise, and pray for forgiveness? 
Or are they prepared to say now, that the Christian church and all other churches are BOHA and worthless? 

The overall point is, regardless of your views on anything subject or on any matter, if some can see a value in something where others see none, then the only question is, how much are they willing to pay for it? 
And the only way we can determine, in a monetary sense, how much anything is worth is by its market price. Unless of course, some are not prepared to believe in the free market either?

The late George Carlin, in ten short minutes, succinctly sums the ridiculous nature of religious beliefs and the monetary value attributable to them? Is he right?  
I would suggest others would think not. 

Religion is BS


----------



## Gus1970

Duke of Marmalade said:


> I suspect you think you have a game changing "gotcha" in your pocket.  Of course it is scarce.  Here is the Oxford Dictionary definition:
> So for example milk isn't scarce even though it still has a price, but the demand for it is largely satiated.  Gold is obviously in a different space.
> Getting back on topic do you agree with the following statement from an ardent bitcoin supporter:



No gotcha whatsoever, with the definition you suggested we can acknowledge that scarcity is not a function of divisibility as you have been advocating for until now and move the conversation further


----------



## Duke of Marmalade

Gus1970 said:


> No gotcha whatsoever, with the definition you suggested we can acknowledge that scarcity is not a function of divisibility as you have been advocating for until now and move the conversation further


No that is not what I was advocating.  I was musing that at the psychological level if the decimal place was in the conventional position there would be 21 trillion bitcoins and possibly the "scarce" message would sound less convincing, even though the scarcity is totally independent of the decimal position.  Thus it was the very truth of your point which was part of my musing.

For avoidance of doubt I am not suggesting that any of this fascinating sideshow adds or subtracts from my critique of bitcoin.  But it does expose the shocking naïveté and ignorance of one Mr Kelleher.


----------



## tecate

Duke of Marmalade said:


> I was musing that at the psychological level if the decimal place was in the conventional position there would be 21 trillion bitcoins and possibly the "scarce" message would sound less convincing, even though the scarcity is totally independent of the decimal position.


Great  - sounds like we are back on track again - with the acceptance that he/she designed in scarcity with 21 million Bitcoin - not 21 trillion Bitcoin.



Duke of Marmalade said:


> the scarcity is totally independent of the decimal position . . .But it does expose the shocking naïveté and ignorance of one Mr Kelleher.


How does it expose any naiveté or igorance on his part?  You accept that scarcity is independent of the decimal position - and therefore divisibility.  I've never seen a list of characteristics of money that doesn't include both divisibility and scarcity as distinct fundamentals.


----------



## Duke of Marmalade

WolfeTone said:


> The references to religious following is a strong feature of your position. Frequent references to the 'faithful', 'believers', 'cult' pepper your posts in a manner that I assume is used to try expose some fundamental flaw in those who hold the view that bitcoin has value of substance. However, not wanting to divert the topic into a futile theological debate, please allow me a little a latitude to inquire some more on these frequent references.
> 
> It is my whole understanding that in the course of these discussions that the central debate is over whether bitcoin actually has any value or not. There are those of us that proclaim it to have value and there are those claiming it to be worthless, a bag of hot air, and this group frequently imply cult or religious fanaticism to some, if not all, the other group.
> 
> So a brief moment, if I now accept that they are right, does that mean bitcoin has no value to me. Yes, of course. But does it mean it holds no value to others. No of course not. And as has been alluded to here, such value can be sustained for hundreds of years, more in fact.
> Lets take religious Christian faithful. This group believe that JC is the son of God, no question, they believe he was crucified and rose from the dead three days later.
> Whatever mania and hype kicked off two thousand years ago, its simply incredulous that such a story could sustain itself for so long, believed by some two billion people. Isnt it?
> Or is there any of the bitcoin non-believers part of this Christian story? Do they worship at the alter of JC? Do they receive Holy Communion, confess sins, fast at lent, all in the name of JC?
> If so, why on earth would such pragmatic, rational thinking people do such a thing?
> Perhaps they see value? Value in the word and teachings of JC? Perhaps the fear what is to come after their own demise, and pray for forgiveness?
> Or are they prepared to say now, that the Christian church and all other churches are BOHA and worthless?
> 
> The overall point is, regardless of your views on anything subject or on any matter, if some can see a value in something where others see none, then the only question is, how much are they willing to pay for it?
> And the only way we can determine, in a monetary sense, how much anything is worth is by its market price. Unless of course, some are not prepared to believe in the free market either?
> 
> The late George Carlin, in ten short minutes, succinctly sums the ridiculous nature of religious beliefs and the monetary value attributable to them? Is he right?
> I would suggest others would think not.
> 
> Religion is BS


You know _Wolfie _I was warming more and more to the religious analogy.  The _Boss_ proclaims himself to be a devout atheist. That presumably means he thinks that deity is BOHA.  I am not going to reveal my own religious beliefs on AAM but I am prepared to say that I believe that the Hindu belief that we get reincarnated is BOHA.  Yet Hinduism is believed by 100s of millions people and has been for centuries.  So yes that does weaken any conviction that bitcoin is going to zero any time soon even though it is undoubtedly BOHA.


----------



## tecate

Duke of Marmalade said:


> So yes that does weaken any conviction that bitcoin is going to zero any time soon even though it is undoubtedly BOHA.


And of course you can bury your head in the sand and continue on with this nonsense as long as you want.

The nonsensical analogies that yourself and Brendan liken Bitcoin to are exactly that - nonsensical.  We can see how Bitcoin compares against the characteristics of a store of value here.  The nonsensical examples you present with get an F in all categories by comparison. Ergo there is no comparison and it's disingenuous to claim that there is.


----------



## WolfeTone

Duke of Marmalade said:


> So yes that does weaken any conviction that bitcoin is going to zero any time soon even though it is undoubtedly BOHA.



So that leaves us where exactly? That bitcoin is BOHA and will return to its 'ultimate destination' anytime between now and eh, the end of time?   

All this while yourself and Brendan have just been stringing us along. You have no formula for valuing bitcoin at zero, nor any way of forecasting when it will return to zero.

You may as well be telling us The Second Coming will happen one day, should such an event be part of your own cult-like rituals? 

 Brendan is going to short bitcoin at $10,000. 
Is there a market for shorting The Second Coming?


----------



## Duke of Marmalade

WolfeTone said:


> So that leaves us where exactly? That bitcoin is BOHA and will return to its 'ultimate destination' anytime between now and eh, the end of time?
> 
> All this while yourself and Brendan have just been stringing us along. You have no formula for valuing bitcoin at zero, nor any way of forecasting when it will return to zero.
> 
> You may as well be telling us The Second Coming will happen one day, should such an event be part of your own cult-like rituals?
> 
> Brendan is going to short bitcoin at $10,000.
> Is there a market for shorting The Second Coming?


I'm sure _tecate _understands that.  I don't.


----------



## WolfeTone

Duke of Marmalade said:


> I'm sure _tecate _understands that. I don't.



Its not that hard really, you frequently reference religion/cults as a means to demonstrate that bitcoin is actually worthless.

Im merely pointing out the contradiction in doing so when clearly billions of people around the world of different faiths would contest that their religion does have value.  
Even if for the vast majority of them such faiths are given over to the invisible man in the sky. 
Perhaps even your own religious/cult beliefs?


----------



## Duke of Marmalade

WolfeTone said:


> Its not that hard really, you frequently reference religion/cults as a means to demonstrate that bitcoin is actually worthless.
> 
> Im merely pointing out the contradiction in doing so when clearly billions of people around the world of different faiths would contest that their religion does have value.
> Even if for the vast majority of them such faiths are given over to the invisible man in the sky.
> Perhaps even your own religious/cult beliefs?


_Wolfie _it was post #376 that went a tad over my head.
I have conceded that you have correctly pointed out a contradiction in my position.  I believe there is a cultist element to bitcoin.  But you have rightly pointed out that a cult can give a BOHA value to many people for a very long time.  So I now surrender and say I have lost my conviction that bitcoin will go to zero any time soon.
The cult itself will be a broad church ranging from those who think it is worth, say, $5,000 to those who think it worth $100,000. And there are those that believe it will still be a store of value even if it fails miserably in its intended purpose of being a global medium of exchange. That is enough to sustain an active and very volatile market.  We also see a paradox whereby a relatively small amount of money going around and around can create the illusion that bitcoin has a market cap of $200bn.


----------



## Leo

tecate said:


> I'm not sure what the issue is? He has included a few categories that FIAT and gold can't possibly score well with (as they have their foundations rooted in an analog time). But if you check those fundamentals, they're legitimate in terms of what would make a decent medium of exchange.



Just taking this point, the issue is that some of the criteria have little to do with money and are clearly chosen to favour bitcoin, so it loses all credibility. 



tecate said:


> No problem Leo - then don't use it



Not sure if you're deliberately misinterpreting there. To be clear, I don't the hype about bitcoin being digital when I'm already transacting digitally with my Euro on a daily basis. Why do crypto fans seem to think the digital qualities are somehow a game changer? 



tecate said:


> Dabbling in the rhetorical I see (given that I myself said that fees could still be an obstacle at that micro-level). Again, like I said, we'll have to see how LN fees pan out. If not, there's a crypto that's feeless that will do the job quite nicely.



You're the one pushing the ability to micro-transact as a great feature of bitcoin. Are you now conceding it isn't practical, and may never be? LN isn't bitcoin, it's a separate solution that sits along side it in an attempt to solve some of the fundamental shortcomings of the bitcoin design.



tecate said:


> In an automated machine to machine environment (IoT sensors), sure they will. If you're talking billions of sensors and repeated data points, then it's far more significant than you've considered it to be.



You obviously don't have an understanding of the accountancy requirements that follow inter-company transactions, and the overheads involved in terms of infrastructure and people. From a technical point of view, transacting at that level to push every single data point through the network to the core billing systems to the consumers would be a really inefficient design in terms of energy usage and bandwidth requirements. 

We're trialing a multitude of IoT sensors including smart badges (on all people and equipment) area density & movement sensors and medical scanners, they all report back to central management systems. In fact, almost all commercial IoT sensors do, because that means the sensors themselves are much less complex and cost a fraction of the price and consume a fraction of the energy they would otherwise. 



tecate said:


> but in the not too distant future, personal data will be under our own control and it will be up to ourselves if we want to sell aspects of it.



I don't ever foresee a point where we will actually monetise personal data at an individual level. The value (and it's a low value) is in the volume. Am I really going to bother signing up to supply my data to a service when feeding them maybe a dozen pieces of information a day earns me 5c a year?


----------



## Firefly

Leo said:


> You obviously don't have an understanding of the accountancy requirements that follow inter-company transactions, and the overheads involved in terms of infrastructure and people. From a technical point of view, transacting at that level to push every single data point through the network to the core billing systems to the consumers would be a really inefficient design in terms of energy usage and bandwidth requirements.


I think long before that even becomes close to a reality, governments around would pass the LTOPG act* to protect their income streams
Legal Tender Only Please Guys



Leo said:


> I don't ever foresee a point where we will actually monetise personal data at an individual level. The value (and it's a low value) is in the volume. Am I really going to bother signing up to supply my data to a service when feeding them maybe a dozen pieces of information a day earns me 5c a year?



But...but....it's divisible


----------



## WolfeTone

Duke of Marmalade said:


> I have lost my conviction that bitcoin will go to zero any time soon.



Well, that didn't hurt now, did it?


----------



## tecate

Leo said:


> Just taking this point, the issue is that some of the criteria have little to do with money and are clearly chosen to favour bitcoin, so it loses all credibility.


That's your opinion Leo - I disagree.  The vast majority of those characteristics have been formulated before programmable money existed.  Even if you assess on the basis of those, Bitcoin scores very well.  I'd imagine that you can only be talking about the last two on the list in terms of characteristics that are relative new-comers.  I'm sorry that you dislike the fact but if you consider each of them, of course they bring something to the table in terms of what makes good money.
Decentralised:  Why shouldn't that be listed if sovereign/'government backed' is listed?  There are advantages and disadvantages with both - but they're both relevant.
Smart (Programmable):  Programmability of money is an excellent ability  - one which can enable smart contracts.



Leo said:


> Not sure if you're deliberately misinterpreting there. To be clear, I don't the hype about bitcoin being digital when I'm already transacting digitally with my Euro on a daily basis.


My comment was exactly as intended.  If you don't personally have a use case for Bitcoin, then don't use it.  There are plenty of people around the world that don't have access to these traditional services you speak of.  There are plenty of people around the world who live in countries where those traditional services have failed.
Bitcoin is peer to peer - and doesn't involve an intermediary.  The services that you talk about do.  So you'll need a bank account - some don't have that luxury (we're not just talking about Ireland - Bitcoin is to be considered on a global basis).  Others don't want such a thing.
In terms of cost, it may on the face of it not seem to cost much but between vendor and user, there are additional costs with systems that involve intermediary banks.  Credit card fraud came in at a whopping $24 billion in 2018.  For the most part, those fees are borne by the vendor - and built into the cost of the product/service (accounting for about 3% of the sale price).  Once Bitcoin becomes more user friendly, businesses stand to save substantial amounts of money by offering Bitcoin as a means of payment.



Leo said:


> Why do crypto fans seem to think the digital qualities are somehow a game changer?


See above.  They don't.  They see the decentralised, peer to peer, trustless and censorship resistant aspects of Bitcoin a a game changer.  They also recognise the benefit of hard (fixed supply) money.



Leo said:


> You're the one pushing the ability to micro-transact as a great feature of bitcoin.


This originated with Dukey stating that Kelleher made a big deal about divisibility.  Divisibility is a core characteristic of money - there hasn't been anyone that I'm aware of that hasn't included it as a characteristic of money.  I tell you what I told him - that gold was the one that fails in that test and that whilst Bitcoin has greater divisibility than FIAT, that difference between them in practical terms is minor.



Leo said:


> Are you now conceding it isn't practical, and may never be?


Go back and read my last two posts on the subject.  I categorically stated that for incredibly small micro-transactions, this would most likely be the domain of a fee-less digital currency that is designed from the outset for IoT purposes.  I said that was likely although we'd also have to see how LN fees work out as we go forward.  I'm not conceding anything - I'm stating what I stated before.



Leo said:


> LN isn't bitcoin, it's a separate solution that sits along side it in an attempt to solve some of the fundamental shortcomings of the bitcoin design.


On LNs classification - semantics.  It's being developed to work with Bitcoin - and address smaller, day to day transactions.  As regards shortcomings, there isn't a currency without shortcomings and trade-offs.  There are cryptocurrencies that have (or claim to have) abilities to throughput vast volumes of transactions quickly and cheaply.  More often than not, the trade off is some other aspect/characteristic of what makes for a decent decentralised digital currency.



Leo said:


> You obviously don't have an understanding of the accountancy requirements that follow inter-company transactions, and the overheads involved in terms of infrastructure and people. From a technical point of view, transacting at that level to push every single data point through the network to the core billing systems to the consumers would be a really inefficient design in terms of energy usage and bandwidth requirements.


These are not likely to be consumer level transactions.  We're talking about the world of machine to machine micropayments.  I'm not an accountant but if you say there are accountancy requirements which prevent this digital interaction, fair enough.  It doesn't seem like something that shouldn't be possible to overcome and it's not something I've heard mention of in discussions about M2M micropayments.



Leo said:


> I don't ever foresee a point where we will actually monetise personal data at an individual level. The value (and it's a low value) is in the volume. Am I really going to bother signing up to supply my data to a service when feeding them maybe a dozen pieces of information a day earns me 5c a year?


I think that it starts with getting back control of our personal data.  That starts with so all having a decentralised digital identity  - similar to Microsoft's ION which is being built on top of the Bitcoin blockchain.  In terms of it's value - its value is immense - first in taking back control over our own data - and secondly, making aspects of it available, as much for the greater good as for individual reward.  I don't think its a case of signing up for an individual service.  It should be something as intuitive as an option on an application.
There's a lot of work being done on this - but it's quite a few years away from mass market use yet.  It's a separate discussion in its own right but if you google 'decentralised personal data marketplace', you'll find that info.



Firefly said:


> I think long before that even becomes close to a reality, governments around would pass the LTOPG act* to protect their income streams
> Legal Tender Only Please Guys


It's a long time coming, Firefly - the LTOPG Act.  Well, that's not quite correct - there are some countries where cryptocurrencies are illegal - they wouldn't be the most progressive of places to say the least!  However, it's strange but why haven't all governments banned it outright - and have done with it?  I know there are a few who banned it and then reversed the ban.  Could it be that they're going to miss out on the upside of innovation if the do?
We had Trump talking about Bitcoin last year - yet no ban.  We had both houses of Congress in prolonged debate about Libra - and by implication, Bitcoin last year - yet no ban.  In recent days, Congressman Warren Davidson said that he thinks Bitcoin is a great store of value.  You can listen to that interview here - and his thoughts on Bitcoin and innovation in the space.  Last year Congressman Patrick McHenry said that there was "no capacity to kill Bitcoin".  That's a recognition of the fact that Bitcoin is decentralised and can't be controlled.

So is it a case that the trade off is to benefit from the innovation in the space by not trying to slam the iron fist down on top of it?  Isn't there a realisation that if they try to take a hard approach that they will lose whatever influence they have over the space entirely and such a move will backfire?

In the meantime, [broken link removed] and the Lindy Effect are in play - and every day that Bitcoin is still out there, it becomes harder and harder to stop.



Firefly said:


> But...but....it's divisible


That's your commentary with regard to the work that's ongoing on data marketplaces?  Very insightful (though the insight isn't into data marketplaces in this instance!  )


----------



## Duke of Marmalade

tecate said:


> This originated with Dukey stating that Kelleher made a big deal about divisibility.  Divisibility is a core characteristic of money - there hasn't been anyone that I'm aware of that hasn't included it as a characteristic of money.  I tell you what I told him - that gold was the one that fails in that test and that whilst Bitcoin *has greater divisibility than FIAT*, that difference between them in practical terms is minor.


This is the height of silliness, though to be fair you have taken it from Mr Kelleher.  There is absolutely no limit to the divisibility of fiat.  Banks could choose to record people's account balances to 100 decimal places if there was a demand for same.  And people could micro transact in fiat without any divisibility constraint if they so desired.  For example Airtricity charge me €0.1496 per unit of electricity.
What you are referring to here is the granularity of fiat coin.  Bitcoin doesn't even do coin, despite its name.


----------



## Leo

tecate said:


> That's your opinion Leo - I disagree.  The vast majority of those characteristics have been formulated before programmable money existed.



Can you point to where people assessed programambility as a characteristic of money before programmable money existed? Likewise with decentraisation or the ability to divide into values less than $0.01c, who was longing for the ability to pay someone $0.000001?



tecate said:


> Smart (Programmable):  Programmability of money is an excellent ability  - one which can enable smart contracts.



My euro is programmable, I've set up all kinds of direct debits and standing orders that meet all my needs. I can use PayPal or Revolut apps to transfer money, split bills. Most major providers have APIs that can do anything useful that can be done with bitcoin. 

Smart contracts might have some interesting applications, but let's not pretend bitcoin is the solution there.



tecate said:


> My comment was exactly as intended.



So you intended to avoid the inconvenient truth. 



tecate said:


> See above.  They don't.  They see the decentralised peer to peer censorship resistant aspect of Bitcoin a a game changer.  They also recognise the benefit of hard (fixed supply) money.



Then why the hype about it being digital?  



tecate said:


> Divisibility is a core characteristic of money - there hasn't been anyone that I'm aware of that hasn't included it as a characteristic of money.



Very true, it is. But why rate the dollar as only moderately divisible? Where is the demand to transact in fractions of cents?




tecate said:


> Go back and read my last two posts on the subject.  I categorically stated that for incredibly small micro-transactions, this would most likely be the domain of a fee-less digital currency that is designed from the outset for IoT purposes.



So bitcoin has no value in that scenario. Is a fee-less crypto viable on mass scale? Someone has to fund the network. 



tecate said:


> On LNs classification - semantics.  It's being developed to work with Bitcoin



And it still isn't bitcoin. 



tecate said:


> These are not likely to be consumer level transactions.  We're talking about the world of machine to machine micropayments.  I'm not an accountant but if you say there are accountancy requirements which prevent this digital interaction, fair enough.  It doesn't seem like something that shouldn't be possible to overcome and it's not something I've heard mention of in discussions about M2M micropayments.



It's not that they can't be overcome, it's that it's trying to solve a problem that doesn't exist. Every aspect of life will not get better through the introduction of a blockchain. There's no demand to push B2B transactions at that level when the costs of processing & reporting will exceed the transaction value. Collate the data centrally and batch bill on a monthly basis or whatever period that makes sense for the use case. 



tecate said:


> In terms of it's value - its value is immense - first in taking back control over our own data - and secondly, making aspects of it available, as much for the greater good as for individual reward.



So it's not about micro-payments any more?  



tecate said:


> I don't think its a case of signing up for an individual service.  It should be something as intuitive as an option on an application.



If you're not signing up for a service then how do you manage access to your data? Is an option on an application not signing up to the app owner's service?



tecate said:


> There's a lot of work being done on this - but it's quite a few years away from mass market use yet.  It's a separate discussion in its own right but if you google 'decentralised personal data marketplace', you'll find that info.



So they're just decentralising data marketplaces the likes of which exist today. None of these operate at the individual level, there is no value to one person's data.


----------



## Firefly

tecate said:


> It's a long time coming, Firefly - the LTOPG Act.  Well, that's not quite correct - there are some countries where cryptocurrencies are illegal - they wouldn't be the most progressive of places to say the least!  However, it's strange but why haven't all governments banned it outright - and have done with it?


I'm sure they've thought about it. But as with children, if you tell people they can't have it they might well make it more attractive. In any case, there isn't really the rush to introduce LTOPG  yet, _because nobody is using Bitcoin to buy stuff_. But if/when they do in numbers, I would expect LTOPG to be introduced. Governments need taxes to fund public services afterall - how would you think they could manage compliance in a world of Bitcoin?




tecate said:


> That's your commentary with regard to the work that's ongoing on data marketplaces?  Very insightful (though the insight isn't into data marketplaces in this instance!  )


I made this is jest. I am in no way an expert in Bitcoin and am like Wolf Tone in that regard, although to be fair he has become a lot learned of late.


----------



## Leo

Firefly said:


> Governments need taxes to fund public services afterall -



Don't worry about that!  For all the talk about how great cryptos are as a means of protection from despotic regimes, the only real use case in those scenarios is to allow the wealthy in those countries escape with their riches.


----------



## WolfeTone

Firefly said:


> how would you think they could manage compliance in a world of Bitcoin?



Its a good question. Will this help?

Revenue taxation of cryptos


----------



## tecate

Duke of Marmalade said:


> This is the height of silliness, though to be fair you have taken it from Mr Kelleher.


Priceless.  You cite a specific tract of text from Kelleher (without linking to the article or citing the source) to support your world view but then when you are called on it - you then turn on the very source that you introduced in the first place?  Makes sense.



Duke of Marmalade said:


> There is absolutely no limit to the divisibility of fiat.  Banks could choose to record people's account balances to 100 decimal places if there was a demand for same.


Hasn't this been thrashed out already in the course of this discussion?  Was it not accepted that divisibility is a core characteristic of money in anyones book and that it's gold that scores badly in this category?  Mountain out of a molehill much?  That said, Satoshi had the foresight to provide for eight places of decimal because unlike FIAT - which robs people of their wealth by the constant money printing and inflation, he/she recognised that over the fullness of time, those decimal places will be required.  Check out Gresham's Law sometime  - FIAT money will never need to go beyond 2 places of decimal.



Duke of Marmalade said:


> What you are referring to here is the granularity of fiat coin.  Bitcoin doesn't even do coin, despite its name.


Of course it doesn't because it's the digital money for the digital age that Milton Friedman alluded to.



Leo said:


> Can you point to where people assessed programambility as a characteristic of money before programmable money existed?


Please re-read what I wrote.  I stated that the other characteristics (excluding smart programmable money and decentralisation) have been fundamental characteristics of money before decentralised digital money existed.
If something relevant now exists that didn't back then, I believe its merit should be considered as a characteristic of money.  If 'sovereign/government backed' is listed as a characteristic, why shouldn't 'decentralisation' be considered?  Clearly there are both advantages and disadvantages with both - but they're both entirely relevant as characteristics of money.
The very same with smart/programmable money.  In a machine to machine transaction, a smart contract can be used.  You can dismiss that if you wish - but I simply wouldn't agree with the suggestion that it's not relevant.



Leo said:


> My euro is programmable, I've set up all kinds of direct debits and standing orders that meet all my needs. I can use PayPal or Revolut apps to transfer money, split bills. Most major providers have APIs that can do anything useful that can be done with bitcoin.


Your Euro - in and of itself - is not programmable.



Leo said:


> Smart contracts might have some interesting applications, but let's not pretend bitcoin is the solution there.


There's an entire separate thread that could be started on the subject.  For this thread - lets take it back to your claim that its not relevant.  Bitcoin is still programmable money - your Euro (in and of itself) is not.  Your Euro can't effect a smart contract.



Leo said:


> So you intended to avoid the inconvenient truth.


I'm not shying away from any truth - inconvenient or otherwise.  Even in agreeing with you, you want to pick an argument.    (But fine! - no problem).  You stated that you personally had no use case for Bitcoin.  My point is that those may be your circumstances but you don't represent everyone in the universe.  There are plenty who present with issues that can be overcome with Bitcoin.  Oftentimes vendors offer a discount for payment with Bitcoin.  But of course the fact that it could save billions is an inconvenient truth that you yourself intend to avoid.



Leo said:


> Then why the hype about it being digital?


Firstly, what hype? There is no hype here. Secondly, it being digital is implicated within the context of it being decentralised, peer to peer, trustless, censorship resistant, programmable money with a fixed supply.



Leo said:


> Very true, it is. But why rate the dollar as only moderately divisible? Where is the demand to transact in fractions of cents?


Ground covered already.  The fact is that it is highly divisible  - to a greater extent than FIAT.  Maybe its entirely relevant for Bitcoin to be so as it doesn't just rob people of their wealth through money printing and inflation - and so it will actually need that high divisibility!  Can you cite another commentator who has rated them differently in terms of divisibility then?




Leo said:


> So bitcoin has no value in that scenario. Is a fee-less crypto viable on mass scale? Someone has to fund the network.


It remains to be seen as regards to what extent Bitcoin adds value in this context - until we see how LN fees pan out.  On the fee-less crypto, I don't think we should go into greater detail (unless you want to open a separate thread on the topic).
One thing is for certain - visa is not equipped to deal with micro-transactions.



Leo said:


> And it still isn't bitcoin.


Semantics.  It's a Layer 2 solution that's being developed with Bitcoin in mind - to transact Bitcoin time and cost efficiently for small day to day transactions.



Leo said:


> It's not that they can't be overcome, it's that it's trying to solve a problem that doesn't exist. Every aspect of life will not get better through the introduction of a blockchain. There's no demand to push B2B transactions at that level when the costs of processing & reporting will exceed the transaction value. Collate the data centrally and batch bill on a monthly basis or whatever period that makes sense for the use case.


I have never suggested that 'every aspect of life will get better through the introduction of blockchain'.  There are situations where regular centralised databases work fine.  However, there are also situations that could very much utilise secure and tamperproof data.  In respect of costs, that depends on the implementation.



Leo said:


> So it's not about micro-payments any more?


Data marketplaces are likely to implicate micro-payments - yes.



Leo said:


> If you're not signing up for a service then how do you manage access to your data? Is an option on an application not signing up to the app owner's service?


Through decentralised digital identities.  Microsoft are building one such system on top of the Bitcoin blockchain.



Leo said:


> So they're just decentralising data marketplaces


Which data marketplaces are you referring to specifically?  Can you provide a link to one?  Decentralised systems can put the control of personal data back in the hands of the owner of that data.



Leo said:


> there is no value to one person's data


Privacy is pretty valuable Leo.  As regards the choice to sell or not to sell data, that will be the data owners prerogative.
That's personal data - we didn't even get to IoT data generally.



Firefly said:


> I'm sure they've thought about it. But as with children, if you tell people they can't have it they might well make it more attractive. In any case, there isn't really the rush to introduce LTOPG  yet, because nobody is using Bitcoin to buy stuff. But if/when they do in numbers, I would expect LTOPG to be introduced. Governments need taxes to fund public services afterall - how would you think they could manage compliance in a world of Bitcoin?


  I'm sure that they've thought about it too - and some of them have flip/flopped as they don't know how to deal with it.  You can ban it all day long.  There is no central office for Bitcoin.  If they don't all ban it together - worldwide - then it will have little effect.  There's no chance of that happening.  Secondly, as I alluded to - every day above ground, it continues to gain ground and stake its claim.  You heard McHenry - it can't be stopped.
As regards compliance, that is ongoing and it will continue to be ongoing for the next few years.  Maybe you need to think of it a bit differently though - compliance belongs to centralised systems - not decentralised systems.



			
				Leo said:
			
		

> Don't worry about that! For all the talk about how great cryptos are as a means of protection from despotic regimes, the only real use case in those scenarios is to allow the wealthy in those countries escape with their riches.


Bitcoin is user agnostic Leo.  Many people can't open bank accounts - but they can install a Bitcoin wallet in a couple of minutes.  It's available to anyone - and I don't agree with this mantra of depriving people of something that's a societal good because some minority can abuse it.  But cherry pick user groups as much as you want to support your world view.


----------



## Firefly

tecate said:


> I'm sure that they've thought about it too - and some of them have flip/flopped as they don't know how to deal with it.  You can ban it all day long.  There is no central office for Bitcoin.  If they don't all ban it together - worldwide - then it will have little effect.  There's no chance of that happening.  Secondly, as I alluded to - every day above ground, it continues to gain ground and stake its claim.  You heard McHenry - it can't be stopped.
> As regards compliance, that is ongoing and it will continue to be ongoing for the next few years.  Maybe you need to think of it a bit differently though - compliance belongs to centralised systems - not decentralised systems.


Swapping Bitcoin between citizens would be impossible to police, but when those Bitcoins are converted to legal tender things it gets a little tricky... 
Let's say Ireland passes a low banning Bitcoin today and tomorrow you and Duke have those pints and offer to pay in Bitcoin. Do you think a pub will accept Bitcoin knowing that it will show in its accounts?


----------



## Leo

tecate said:


> Please re-read what I wrote.



Yeah, so you're trying to redefine what most people accept as the characteristics of money and choosing attributes that are weighted towards crypto.



tecate said:


> Your Euro - in and of itself - is not programmable.



And it doesn't need to be, I have all the programmable benefits of bitcoin . 



tecate said:


> Your Euro can't effect a smart contract.



What's the average consumer missing out on here? Do you expect us all to be writing contracts?



tecate said:


> I'm not shying away from any truth - inconvenient or otherwise.  Even in agreeing with you, you want to pick an argument.    (But fine! - no problem).  You stated that you personally had no use case for Bitcoin.



Again, that's totally unrelated to the point I made. 




tecate said:


> Ground covered already.  The fact is that it is highly divisible  - to a greater extent than FIAT.  Maybe its entirely relevant for Bitcoin to be so as it doesn't just rob people of their wealth through money printing and inflation - and so it will actually need that high divisibility!  Can you cite another commentator who has rated them differently in terms of divisibility then?



Why not just answer the question and tell us where the demand to transact in fractions of cents is coming from?



tecate said:


> One thing is for certain - visa is not equipped to deal with micro-transactions.



Of course not, they don't make any sense!



tecate said:


> Semantics.  It's a Layer 2 solution that's being developed with Bitcoin in mind - to transact Bitcoin time and cost efficiently for small day to day transactions.



It's absolutely not semantics unless you believe each LN transaction will be reflected in the bitcoin blockchain? That's like using Visa to fund a Paypal, then buying stuff with Paypal believing you're using Visa. 




tecate said:


> I have never suggested that 'every aspect of life will get better through the introduction of blockchain'.  There are situations where regular centralised databases work fine.  However, there are also situations that could very much utilise secure and tamperproof data.  In respect of costs, that depends on the implementation.



That one was aimed more at others alright, the hype about what blockchain or smart contracts being somehow transformational are being way over played. 



tecate said:


> Through decentralised digital identities.  Microsoft are building one such system on top of the Bitcoin blockchain.



How does that enable you more monetize your personal data? 



tecate said:


> Which data marketplaces are you referring to specifically?  Can you provide a link to one?  Decentralised systems can put the control of personal data back in the hands of the owner of that data.



I wasn't talking about any specifically, but you might have heard of Google, they're one of the biggest. Openprise would be another player, there are quite a few operating in the medical data space including Symphony Technologies. How do you have such conviction in the future value of decentralised data marketplaces when you don't seem to know anything about the setor?

Decentralised systems put the data in the hands of anyone hosting or with accessing to a node. They are not the privacy boon you suspect. 



tecate said:


> Privacy is pretty valuable Leo.



People consider their own data valuable, but no one else puts the same value on it. So the suggestion that people will sell their data over and over through micro-transactions doesn't make sense. 



tecate said:


> Maybe you need to think of it a bit differently though - compliance belongs to centralised systems - not decentralised systems.



What is it about decentralisation that prohibits compliance?


----------



## Duke of Marmalade

_tecate _why are  you are so stubbornly refusing to accept that Mr Kelleher got it badly wrong in bigging up this divisibility advantage of bitcoin over fiat?  These days fiat is every bit as digital as crypto and the recording of numerical entries is only constrained by the limitations of current computer technology and crypto has no advantage over fiat in that regard.
Mr Kelleher is clearly placing some importance on the fiat cent.  But that is only of relevance when considering fiat in the context of its physical representation by coin.
Yes we are in mountain out of molehill territory but it was Mr Kelleher who at lest made a small hillock out of a non existent divisibility edge and you climbed right to the very top of it.


----------



## tecate

Firefly said:


> Swapping Bitcoin between citizens would be impossible to police


Right now it provides more data than cash - although advanced users can transact with privacy and privacy updates can be applied to make it truly anonymous.
Surveilling and controlling peoples use of money is a more recent development in the history of money.  We're told it's being done to 'fight terrorism' - and that excuse is used to breach peoples right to privacy.  You may think that it's a good idea that the state knows every transaction you've ever made - but I don't.  Crime/terrorism can be fought in the traditional way (by tackling the actual crime itself) without trampling over people's privacy.  People will scream blue bloody murder about this - but that's my view and there are plenty who believe the very same.



Firefly said:


> Let's say Ireland passes a low banning Bitcoin today and tomorrow you and Duke have those pints and offer to pay in Bitcoin. Do you think a pub will accept Bitcoin knowing that it will show in its accounts?


It will hamper development and roll-out of Bitcoin for sure.  It will then turn into something akin to the war on drugs (unwinnable).  Any control they might have had will go out the window if they take that approach.  Can they get every country onboard together in banning crypto?  What will the effect be on innovation in the space if they do that (not just Bitcoin is implicated and most projects don't implicate a money use case as the primary goal).  Check out Davidson's recent interview and see what he has to say on the subject.  Here's Andreas Antonopoulos' view.
It can be driven underground - so sure - bricks and mortar businesses won't be able to use it in any official capacity (not because it will 'show up in their accounts as government have no such access to a Bitcoin wallet - but because it could be demonstrated that they were accepting bitcoin payment).  Anything that is available online can still be facilitated through it.  So bottom line is that it can retard its progress yes - but it won't kill it.

I still believe greater usability and improved UX trumps all of these things.  If your granny can use it, then none of this matters to me.


----------



## tecate

Leo said:


> Yeah, so you're trying to redefine what most people accept as the characteristics of money and choosing attributes that are weighted towards crypto.


I'm not trying to redefine anything Leo.  Let me ask you a question.  If you figure out a list of fundamentals as to what makes for good money today and that consideration did not take into account developments in the evolution of money, don't you think it's right and proper that there should be a re-evaluation?  Perhaps you don't but I do.
We're talking about just two characteristics that he added.  Lets go through them once again.
Decentralisation:  Do you accept that there is an advantage in being able to transact money digitally - on a peer to peer basis - without an intermediary?  To me, it's certainly significant and worthy of consideration.
Smart Programmable money:  Programmable money allows the flexibility to set up rules that are enforced by the money itself.  For anyone who would like to delve into that further, this medium article goes into greater detail.

You don't like those characteristics or don't think they're relevant?  I don't agree - however if that's the case then just ignore them.  Against all the other characteristics, Bitcoin scores very well already.



Leo said:


> And it doesn't need to be, I have all the programmable benefits of bitcoin.


Not natively you don't - and the bigger point is that what you describe with the Euro is only possible through a centralised party.  Bitcoin is decentralised - it's a technology of trust.



Leo said:


> Again, that's totally unrelated to the point I made.


I disagree.



Leo said:


> What's the average consumer missing out on here? Do you expect us all to be writing contracts?


Do I expect consumers to be writing smart contracts? No. I'd expect developers and innovators to do so to bring more efficient financial services to the fore.  Have a read of this very same medium article I linked to above - and particularly the section on smart contracts.



Leo said:


> Of course not, they don't make any sense!


Review the definition of a micro-transaction here.  They make plenty of sense - and visa can't transact them economically.



Leo said:


> It's absolutely not semantics unless you believe each LN transaction will be reflected in the bitcoin blockchain? That's like using Visa to fund a Paypal, then buying stuff with Paypal believing you're using Visa.


I think you need to review what the Lightning Network is then - as you must be misunderstanding something.  Investopedia provide this summary here. You also seem to be misunderstanding that Bitcoin is a currency, store of value and a monetary system in its own right. Paypal is not. Visa is not....and of course they're both centralised services alongside that. Neither Bitcoin or LN are centralised entities.



Leo said:


> That one was aimed more at others alright, the hype about what blockchain or smart contracts being somehow transformational are being way over played.


There was 'hype' back in late 2017 surrounding Bitcoin/Crypto/Blockchain/DLT/Smart Contracts.  I'm not aware of any hype right now.  However, they do have quite a lot of potential.  We will have to see what the future brings in that respect though - in answer to your claim.



Leo said:


> How does that enable you more monetize your personal data?


It will allow people to take control over their own digital identity - and in turn take greater control with regard to their data and privacy of said data. Included in that will be the facilitation of the ability to sell personal data (or aspects of it) or not.



Leo said:


> I wasn't talking about any specifically, but you might have heard of Google, they're one of the biggest. Openprise would be another player, there are quite a few operating in the medical data space including Symphony Technologies. How do you have such conviction in the future value of decentralised data marketplaces when you don't seem to know anything about the setor?


I'm aware that a volume of work is being done on this.  You'll have heard of the phrase 'data is the new oil'.  If we accept that data is valuable, then it's not such a stretch that if you can design systems to put control of that data back in the hands of the original owners of that data, it's quite a big deal.



Leo said:


> Decentralised systems put the data in the hands of anyone hosting or with accessing to a node. They are not the privacy boon you suspect.


That's not my understanding but you're the expert apparently.



Leo said:


> People consider their own data valuable, but no one else puts the same value on it. So the suggestion that people will sell their data over and over through micro-transactions doesn't make sense.


If it's all automated and the only thing that the consumer has to do is select certain options on a decentralised application, then why not?



Leo said:


> What is it about decentralisation that prohibits compliance?


Compliance is part of the legacy world.  The type of 'compliance' you are referring to was never envisaged with decentralised digital currencies in mind.  When I send Bitcoin from my Bitcoin wallet to someone elses Bitcoin wallet, there's no regulation involved - it wasn't designed with that in mind as it isn't designed to be part of the conventional system.  Bitcoin doesn't challenge the status quo in the conventional system.  It steps outside it.  People can take it or leave it on that basis - Bitcoin doesn't care.



Duke of Marmalade said:


> _tecate _you are either  thick as champ, which  I doubt, or you are stubbornly refusing to accept that Mr Kelleher got it badly wrong in bigging up this divisibility advantage of bitcoin over fiat.  These days fiat is every bit as digital as crypto and the recording of numerical entries is only constrained by the limitations of current computer technology and crypto is no different from fiat in that regard.


Why did you quote his article then if you don't believe in what he has to say?  That's right - you didn't cite him - you _selectively_ quoted him.

Here's the deal.  Divisibility has been an accepted characteristic of money before Kelleher or digital currency ever came into the picture.  Bitcoin has much greater divisibility than FIAT and both of them have much greater divisibility than gold (such that gold couldn't possibly act as a medium of exchange on this basis alone).  He scores Bitcoin as 'high' for this characteristic and scores FIAT money as 'moderate'.  He's not wrong to do so - albeit sure - you can argue that it's not of so much relevance.  I'm already on record as saying that this divisibility characteristic is much more profound a consideration when it comes to gold (as it knocks it out of the game in terms of consideration as a medium of exchange).

It facilitates Bitcoin in building up greater value over the fullness of time.  You could say that this will never be necessary for FIAT as there is no fixed supply and it's not hard money....and you'd be right to say so.  Bitcoin doesn't rob people blind year on year through money printing and inflation.  We know how many Bitcoin have been minted...we have no idea from one moment to the next how many Euro or USD have been.  We are led to believe that central banks around the world have magic'ed up an additional $25 trillion in recent months though.


----------



## Duke of Marmalade

tecate said:


> Why did you quote his article then if you don't believe in what he has to say?  That's right - you didn't cite him - you _selectively_ quoted him.


I often quote Scripture, some good stuff in there, but I don't go with all that "eye for an eye" mullarkey.  And I don't provide a link to the New Testament every time I make a quotation.  I have noted subsequently that Mr Kelleher is something of an Evangelist on bitcoin.  He seems to provide all of Investopedia's commentary on its theology.  He is clearly a believer and I would disagree with the majority of his teachings.  However, the particular extract which I did source is right on the button IMHO, and yes it suited my case - that's the way debates work.



> Bitcoin has much greater divisibility than FIAT ...


 Wrong, wrong wrong You clearly have a blind spot here. The digital entries of fiat on peoples bank accounts are every bit as divisible as bitcoin, if need be. And there is no constraint on digital transactions as evidenced by me giving an example of Airtricity charging €0.1496 per unit. You are being blinded by the granularity of its coin, which is not relevant to the divisibility debate.


----------



## tecate

Duke of Marmalade said:


> I often quote Scripture, some good stuff in there, but I don't go with all that "eye for an eye" mullarkey.


You don't?  You do surprise me your Dukeness :-D



Duke of Marmalade said:


> I have noted subsequently that Mr Kelleher is something of an Evangelist on bitcoin..


It's more of the same then.  Anyone who might have - inadvertently or otherwise - made reference to something that turns out to be favourable to Bitcoin immediately qualifies as a 'cultist' or 'evangelist'  Priceless, your Dukeness!
I guess Fax Machine Guy would never qualify as a 'cultist' or 'evangelist', right?



Duke of Marmalade said:


> He seems to provide all of Investopedia's commentary on its theology.


Does Investopedia come in for the 'cultist' tag also?  Is it likely to feel the effects of the Dutchy of Marmalade's Inquisition?



Duke of Marmalade said:


> However, the particular extract which I did source is right on the button IMHO.


Quoted out of context, yes - I'm sure you did find that to your liking.



Duke of Marmalade said:


> Wrong, wrong wrong You clearly have a blind spot here. The digital entries of fiat on peoples bank accounts are every bit as divisible as bitcoin, if need be.


Repeat after me: _"Alexa, how many places of decimal does FIAT currency have?"._

I'm sure he's comparing native features of each currency - but fine - it can be divided further even if it's not a native feature of the currency.  As I said before, in that context, it's not such a big deal.  However, my point above stands - it will have little need to go into so many places of decimal as CBs keep printing up magic money.  Only hard money needs eight places of decimal.


----------



## Duke of Marmalade

tecate said:


> Repeat after me: _"Alexa, how many places of decimal does FIAT currency have?"._


Hi _Alexa_.  As an entry on a digital account, as many as it takes.  Bitcoin has a limit but I am sure the While Night LN will address even that limit.  _Alexa_ if you are the sort of gal who likes to do your business in notes and coin, I have bad news for you, the smallest unit in fiat  is the cent. On the other hand crypto is not for you. 
_tecate _you clearly have a blind spot  on this, I won't drag this particular point any further for fear of being banned from AAM for drop bombing boredom.


----------



## tecate

Duke of Marmalade said:


> Bitcoin has a limit but I am sure the While Night LN will address even that limit.


Not sure what you're referring to here.



Duke of Marmalade said:


> _tecate _you clearly have a blind spot  on this


I'm unsure what further clarification is required beyond the last exchange of posts.


----------



## tecate

Firefly said:


> I must say I didn't have tecate down for a communist being a proponent of a no government "currency" such as Bitcoin.


Here's an opportunity for you to out yourself as a commie, Firefly.  

Bloomberg: The Fed becomes buyer of corporate bonds

In the course of these discussions, many of you have slated trustless Bitcoin and told us that Central Banks can do no wrong.  This is a latent example of socialism for the rich.  CBs make mistakes and they take decisions all the time that affect citizens unequally.  This is one of them.


----------



## Duke of Marmalade

tecate said:


> Not sure what you're referring to here.
> 
> I'm unsure what further clarification is required beyond the last exchange of posts.


Bitcoin does not have any edge theoretical or otherwise on divisibility.  Back off.


----------



## WolfeTone

_deleted-off topic_


----------



## tecate

Duke of Marmalade said:


> Bitcoin does not have any edge theoretical or otherwise on divisibility.  Back off.


What has been clear from the outset of this aspect of the discussion is that gold is the one that loses out in terms of divisibility.  That Bitcoin is scored slightly better than FIAT in terms of divisibility is technically correct.  It's yourself that's sensitive on that score and I think you should park it up yourself.  If not, please cite a similar comparison that doesn't score Bitcoin and FIAT in this way when it comes to divisibility.


----------



## tecate

WolfeTone said:


> We really are in the realm of fantasy economics. Capitalism is dead now, how much longer is the pretense going to continue for? In the end, it isnt nuclear holocaust, famine or rising ocean levels, instead it is a tiny microscopic virus that is sticking the final nail in the coffin.


This provides some good commentary on the Fed's corporate bond buying announcement:

https://twitter.com/gaborgurbacs/status/1272647910543556615?s=20


The kicker is that it's being done to bolster corporates - not mom n' pop businesses.  This is precisely the type of inequitable Central Bank behaviour that led to the launch of Bitcoin in the wake of the 2008 financial crisis.  We also have a new development in the world of financing with the advent of the Initial Bankruptcy Offering (IBO).


----------



## Duke of Marmalade

tecate said:


> What has been clear from the outset of this aspect of the discussion is that gold is the one that loses out in terms of divisibility.  That Bitcoin is scored slightly better than FIAT in terms of divisibility is technically correct.  It's yourself that's sensitive on that score and I think you should park it up yourself.  If not, please cite a similar comparison that doesn't score Bitcoin and FIAT in this way when it comes to divisibility.


I searched but couldn’t find any other divisibility comparison between bitcoin and fiat. 
However I found This link which is probably the most objective general comparison I have found, nearly all other comparisons are written from a bitcoin bias.  It is unambiguous that bitcoin could have no value.
What I did find was a reference that bitcoin could be divided further if needs be by a change in the protocol.  Fiat is similarly infinitely divisible without needing changes in protocol.  It is a total red herring yet Mr Kelleher marks fiat down against bitcoin on this score.
Gold, diamonds, rubies, real estate and works of art are all more or less indivisible.  They are all stores of value. Divisibility is not in any way a requirement of a store of value.  Why did you include it in your list which you have asserted on many occasions was only addressing the store of value aspect?


----------



## Leo

tecate said:


> Not natively you don't - and the bigger point is that what you describe with the Euro is only possible through a centralised party.  Bitcoin is decentralised - it's a technology of trust.



As a consumer, why do I care if the functionality is native or not? What's the benefit? The only reason I can see where that might have value is if I want to start coding again so I can create my own smart contracts. The vast majority of people aren't going to do that, we they will use the services created by third parties just like I do with fiat today. 

A technology of trust with no accountability and no oversight. I prefer to have my bank, Mastercard or Visa providing oversight and protecting me from fraudsters and giving me the ability to reverse a transaction should I send money to the wrong account.  




tecate said:


> Review the definition of a micro-transaction here.  They make plenty of sense - and visa can't transact them economically.



Brilliant, so show me an example of where these micro-transactions transact at tiny fractions of a cent?



tecate said:


> I think you need to review what the Lightning Network is then - as you must be misunderstanding something.



Thanks, I understand it well enough to know it is not bitcoin. 



tecate said:


> There was 'hype' back in late 2017 surrounding Bitcoin/Crypto/Blockchain/DLT/Smart Contracts.  I'm not aware of any hype right now.



Almost 3 years later, in an era of hyper-adoption, they haven't changed the world, maybe it's time to move on from thinking all money needs to support smart contracts.



tecate said:


> It will allow people to take control over their own digital identity - and in turn take greater control with regard to their data and privacy of said data. Included in that will be the facilitation of the ability to sell personal data (or aspects of it) or not.



How? 



tecate said:


> That's not my understanding but you're the expert apparently.



In a decentralised system, where is the data stored? In a private database in a secure data center?



tecate said:


> If it's all automated and the only thing that the consumer has to do is select certain options on a decentralised application, then why not?



A complete financial profile costs less than $0.005 per person at the moment, and that's way more data than most people will ever willingly share. If decentralisation ends up with more people exposing their data, do you think the price will go up or down?



tecate said:


> Compliance is part of the legacy world.  The type of 'compliance' you are referring to was never envisaged with decentralised digital currencies in mind.  When I send Bitcoin from my Bitcoin wallet to someone elses Bitcoin wallet, there's no regulation involved - it wasn't designed with that in mind as it isn't designed to be part of the conventional system.



So you're happy to encourage money laundering and facilitating rogue states like North Korea get around international sanctions? Regulation of financial services serves the greater good. It's not always done well, but we don't make murder legal just because we don't convict 100% of perpetrators. 

Again, what about decentralisation prevents compliance?


----------



## Leo

Duke of Marmalade said:


> The digital entries of fiat on peoples bank accounts are every bit as divisible as bitcoin, if need be. And there is no constraint on digital transactions as evidenced by me giving an example of Airtricity charging €0.1496 per unit. You are being blinded by the granularity of its coin, which is not relevant to the divisibility debate.



That's a very good point, the crypto believers seem to limit their interpretation of money to the physical manifestation. I wonder why the fixation on that, is it because they long to hold something that represents bitcoin?  

Divisibility without function is pointless, unless there is demand to transact at sub cent levels, bitcoin is more divisible than is useful.


----------



## Duke of Marmalade

Leo said:


> That's a very good point, the crypto believers seem to limit their interpretation of money to the physical manifestation. I wonder why the fixation on that, is it because they long to hold something that represents bitcoin?
> 
> Divisibility without function is pointless, unless there is demand to transact at sub cent levels, bitcoin is more divisible than is useful.


Kelleher displayed either a woeful naïveté or just a self fulfilling desire to drum up any advantage for bitcoin in bigging up this divisibility thing.  _tecate _should know better but he has this trait that once he starts to defend a point he just won't drop it against all the odds.
I don't think he has made one concession so far. I, on the other hand, have made the humiliating concession to Wolfie that the cult status of bitcoin has greatly weakened my conviction that it is going to zero any time soon.


----------



## elacsaplau

Duke of Marmalade said:


> ...…….but he has this trait that once he starts to defend a point he just won't drop it against all the odds.



kettle calling _black_ pot the the?


----------



## Duke of Marmalade

Flattering to see the usual hurlers on the ditch pouring over my every word


----------



## tecate

Duke of Marmalade said:


> It is a total red herring yet Mr Kelleher marks fiat down against bitcoin on this score.


I guess we'll have to go back over this one more time.  It was more or less agreed that the greater point in terms of divisibility was that gold fails the test.  However, Kelleher - who you introduced to the discussion - is technically right.  As it stands today, Bitcoin has EIGHT places of decimal.  FIAT has TWO.



Leo said:


> That's a very good point, the crypto believers seem to limit their interpretation of money to the physical manifestation. I wonder why the fixation on that, is it because they long to hold something that represents bitcoin?


Wishful thinking my friend. :-D



Leo said:


> Divisibility without function is pointless, unless there is demand to transact at sub cent levels, bitcoin is more divisible than is useful.


Ok, so you at least accept that it is more divisible.  Can you go and tell Dukey as he seems a tad confused.  As regards function, FIAT has extra 'ability' that Bitcoin doesn't have.  It can just be printed off - there's no limit to it.  That's why those eight places of decimal are needed for hard money (Bitcoin) and they're not necessary for 'money printer go brrr' FIAT.



Duke of Marmalade said:


> Kelleher displayed either a woeful naïveté or just a self fulfilling desire to drum up any advantage for bitcoin in bigging up this divisibility thing.


As outlined previously, you introduced him/his article to this discussion without citing his work but selectively quoting his article out of context because a particular tract of text in isolation supported your world view.  Now, you trash talk his article.  You couldn't make this stuff up.
Secondly, you can dispute it all you want but the facts don't lie.  Bitcoin has EIGHT places of decimal, FIAT money has TWO.  He's not wrong to point this out.  You have been invited to cite another source that sources Bitcoin and FIAT differently on this fundamental characteristic - and you've failed despite having tried to source a differing view.



Duke of Marmalade said:


> _tecate _should know better but he has this trait that once he starts to defend a point he just won't drop it against all the odds.


You mean I won't be brow beaten into accepting an untruth from you?  Sounds about right.



Duke of Marmalade said:


> I don't think he has made one concession so far.


I haven't had to make 'concessions'.  I can list off a whole host of issues and challenges with Bitcoin/cryptocurrency that I readily acknowledged/brought up myself without any pressing from you or anyone else.  Contrast that with you and others taking the naysayer/no-coiner side of this discussion.  I've brought this up a few times.  How many positive characteristics of Bitcoin have you acknowledged?  Answer - not one.
That to me lacks credibility.


----------



## Firefly

tecate said:


> You mean I won't be brow beaten into accepting an untruth from you?  Sounds about right.


QED..


----------



## tecate

Leo said:


> As a consumer, why do I care if the functionality is native or not? What's the benefit? The only reason I can see where that might have value is if I want to start coding again so I can create my own smart contracts. The vast majority of people aren't going to do that, we they will use the services created by third parties just like I do with fiat today.


There's a third party involved.  If you can't see the benefit of peer to peer value transfer then I can't help you.
Nobody ever suggested that consumers would start coding their own smart contracts! 



Leo said:


> A technology of trust with no accountability and no oversight.


The accountability comes via opensource code that is open to community scrutiny. 



Leo said:


> I prefer to have my bank, Mastercard or Visa providing oversight and protecting me from fraudsters and giving me the ability to reverse a transaction should I send money to the wrong account.


Go and use it then - and pay the 3% extra for the billions that are clocked up in credit/debit card fraud every year then (the 3% being rolled in to the price of the good/service).  So if you had the opportunity to pay $10 for something with visa or $9.50 with Bitcoin, you'd still pay with visa right?



Leo said:


> Thanks, I understand it well enough to know it is not bitcoin.


Luckily not everyone is going to judge this based on your semantics.  Whether you like it or not, Lightning Network is developing nicely into a role where it can effect Bitcoin transfers at scale - with low transaction time/cost.



Leo said:


> Almost 3 years later, in an era of hyper-adoption, they haven't changed the world, maybe it's time to move on from thinking all money needs to support smart contracts.


Another guy in a hurry!  How long did the development of the internet, AI, mobile tech, IoT or any other technology take?
Nobody said that money 'needs' to support smart contracts.  However, clearly its a feather in its cap if it can.  Or are you going to suggest to everyone that there's no value in smart contracts whatsoever?



Leo said:


> How?


Go read up on decentralised identities and find out.  We've been here many times before - i'm not going running around fetching and carrying for you Leo.



Leo said:


> In a decentralised system, where is the data stored? In a private database in a secure data center?


If you are saying that I don't have the knowledge and claiming that you do, then drop the questions and start with the answers.



Leo said:


> A complete financial profile costs less than $0.005 per person at the moment, and that's way more data than most people will ever willingly share. If decentralisation ends up with more people exposing their data, do you think the price will go up or down?


I guess we'll see how it all pans out.  All these foolish people going to great trouble to establish decentralised data marketplaces.  Don't know what they could be thinking of!



Leo said:


> So you're happy to encourage money laundering and facilitating rogue states like North Korea get around international sanctions?


I never said such a thing. 


Leo said:


> Regulation of financial services serves the greater good.


By trampling over people's financial privacy?  Try again!


Leo said:


> It's not always done well


No kidding?  That's an understatement.  The friction it causes is unreal.  The cost of such systems is unreal - and is ultimately borne by the consumer.  Financial services companies and banks have no business taking the role of the police - they'll tell you that themselves.



Leo said:


> we don't make murder legal just because we don't convict 100% of perpetrators.


I'm not even sure what this is for an analogy.



Leo said:


> Again, what about decentralisation prevents compliance?


Asked and answered.  That you don't like the answer is your problem Leo.


----------



## tecate

Firefly said:


> QED..


If you mean QED insofar as I won't countenance blatant lies, then sure - we're on the same page


----------



## Duke of Marmalade

tecate said:


> I guess we'll have to go back over this one more time.  It was more or less agreed that the greater point in terms of divisibility was that gold fails the test.  However, technically, Kelleher - who you introduced to the discussion - is technically right.  As it stands today, Bitcoin has EIGHT places of decimal.  FIAT has TWO.


I too am going to try one more time, probably the last as this really is a mole hill made into a small hillock by Keleher and promoted to Mount Everest by your good self.
If I fail to get the satoshi to drop this time then I can only come to one of three conclusions.
1.  I am just hopeless at explaining these things, though Leo gets the point.  I suspect that even some of the hurlers on the ditch get it too.
2.  It is not General Relativity but it is a reasonably nuanced point confronting first impressions.  If it is beyond your intellectual capacity then it would be unfair of me to keep exposing that deficiency.
3.  Having taken a position you will die in a ditch before you withdraw from it. Given that after 21 pages of mostly dialogue you are of the view that nothing that you have said needs corrected this third would I think be the correct explanation. You might be PM of the UK some day.

So here goes one more time, very very slowly.
I am not so versed in the minutiae of bitcoin as your good self and was surprised to learn that in fact bitcoin's divisibility is not at all limited to 8 decimal places.  By changes  to the protocol the divisibility of bitcoin is in fact unlimited.
So to is fiat in its digital manifestation except it doesn't even need the equivalent of a change to the protocol to go to whatever number of decimal places its customers may demand.  The understandable illusion that entrapped Mr Kelleher is the granularity of its physical manifestation or maybe the fact that there isn't an actual name for € .0000001, say, whereas there is a name for 1/100 millionth of a bitcoin - the satoshi.


----------



## tecate

Duke of Marmalade said:
			
		

> I too am going to try one more time, probably the last as this really is a mole hill made into a small hillock by Keleher and promoted to Mount Everest by your good self.


You're the one that's labouring the point Dukey - when it has been acknowledged from the outset that in the comparison of gold/bitcoin/FIAT in terms of divisibility - gold is the loser.  That's not Kelleher's doing - he's technically correct to say that Bitcoin has greater divisibility than FIAT.  One has eight places of decimal - the other has two places of decimal.  What part of that do you not understand?
I also invited you to cite another interpretation that didn't demonstrate the same ranking as Kelleher and you've been unable to do so.



			
				Duke of Marmalade said:
			
		

> 2. It is not General Relativity but it is a reasonably nuanced point confronting first impressions. If it is beyond your intellectual capacity then it would be unfair to keep exposing that deficiency.


You can't prove your point so you will resort to this nonsense?  As you wish, Dukey.



			
				Duke of Marmalade said:
			
		

> 3. Having taken a position you will die in a ditch before you withdraw from it.


As alluded to in my last post, there's a very quick and easy test for this.  Outline to readers where you have once acknowledged a positive trait of Bitcoin.  On the flipside, I can list a whole host of posts where I've drawn attention to shortcomings and challenges facing Bitcoin. 



			
				Duke of Marmalade said:
			
		

> Given that after 21 pages of mostly dialogue you are of the view that nothing that you have said needs corrected


I'm sorry that you feel aggrieved that our opinions on aspects of the subject differ. 
The fact of the matter is that over the years, I've learned plenty from others on discussion boards such as this.  The irony is that you continually claim that Bitcoin is a 'cult' when in fact your own preconceived notions and an underlying deep seated political view is clouding your ability to assess Bitcoin pragmatically.



			
				Duke of Marmalade said:
			
		

> So here goes, very very slowly.
> I am not so versed in the minutiae of bitcoin as your good self and was surprised to see that in fact bitcoin's divisibility is not at all limited to 8 decimal places. By changes to the protocol the divisibility of bitcoin is in fact unlimited.
> So to is fiat in its digital manifestation except it doesn't even need the equivalent of a change to the protocol to go to whatever number of decimal places its customers may demand. The understandable illusion that entrapped Mr Kelleher is the granularity of its physical manifestation or maybe the fact that there isn't an actual name for € .0000001 whereas there is a name for 1/100 millionth of a bitcoin - the satoshi.


As outlined above and in far too many posts on this thread than should be needed....
- Bitcoin has eight places of decimal - FIAT money has two..  Kelleher and his article were introduced to this discussion by you.  At this point, I'd suggest you contact him directly if you feel that strongly about it.  And everyone else that published such a table - as it seems all the ones you found in your search were the very same.


----------



## Leo

tecate said:


> Ok, so you at least accept that it is more divisible. Can you go and tell Dukey as he seems a tad confused.



They're both divisible to the point of futility, why go further? Crypto fans have failed to justify why they feel this is such a strong point.



tecate said:


> There's a third party involved. If you can't see the benefit of peer to peer value transfer then I can't help you.
> Nobody ever suggested that consumers would start coding their own smart contracts!



So no benefit over my current use of fiat, thanks.



tecate said:


> So if you had the opportunity to pay $10 for something with visa or $9.50 with Bitcoin, you'd still pay with visa right?



Give me an example of one thing I can buy with bitcoin for $9.50 that would cost $10 with Visa?



tecate said:


> Lightning Network is developing nicely into a role where it can effect Bitcoin transfers at scale - with low transaction time/cost.



No, you're effectively buying LN tokens with bitcoin that you can then trade or exchange (assuming there's a funded path established), and at a later date you can trade those tokens back for bitcoin. There isn't a single bitcoin that lives on the lightning network.



tecate said:


> Another guy in a hurry! How long did the development of the internet, AI, mobile tech, IoT or any other technology take?



Well, IoT to take one of your examples is considered to have taken up to 8 years for mass adoption, some claim less. Mass adoption of eBooks took a similar timeframe, mass adoption of tablet computing was even quicker, mass adoption of microwave ovens also happened very quickly. We're 11-12 years into bitcoin, the rate of adoption is actually quite slow.



tecate said:


> Go read up on decentralised identities and find out. We've been here many times before - i'm not going running around fetching and carrying for you Leo.



So you don't understand well enough to back up your claims, fine.


----------



## Duke of Marmalade

tecate said:


> - Bitcoin has eight places of decimal - FIAT money has two..


I fear that it may be explanation 2 in post #414 that prevents you understanding that fiat in its digital manifestation is not restricted to 2 decimal places.  Ask Airtricity - €0.1496 per unit .  Ask any life company who routinely quote their unit prices to 3 decimal places. 
It would be unfair of me to keep exposing your blind spot on this, so relax I will spare your blushes.


----------



## Leo

Duke of Marmalade said:


> The understandable illusion that entrapped Mr Kelleher is the granularity of its physical manifestation or maybe the fact that there isn't an actual name for € .0000001, say, whereas there is a name for 1/100 millionth of a bitcoin - the satoshi.



He also doesn't grasp the reality that consumer demand is for less divisibility, look at the success of the elimination of 1 & 2c coins from circulation. Also, in PAYE calculations, credits and benefits are rounded to the nearest Euro in the individual's favour.


----------



## WolfeTone

Im going to stick my nose in here and hopefully broker a truce, albeit I take the liberty of thinking that I understand each position?

The question of divisibility. I think it is agreed that bitcoin and fiat beat gold hands down? The question is the difference between bitcoin and fiat alone.

I think _Duke _and _Leo _are correct in saying that bitcoin is no more divisible than fiat as, depending where the decimal point is placed

Fiat      10000000.00
Bitcoin 10.00000000

both equally divisible, and accepting the fixed position of the decimal point, to the _left_ the number is infinite.

_tecate _is correct in saying that bitcoin is more divisible at a _micro level_.
_Leo _is correct to ponder 'so what? who buys stuff at a micro level'.

So a little example perhaps.

According to todays exchange rate, 1 Vietnamese Dong will buy you circa 0.00004240 US dollars. According to tradingeconomics.com, the 'living wage' of an individual in Vietnam is circa 5,500,000 Vietnamese Dong, or $234 a month.
Now Im not sure how far 5.5m Dong will go, but ifs its a 'living wage' then perhaps enough to feed, clothe, keep the lights on and not much else.
If there is any change left over, I suspect it could be in the region of cents, or a few dollars at best.

Although a participant and contributor in the global economy he is blocked out from perhaps exploiting the true value of the fruits of his labour by virtue of not having access to the worlds leading currencies of $ or € or £Stg, instead he gets paid in Dong. His labour would extract maybe $10 ph in the US. In Vietnam its roughly $1.4ph.
He is not alone, there are billions of people like him, aspiring to the first world in any way they can - even to the point of suffocating in the back of airtight refrigerated lorries, or travelling in overcrowded vessels and drowning in the Mediterranean for instance.

On the other hand, if he has a smart phone, internet connection and a private wallet he could convert or receive bitcoin for his Dong. If he bought back in 2008, he could be retiring himself and his family now. If he buys today, for sure he may only receive, say 0.00097235 of a bitcoin but at least it is 0.00097235 of something, rather having no access at all. So there is hope, albeit highly speculative.

_tecate _has frequently referenced the people's of the second and third world, the unbanked. He has often citied these people are who are excluded, in no small part because the global financial system is unduly dominated by first world bungling financial overseers.
Bitcoin offers, or its concept does, a level playing field to everyone. Given the price of one bitcoin to $9000, the micro divisibility is an advantage over fiat.


----------



## Duke of Marmalade

I am sure you mean well _Wolfie_.  I think what you are saying is that fiat has the scope to be as divisible as people want it to be but bitcoin currently facilitates more divisibility.  Thus I agree that it is not actually possible to have an account balance in your high street bank less that 1 cent.  I suppose it is possible to have just 1 satoshi in your bitcoin wallet.  Mr Kelleher rates fiat a notch below bitcoin on divisibility and his commentary indicates that he does not think this to be a negligible disadvantage.
As to gold versus fiat versus bitcoin, physical gold is obviously left for dead when it comes to divisibility (albeit gold backed currency got round that).  But that is only relevant as a medium of exchange.  _tecate_ has included divisibility as a factor in store of value, which clearly it isn't, witness gold, diamonds, rubies, real estate, works of art.


----------



## Leo

WolfeTone said:


> _tecate _has frequently referenced the people's of the second and third world, the unbanked. He has often citied these people are who are excluded, in no small part because the global financial system is unduly dominated by first world bungling financial overseers.



2 out of every 3 unbanked say they are so because they don't have sufficient money to justify opening an account. When everything you earn goes to feed your family and keeping a roof over your heads, having a bank account or the ability to hold bitcoin is of little value,  You also can't overlook that a very large portion of those people have no independent means (women mainly). Also significantly for women in a number of countries with larger shares of unbanked, once married they are expected to hand over full financial control to their husbands. Accounts being too expensive is only cited by a very small percentage as the sole reason they do not have an account.


----------



## WolfeTone

Jeepers, I was only pointing out that bitcoin being divisible to eight decimal points makes it more accessible to people of third world incomes than first world currencies. 

If that is not agreeable, then I have failed in my peace making mission and shall say no more.


----------



## Leo

WolfeTone said:


> Jeepers, I was only pointing out that bitcoin being divisible to eight decimal points makes it more accessible to people of third world incomes than first world currencies.



A noble effort no doubt, but just to add more salt to the woulds you need to consider that currencies in the third world are generally denominated in units much smaller than the dollar, and in many cases so small as the become cumbersome when coupled with high inflation.


----------



## Gus1970

Leo said:


> In a decentralised system, where is the data stored? In a private database in a secure data center?



In the blockchain


----------



## Gus1970

Leo said:


> Divisibility without function is pointless, unless there is demand to transact at sub cent levels, bitcoin is more divisible than is useful.



Micropayments between IOT devices are a use case for this. That’s one reason why divisibility can be important.


----------



## tecate

Leo said:


> They're both divisible to the point of futility, why go further? Crypto fans have failed to justify why they feel this is such a strong point.


It's yourself and his Dukeness that have laboured the point.  From the very start of this part of the discussion, I am on record as saying that divisibility is a core characteristic of any currency - but in the comparison of gold/bitcoin/FIAT in that respect, the significant take away is that gold is in no way divisible and on that basis alone, it's not suitable as a medium of exchange.
It's not of major consequence the difference between FIAT and Bitcoin in terms of divisibility.  However, despite Dukey's protestations, Kelleher is not wrong to score one as moderate and the other as high for this characteristic because strictly speaking one has eight places of decimal and the other has two.  Yes, in practice you could digitally divide it further - but that doesn't make him wrong.  That's also why Dukey has not been able to find another commentator that has compared them differently.
Why we have to go back and forth on this makes no sense to me.  However, Kelleher has not stated anything that is inaccurate in this respect.



Leo said:


> So no benefit over my current use of fiat, thanks.


Only because you're diametrically opposed to crypto - and in that case, you're quite right Leo - you shouldn't go anywhere near it.  Just like I said, if there was a discount for paying with Bitcoin (which oftentimes there is as the vendor saves on credit card fees) you'd still not avail of it because of what amounts to a political view rather than a pragmatic view.
But that's fine - horses for courses - there are plenty on the planet that can see the value in it on that basis.  There are plenty that see the power in peer to peer transactions without an intermediary.



Leo said:


> Give me an example of one thing I can buy with bitcoin for $9.50 that would cost $10 with Visa?


In your case, completely pointless as you have no notion at looking at this pragmatically.  My question was would you pay the equivalent of $9.50 with Bitcoin or would you pay $10 via your bank/visa.  It's a simple enough question - and it doesn't get answered with the unnecessary follow up question.



Leo said:


> No, you're effectively buying LN tokens with bitcoin that you can then trade or exchange (assuming there's a funded path established), and at a later date you can trade those tokens back for bitcoin. There isn't a single bitcoin that lives on the lightning network.


Bitcoin is implicated on opening and closing an LN channel.   The point you are making doesn't make a blind bit of difference to the user.  As far as they're concerned, they're paying with Bitcoin.  I have a LN wallet with Bitcoin loaded in it.  Not anything else - Bitcoin.  I can have someone else install the very same wallet and receive Bitcoin.  It's that simple.
Incidentally, the World Economic Forum (WEF) has just recognised Lightning Labs  - one of the prime developers behind LN - in its list of top 'early to growth stage' companies - for their contribution towards cutting edge technology.



Leo said:


> Well, IoT to take one of your examples is considered to have taken up to 8 years for mass adoption, some claim less. Mass adoption of eBooks took a similar timeframe, mass adoption of tablet computing was even quicker, mass adoption of microwave ovens also happened very quickly. We're 11-12 years into bitcoin, the rate of adoption is actually quite slow.


I see.  This is intriguing.  My understanding was that the origins of the IoT go back to the early eighties.  eBooks? - I'm sorry but that's in no way comparable!  I see you didn't give the timeline for my other examples - the internet or AI?  Are you suggesting that there should be a cut off point for tech - that at a given date, all innovation stops?  That would make a whole lot of sense, right?
Furthermore, when you say adoption, has the innovation part stopped already? - because from where I'm standing, it's only getting going.

Tell me, did fibre internet just burst out of the starting blocks on day one?  Do you remember dialup?  There were different standards within dial-up - let alone what has come along after it.  If we were to judge the ability to get online back then, who would have been using the internet and for what?  That progress was iterative.  It's funny how you work in tech and you don't understand that.



Leo said:


> So you don't understand well enough to back up your claims, fine.


That's inaccurate but if that delusion makes you feel better - peachy!



Duke of Marmalade said:


> I fear that it may be explanation 2 in post #414 that prevents you understanding that fiat in its digital manifestation is not restricted to 2 decimal places.  Ask Airtricity - €0.1496 per unit .  Ask any life company who routinely quote their unit prices to 3 decimal places.
> It would be unfair of me to keep exposing your blind spot on this, so relax I will spare your blushes.


There is no 'blind spot'.  I acknowledged that whilst it's not a definitive part of FIAT that further digital division is possible.  Go back and re-read previous posts.  It's a misrepresentation to claim that.  The issue has been that you have suggested that there's some inaccuracy on Kelleher's part in relation to divisibility.  That's incorrect.  He has compared them as they have been set out - and they have been set out such that Bitcoin has eight places of decimal and FIAT has two.  You must be harbouring some deep seated insecurities in terms of the case for FIAT currency given the way you're labouring on this point.



Leo said:


> He also doesn't grasp the reality that consumer demand is for less divisibility, look at the success of the elimination of 1 & 2c coins from circulation. Also, in PAYE calculations, credits and benefits are rounded to the nearest Euro in the individual's favour.



As I've outlined already, Bitcoin needs eight places of decimal because it's the hard money that's alluded to in Gresham's Law.  FIAT continues to rob ordinary people through inflation and rampant money printing - so it will not need to go to eight places of decimal.



Duke of Marmalade said:


> _tecate_ has included divisibility as a factor in store of value, which clearly it isn't, witness gold, diamonds, rubies, real estate, works of art.


That's incorrect. I haven't.  However, I have cited Vijay Boyapati - who has included it in his comparison of gold/fiat/bitcoin as a store of value.  I would say it makes complete since that it belongs in both comparisons - that of store of value and that of means of exchange.
You have a lump of gold or a piece of gold jewelry.  You want to pass it on to your two sons/daughters.  What do you do - take a hammer to it?  Of course it's relevant - but it has a higher relevance within the context of consideration of the characteristics of what makes a good means of exchange.



Leo said:


> Accounts being too expensive is only cited by a very small percentage as the sole reason they do not have an account.


That's incorrect.  Now it's time to talk about compliance!  This unwieldy worldwide AML/KYC compliance and regulatory regime - together with the banks - is disenfranchising these people.  Significant costs come with all of that nonsense  - and on that basis, banks won't bank the unbanked.   The system fails them.
The notion that they don't need access to banking is also nonsense.  I have paid people that didn't have access to a bank account on numerous occasions.  Either that had to be done in cash or using a remittance service that charges poor people 9% on transfers in-country with no FX required!  There's plenty of money to be made off the backs of poorer classes too.

The same with the 55 million of unbanked or under banked in the US - they end up availing of cheque cashing services at exhorbitant rates - and payday loans as they wait for cheques to clear in the deliberately archaic US banking system.


----------



## Duke of Marmalade

WolfeTone said:


> Jeepers, I was only pointing out that bitcoin being divisible to eight decimal points makes it more accessible to people of third world incomes than first world currencies.
> 
> If that is not agreeable, then I have failed in my peace making mission and shall say no more.


Fair play to you _Wolfie _you have wrested another concession from me.  I concede that third world folk cannot have a $ account less than 1c whereas a lesser constraint applies to bitcoin, if said third world folk have a smartphone.  See how I keep giving.
But this is not a systemic weakness of fiat, it's just that in the first world the demand for accounts less than 1c are limited and so most banks do not facilitate them.


----------



## tecate

Duke of Marmalade said:


> another concession from me.


A career in stand-up awaits you, your Dukeness.  By all means, link to one previous post where you have acknowledged one positive characteristic of Bitcoin.  Despite 2 years of posts, you won't be able to.
Brendan outdoes you though, what with the double standards that are being applied in considering Bitcoin vs. Gold vs. FIAT currency.



Duke of Marmalade said:


> I concede that third world folk cannot have a $ account less than 1c


You can try and twist this all day long - but that's not the reality of the unbanked.  The reality is that they can't gain access to a bank account because of this unwieldy worldwide regulatory and compliance regime  (KYC/AML) that has been put in place.  That comes with costs - and when the unbanked can't meet these ridiculous requirements or they're not lucrative enough for banks to be bothered with - especially in consideration of the compliance/regulatory overhead then it's a case of tough luck.  That doesn't mean accounts with just a few cents.



Duke of Marmalade said:


> if said third world folk have a smartphone.


I live in the developing world - practically everyone here has what would be termed a smartphone - oftentimes with cracked screens but they've got them.


----------



## WolfeTone

Duke of Marmalade said:


> I concede that third world folk cannot have a $ account less than 1c whereas a lesser constraint applies to bitcoin, if said third world folk have a smartphone.



My example was more specific to Vietnam (is it a third world country, im not sure?) and $1.4ph 'living wage'. Smart phone usage is, according to this link, estimated at 40% of the population. Some 78% in Ireland (which I thought a bit low) with €10.10ph minimum wage.

Vietnam smart phone usage
Ireland smart phone usage

I was also trying to be a bit specific on the amount of bitcoin 0.00097235, in case you thought it was random? At $9,000 BTC, the price paid for 0.00097235 would be $8.75 or some 206,000 Viet Dong - roughly a days wages. So thinking that perhaps, a hard working Vietnamese may spare off a days wage or two in a month to invest somewhere? In the $US or BTC? I would suggest, albeit I'm open to correction, that BTC would be far more accessible and far more useful in the long-run.

According to this link
49million Vietnamese have no bank account

I'm just wondering, the smartphone and BTC have been with us for what, 12-14yrs?
The international banking system has been with us for how long? Yet in comparison, the smartphone has extended its reach into the Vietnamese population in lightening speed by comparison to the banking system. I can't help think that the next generation of youth, globally, with internet technology are going to rip these ancient, inefficient institutions apart and before they even know what's happened to them.

That is just my hunch.


----------



## Duke of Marmalade

@WolfeTone and @tecate I was speaking specifically to the divisibility debate not the more general aspects of unbanked  folk in the undeveloped (carefully avoiding Third) world.
I now accept that whilst there is absolutely no systemic limit to the divisibility of fiat (witness electricity charges and unit fund prices) there is in practice no facility to have bank accounts which allow balances with more than two decimal places.  This is not an issue for me and people in the developed world but it shows the narrowness of my outlook that I didn't recognise that there could be a big demand for such a facility in the undeveloped world.  _Theo _has exposed my narrowness of vision in that regard.


----------



## Leo

Gus1970 said:


> In the blockchain



Exactly my point, thanks. And anyone can view or download the entire chain.


----------



## Leo

Gus1970 said:


> Micropayments between IOT devices are a use case for this. That’s one reason why divisibility can be important.



That's an example already cited and addressed earlier in the thread. There's no demand or utility to such low level transactions.


----------



## Leo

tecate said:


> That's inaccurate but if that delusion makes you feel better - peachy!



Oh I've walked into a trap, it should be quite easy for you to prove it's innacurate, right? 

Let's focus on one point at a time.


----------



## Gus1970

Leo said:


> That's an example already cited and addressed earlier in the thread. There's no demand or utility to such low level transactions.



There was no demand on smartphones two decades ago


----------



## WolfeTone

Duke of Marmalade said:


> This is not an issue for me



I do detect the tone of "well, if I'm alright Jack....what's the issue?" permeating throughout your posts. Others, to lesser or greater extent, do tend to have a more broader outlook in general and can empathize more on the impact of affairs on others even if such affairs are unlikely in the extreme to ever impact directly on themselves.

Such as, say, the Black Lives Matter movement. I'm not black, I don't live in fear of the police, so why would I have to concern myself about it? What exactly is the problem with these people? Probably their own doing, right?

It did not take me very much effort to dip a cursory toe into racial matters of the US to understand that, yes, there is very much a deeply and profoundly embedded culture of discrimination and racism in that country against African-Americans. That affords me to develop a perspective that even if I am not directly affected, I, or my family or community may be indirectly affected, if not now, but in the future in some similarly negative way.
I take these things into account when developing my own perspective on matters.

I'm not, by the way, suggesting that you are in any way racist, I'm just using it as another example of how if something does not affect you directly you quite often openly dismiss or question the substance, merit or value (or lack of) of the thing that is directly affecting others, eg - bitcoin, religion (outside of your own beliefs), BLM, 49m people in Vietnam with no bank accounts.



Duke of Marmalade said:


> This is not an issue for ... people in the developed world



It is actually.


----------



## Duke of Marmalade

WolfeTone said:


> I do detect the tone of "well, if I'm alright Jack....what's the issue?" permeating throughout your posts. Others, to lesser or greater extent, do tend to have a more broader outlook in general and can empathize more on the impact of affairs on others even if such affairs are unlikely in the extreme to ever impact directly on themselves.
> 
> Such as, say, the Black Lives Matter movement. I'm not black, I don't live in fear of the police, so why would I have to concern myself about it? What exactly is the problem with these people? Probably their own doing, right?
> 
> It did not take me very much effort to dip a cursory toe into racial matters of the US to understand that, yes, there is very much a deeply and profoundly embedded culture of discrimination and racism in that country against African-Americans. That affords me to develop a perspective that even if I am not directly affected, I, or my family or community may be indirectly affected, if not now, but in the future in some similarly negative way.
> I take these things into account when developing my own perspective on matters.
> 
> I'm not, by the way, suggesting that you are in any way racist, I'm just using it as another example of how if something does not affect you directly you quite often openly dismiss or question the substance, merit or value (or lack of) of the thing that is directly affecting others, eg - bitcoin, religion (outside of your own beliefs), BLM, 49m people in Vietnam with no bank accounts.
> 
> 
> 
> It is actually.


Jayz _Wolfie  _I am discussing the divisibility of fiat/bitcoin and for some reason you decide to carpet bomb me with the whole armoury of Big Short moral superiority.


----------



## tecate

Duke of Marmalade said:


> @WolfeTone and @tecate I was speaking specifically to the divisibility debate not the more general aspects of unbanked  folk in the undeveloped (carefully avoiding Third) world.


And yet you're engaging in subterfuge to try and provide an alternate and wholly inaccurate reason for the unbanked issue.  As per post # 428, it's due to unwieldy AML/KYC compliance/regulation.  The cost of same and a decision by the banks to exclude a less lucrative subset of the population. However, that doesn't involve accounts with just a few cents in them as you're trying to suggest. 



Duke of Marmalade said:


> I now accept that whilst there is absolutely no systemic limit to the divisibility of fiat


And yet Kelleher was right all the while despite your protestations - as officially outlined, Bitcoin has eight places of decimal and FIAT currency has two. 



Duke of Marmalade said:


> _Theo _has exposed my narrowness of vision in that regard.


You?  A narrowness of vision?  I doubt anyone would dream of suggesting such a thing, your Dukeness.



Leo said:


> That's an example already cited and addressed earlier in the thread. There's no demand or utility to such low level transactions.


That's your opinion.  There's a whole industry emerging around both personal and IoT data relative to distributed ledger technology.



Leo said:


> it should be quite easy for you to prove it's innacurate, right?


That works both ways Leo.   This is a discussion - if you'd like to backup your own counter-claims then have at it.


----------



## WolfeTone

Duke of Marmalade said:


> Jayz _Wolfie  _I am discussing the divisibility of fiat/bitcoin and for some reason you decide to carpet bomb me with the whole armoury of Big Short moral superiority.



Yes, and presumably the purpose is to come to some sort of conclusion on its merits, or none, its value, none? 
After, how many pages now, nothing still settled?
So im just of the view that people with different perspectives obviously attribute value and merit to different degrees. 

Im not trying to be "morally superior", I suspect I am no more actively engaged in getting Vietnamese people to open bank accounts than you are. I merely pointing out that in the context of this discussion, considering the comparison between the advent of mobile internet technology and the international banking system way back when, that I see more value in bitcoin usage than you do. 
With regard to divisibility, if bitcoin were to go to $90k or $900k or more, the eight point decimal point of bitcoin still affords those in the developing world to participate in a global monetary system like bitcoin. 
Unlike the global fiat monetary system, dominated by a handful of leading currencies, they are excluded and will continue to be.


----------



## Leo

tecate said:


> That works both ways Leo.   This is a discussion - if you'd like to backup your own counter-claims then have at it.



There's not a whole lot of point in having a discussion with someone who makes claims but offers no evidence to back them up.

Following the trend of cult, it's like discussing religion with someone putting forward their faith as evidence of fact.


----------



## Duke of Marmalade

tecate said:


> And yet you're engaging in subterfuge to try and provide an alternate and wholly inaccurate reason for the unbanked issue.  As per post # 428, it's due to unwieldy AML/KYC compliance/regulation.


I agree but that is not a divisibility point. 
You will notice that _The Big Short_ has not been able to resist tilting the thread towards his world view obsessions.
Following advice from a AAM contributor whom I respect I have decided that  this thread has run its course as far as I am concerned.


----------



## tecate

Leo said:


> There's not a whole lot of point in having a discussion with someone who makes claims but offers no evidence to back them up.


In answer to that, I'd encourage you to go back and review this thread.  Nobody has provided more citations and underpinned the argument presented to the extent that I have.  On the flipside, if your objective is to provide for open discussion and debate (rather than simply sledging Bitcoin), then that will involve you bringing evidence to the table to back up your counter claim.



Leo said:


> Following the trend of cult, it's like discussing religion with someone putting forward their faith as evidence of fact.


I've long since provided my opinion on the tar and feathering of Bitcoin (through these 'cult' refererences) and those who see value in it.  It's unbecoming for anyone to participate in it and does nothing to further your argument against Bitcoin.  The default fall back position to this nonsense is relied upon when folks here can't make a tangible case against Bitcoin and decentralised digital currencies.


----------



## WolfeTone

Duke of Marmalade said:


> You will notice that _The Big Short_ has not been able to resist tilting the thread towards his world view obsessions.



Oh dear! I detect a tone. 

In fairness, it was I who offered to say no more should I not be able to find some mutual understanding on the divisibility issue. I have used the plight of the billions of unbanked in the face of emerging new technology v inefficient institutions but may have inadvertently overstepped the mark with my intrusions.
So I will park it here on this topic.


----------



## Leo

tecate said:


> then that will involve you bringing evidence to the table to back up your counter claim.



We've been through that before on the difficulty in proving something doesn't exist. When it should be so simple for you to back up your claim if it were true, that fact that you refuse to do so speaks volumes.


----------



## tecate

Leo said:


> We've been through that before on the difficulty in proving something doesn't exist. When it should be so simple for you to back up your claim if it were true, that fact that you refuse to do so speaks volumes.


That's a misrepresentation of the situation, Leo.  There's as much onus on you to disprove as there is for me to prove.  It's a cop out to suggest otherwise.


----------



## Leo

tecate said:


> That's a misrepresentation of the situation, Leo.  There's as much onus on you to disprove as there is for me to prove.  It's a cop out to suggest otherwise.



How do I prove something doesn't exist? You made the claim, it would stand to reason that the onus is on you to prove it.


----------



## tecate

Leo said:


> How do I prove something doesn't exist? You made the claim, it would stand to reason that the onus is on you to prove it.


Is it a case as simple as something that does or doesn't exist Leo?  Quite honestly with this convoluted back and forth I don't even remember what your question was!  Can you restate it please.

Also bear in mind that we've gone through a whole host of things - point by point and your focus is on one specific item. That hardly shows a lack of willingness to engage on the topic or an inability to substantiate claims made.


----------



## Leo

tecate said:


> Is it a case as simple as something that does or doesn't exist Leo?



If it's so simple why can't you do it? How do you go about proving that something doesn't exist? Around 60% of the population of Iceland believe fairies exist, most of us believe that's nonsense, but there is no definitive proof that they don't exist. 



tecate said:


> we've gone through a whole host of things - point by point and your focus is on one specific item.



Yes, because whenever anyone tries to address more than a single point you keep expanding into more and more topics, ignoring the original question until people just give up and we end up going in circles on page 23.


----------



## Firefly

Leo said:


> Yes, because whenever anyone tries to address more than a single point you keep expanding into more and more topics, ignoring the original question until people just give up and we end up going in circles on page 23.


Rabbit hole???


----------



## Leo

Firefly said:


> Rabbit hole???



The full warren with no map.....multiple holes so you never know where you'll pop up!


----------



## tecate

Leo said:


> If it's so simple why can't you do it?


See my last post.  What is your question?  Please restate it.



Leo said:


> Yes, because whenever anyone tries to address more than a single point you keep expanding into more and more topics, ignoring the original question until people just give up and we end up going in circles on page 23.


Ah, so you can address more than a single point but I can't?  That makes complete sense Leo, doesn't it?  And as regards the going round in circles, there's two sides to that at best.  At worst, someone following a Trump strategy (i.e. keep posting the same untruth) deserves to get called out on it. And ignoring points - that's priceless Leo.  It's quite the opposite.  I'm still waiting for Brendan to respond to this - and to explain the calculation he uses to arrive at the fair price of gold.  You have not been immune from said practice yourself in the past.

You speak of 'going round in circles' and all that was necessary from you in that last post was to re-state your question.


----------



## tecate

Within the last ten days, there has been mention amongst commentators of the possibility of a dollar crash over the course of the next 18 months.  Prominent amongst them has been former Morgan Stanley Asia and Yale Economist, Stephen Roach.

Roach's Bloomberg Opinion piece:  "A Crash in the Dollar is Coming".

In the course of the article, Roach believes that a dollar crash is inevitable.  He estimates a devaluation in the region of 35%.  He also states that both gold and cryptocurrencies should benefit directly from that dollar weakness when it comes.


----------



## tecate

Reports out yesterday suggest that Paypal/Venmo are likely to add crypto to their respective platforms.  It remains the matter of speculation but there are some strong indicators - including job postings for a 'Technical Lead - Crypto Engineer' and a Blockchain Research Engineer.  What gives it further credence is the traction that rival CashApp has achieved by offering the ability to buy/sell Bitcoin.  That's not likely to have gone unnoticed by Paypal.

Paypal claim 305 million active users and 54 million active users via Venmo.


----------



## Firefly

tecate said:


> Reports out yesterday suggest that Paypal/Venmo are likely to add crypto to their respective platforms.  It remains the matter of speculation but there are some strong indicators - including job postings for a 'Technical Lead - Crypto Engineer' and a Blockchain Research Engineer.  What gives it further credence is the traction that rival CashApp has achieved by offering the ability to buy/sell Bitcoin.  That's not likely to have gone unnoticed by Paypal.
> 
> Paypal claim 305 million active users and 54 million active users via Venmo.


What about the Paypal fees?


----------



## Leo

Firefly said:


> What about the Paypal fees?



Paypal probably worried WhatsApp are rolling out free P2P money transfer globally.


----------



## tecate

Firefly said:


> What about the Paypal fees?


What about them?



			
				Leo said:
			
		

> Paypal probably worried WhatsApp are rolling out free P2P money transfer globally.


Now it seems that they're not.

Just so that it's not misunderstood - folks that see value in decentralised cryptocurrency are happy to see CBDCs and corporate money come into the arena (whether that be via Facebook or FBs WhatsApp, etc.).  It will ultimately lead to greater take-up in the use of decentralised digital currency.


----------



## tecate

Duke of Marmalade said:


> *Verifiable*.  What does that mean?


83 Tons of Fake Gold Bars: Gold Market Rocked by Massive China Counterfeiting Scandal.

Meanwhile, bitcoin doesn't have verification problems as it's easily authenticated.


----------



## tecate

Immediately following Black Thursday back in March, bitcoin was found to be highly correlated with the S&P500 for a time.  That correlation has [broken link removed] more recently. Yet bitcoin has the stronger inverse correlation with the USD.

Since Jan 1, gold is up 30% while bitcoin is up 55%. Bitcoin is proving to be a better hedge against an ever weakening USD.

The US has printed more $ in the month of June than it did in the first two centuries of its existence. Earlier this week Goldman Sachs expressed concern that the USD could lose its global reserve currency status.

Ari Wald of investment bank Oppenheimer recommended buying bitcoin and gold on Tuesday - with a nod towards bitcoin right now on the basis that its price hasn't extended as much as gold more recently.


----------



## Cricketer

tecate said:


> The US has printed more $ in the month of June than it did in the first two centuries of its existence.


That's astonishing. What's your source of that information?


----------



## tecate

Cricketer said:


> That's astonishing. What's your source of that information?


Two Centuries of Debt in One Month

(Moorehead's letter to investors in its entirety makes for an interesting read generally.  It touches on consideration of many of the objections to bitcoin that have arisen in discussions here.  It also delves into other aspects of the sector that have not been discussed here (the emergence of DeFi among them).)


----------



## Cricketer

Holy moly.


----------



## tecate

In a further boost to bitcoin's formative claim as digital gold, $1.2 billion business intelligence company MicroStrategy announced today that it had recently purchased $250 million worth of bitcoin - making it the company's primary treasury reserve asset.  CEO Michael Saylor stated:

_"We find the global acceptance, brand recognition, ecosystem vitality, network dominance, architectural resilience, technical utility, and community ethos of Bitcoin to be persuasive evidence of its superiority as an asset class for those seeking a long-term store of value. Bitcoin is digital gold – harder, stronger, faster, and smarter than any money that has preceded it. We expect its value to accrete with advances in technology, expanding adoption, and the network effect that has fueled the rise of so many category killers in the modern era.”_
"[Bitcoin]_ is a dependable store of value_" he added.

CFO Phong Le:
_"MicroStrategy believes that buying $250 million in Bitcoin will provide it the opportunity to earn better returns and preserve the value of our capital over time compared to holding cash."_


----------



## Gus1970

tecate said:


> In a further boost to bitcoin's formative claim as digital gold, $1.2 billion business intelligence company MicroStrategy announced today that it had recently purchased $250 million worth of bitcoin - making it the company's primary treasury reserve asset. CEO Michael Saylor stated:



May i suggest this to be a new thread? It would be useful to discuss how organisations are starting to use bitcoin and crypto in general


----------



## tecate

Gus1970 said:


> May i suggest this to be a new thread? It would be useful to discuss how organisations are starting to use bitcoin and crypto in general


It's a landmark move for sure. It's the first publicly listed company to make this allocation.  Furthermore, the size of the allocation relative to the overall size of the company is not lacking in conviction.  The expectation is that others will now follow.


----------



## Gus1970

tecate said:


> Furthermore, the size of the allocation relative to the overall size of the company is not lacking in conviction



I would not be surprised if the share price of the company started following the bitcoin price trajectory as the company is 20% made of bitcoin


----------



## tecate

Gus1970 said:


> I would not be surprised if the share price of the company started following the bitcoin price trajectory as the company is 20% made of bitcoin


Upon that news yesterday, its share price jumped around 15%. This could also be an indirect way for people to gain exposure to bitcoin - for those that don't want to handle the asset directly themselves.  Rather than buy into  at a premium they can buy into Nasdaq-listed MicroStrategy instead.
The company bought 0.1% of bitcoin supply. Going forward, it won't be as easy for the others that follow them to emulate in terms of percentage.

Potential Implications for International Settlement
There's another aspect to all of this also.  Lets say that other corporations follow suit.  One of the biggest issues that these guys encounter is friction in terms of international settlement - as the current system involves intermediaries and counterparties - and counterparty risk and delay.  These delays cost them a tonne of cash.  Maybe they wouldn't have to access that system at all and can go direct?  Bitcoin is deliberately basic from a programming point of view.  However, my understanding is that it can still do smart contracts. If there is a need for certain conditions to be met in executing a transaction between two corporates, then it may be possible to write that in to a smart contract - with the bitcoin transaction executing upon fulfillment of those conditions.
In this way, the archaic international settlement / banking system can be avoided completely. Trades can then be done incredibly quickly and far more cost effectively.

This may well get tackled using other crypto's.  Ethereum/Tezos/Cardano offer far better flexibility in terms of programmability for smart contracts. However, if corporates took to holding bitcoin as a hedge/store of value anyway, then it might make for greater motivation in making corporate-to-corporate international settlement via bitcoin directly possible instead.


----------



## tecate

On Friday, former head of Prudential Financial ($1.3 trillion AUM) - George Ball, said that bitcoin is a safe haven asset in the context of ongoing money printing. In an interview with Reuters, Ball stated that he had always seen himself as an opponent of bitcoin but has revised his view in the face of currency debasement through rampant money printing.


----------



## tecate

tecate said:


> In a further boost to bitcoin's formative claim as digital gold, $1.2 billion business intelligence company MicroStrategy announced today that it had recently purchased $250 million worth of bitcoin - making it the company's primary treasury reserve asset.  CEO Michael Saylor stated:


MicroStrategy has completed the purchase of a further $175 million worth of bitcoin, bringing its total bitcoin holding to 38,250 btc (approx. $425 million).

Only 483 individuals / individual entities could possibly obtain this number of btc given bitcoin's fixed cap supply. The MSTR stock price has risen 9% following the news. Podcast with MicroStrategy founder and CEO, Michael Saynor where he explains the company's decision to switch from cash reserves to bitcoin.


----------



## AnyAdvice

MicroStrategy (US public company) now has a dedicated Bitcoin page on their corporate website with excellent articles and interviews. Being a skeptic is healthy as an investor however successful investors are open to pivot their opinion 180 degrees based on new information that challenges their initial skepticism (pragmatic vs dogmatic). 



I'm glad there is still so much skepticism towards bitcoin. It's allowed me to build my holding since 2017. Finally, the number one information resource online for macro-economics, investing, and protecting your wealth is real vision. Take a look at their free content on youtube and I'd recommend paying for their subscription. You will not find these insights on CNN, CNBC, Bloomberg.....and certainly not on RTE, BBC. 

2021/2022 is going to be very interesting. Protect your wealth and ensure you're "anti-fragile"


----------



## Brendan Burgess

PatrickSmithUS said:


> I had a friend convinced that African countries were in talks with owns of some cypto to take over their ecomonies with huge investment.



Hi Patrick

That is very funny.

Is your friend a normally stable and sensible person?

I suspect that a stable virtual currency could have a greater application in Africa than in the developed world. And some comments to that effect may have morphed into "they are taking over the African economies."

Brendan


----------



## Brendan Burgess

PatrickSmithUS said:


> The equivalent of putting €5 each way on a 150/1 shot in the Grand National.



Can I give you a betting tip?  If you back a horse, make sure that you know its name.


----------



## tecate

PatrickSmithUS said:


> Are people still buying this rubbish?


By people, are you referring to the $1.2 billion public company (MicroStrategy) discussed in the posts above yours that has bought $425 million worth of bitcoin in 2020?


PatrickSmithUS said:


> I put €20 into something called Ethereum I think.


If you believe something is 'rubbish', it doesn't seem in any way credible to me that you put 1 cent into it.  Why would you do that?



PatrickSmithUS said:


> I had a friend convinced that African countries were in talks with owns of some cypto to take over their ecomonies with huge investment. He put about €20k into it and it's not worth €5k now.


It has often been said that crypto has far more potential in Africa than probably any other part of the world. The crypto subject has been discussed ad nauseum here and I don't remember anyone saying that crypto was going to 'take over' an African economy. Notwithstanding that, it's patently clear that many of them would be much better off had they already adopted it (given flagrant mismanagement of their own sovereign currencies).

Both the number of crypto transactions and the value of those transactions to and from Africa has doubled over the course of the past year. Prior to covid getting in the way, Twitter & Square CEO Jack Dorsey had planned to temporarily relocate to Africa with plans to capitalise on the potential he sees for bitcoin within the continent. Ray Youssef of peer to peer crypto exchange Paxful shares that thesis, on the basis that crypto is being used there for payments rather than investment. Paxful's African trading volume grew by 57% in 2019.



PatrickSmithUS said:


> A get rich quick merchant
> He'll probably end up thinking he's downloading something from the treasury office in Republic of Congo and end up have any savings he has stolen in a cyber attack.


Sounds like your 'friend' isn't a good point of reference for the consideration of cryptocurrency as a proposition.


----------



## WolfeTone

PatrickSmithUS said:


> He put about €20k into it and it's not worth €5k now.



The difference between a 'good' investor and a 'bad' investor is timing.
Seeing as no-one can actually time the market, then there are no 'good' or 'bad' investors only lucky investors and unlucky investors.
Your colleague is an unlucky investor, relative to those who invested €5k in crypto and are now standing on €20k


----------



## tecate

Following MicroStrategy's $425 million bitcoin purchase earlier this year, payments company Square has just followed up with a $50 million bitcoin investment. As per its press release:

_"Square believes that cryptocurrency is an instrument of economic empowerment and provides a way for the world to participate in a global monetary system, which aligns with the company’s purpose."_


----------



## tecate

$10 billion asset manager, Stone Ridge, has become the latest big mover into bitcoin. The NYSE-listed company confirmed that it's holding $115 million in bitcoin as a primary treasury reserve asset.


----------



## DublinHead54

I don't understand why a corporate treasurer would hold Bitcoin or be allowed to hold Bitcoin as a treasury reserve asset. The same logic applies as to why they don't hold Equities as a primary treasury/liquidity asset because of the volatility and risk associated.


----------



## tecate

Dublinbay12 said:


> I don't understand why a corporate treasurer would hold Bitcoin or be allowed to hold Bitcoin as a treasury reserve asset. The same logic applies as to why they don't hold Equities as a primary treasury/liquidity asset because of the volatility and risk associated.


Well, volatility continues to decrease year on year (admittedly a multi year process still). The argument could be made that in 2020, there's a much greater likelihood of major usd volatility than previously. There's also greater upside potential with bitcoin (asymmetric risk). Click on the podcast link in post #467 above to hear Michael Saylor's (MicroStrategy) rationale for buying into bitcoin.


----------



## DublinHead54

tecate said:


> Well, volatility continues to decrease year on year (admittedly a multi year process still). The argument could be made that in 2020, there's a much greater likelihood of major usd volatility than previously. There's also greater upside potential with bitcoin (asymmetric risk). Click on the podcast link in post #467 above to hear Michael Saylor's (MicroStrategy) rationale for buying into bitcoin.



Tecate, your points do not address the point.....A significant responsibility of a treasury function is to ensure liquidity of the company. Buying a volatile asset does not support the liquidity of a firm, and if your argument that USD is more volatile then it would not be a good liquid asset. However the volatility of USD is not of much concern because it is cash and the world reserve currency so the volatility of the USD against other currencies has little impact for a company that's liabilities are in USD. 

Put it this way if I owe you $100 in 6 months, whats riskier putting $100 cash in a bank account, or buying $100 in Bitcoin? 

This is not a debate on the validity of Bitcoin, but its use in the case presented, as such I am highly dubious they really are holding it as a primary treasury reserve and is rather an actual trade / bet on Bitcoin and they have had to structure it this way due to the trading mandate they have signed with clients.


----------



## tecate

Dublinbay12 said:


> A significant responsibility of a treasury function is to ensure liquidity of the company.


Liquidity in bitcoin itself has reached a significant level over the course of the past 24 months - akin to daily trading levels of German bonds. It can be easily disposed of in a 24/7 'always-on' market.



Dublinbay12 said:


> However the volatility of USD is not of much concern because it is cash and the world reserve currency so the volatility of the USD against other currencies has little impact for a company that's liabilities are in USD.


What is of concern is it's buying power. These companies are utilising bitcoin as a hedge against potential inflation at this time.



Dublinbay12 said:


> Put it this way if I owe you $100 in 6 months, whats riskier putting $100 cash in a bank account, or buying $100 in Bitcoin?


Will $100 today buy you the same goods/services in 6 months time?



Dublinbay12 said:


> I am highly dubious they really are holding it as a primary treasury reserve and is rather an actual trade / bet on Bitcoin and they have had to structure it this way due to the trading mandate they have signed with clients.


Have a look at  from August. Saylor is clearly saying that its capital allocation strategy is mindful of Bitcoin's dependability as a store of value and as a legitimate and attractive investment asset. You could say that those charged with administrating treasury reserves have a responsibility to take steps to protect against the erosion of those funds and Ray Dalio's notion that 'cash is trash'.


----------



## DublinHead54

tecate said:


> Liquidity in bitcoin itself has reached a significant level over the course of the past 24 months - akin to daily trading levels of German bonds. It can be easily disposed of in a 24/7 'always-on' market.
> 
> What is of concern is it's buying power. These companies are utilising bitcoin as a hedge against potential inflation at this time.
> 
> Will $100 today buy you the same goods/services in 6 months time?
> 
> 
> Have a look at  from August. Saylor is clearly saying that its capital allocation strategy is mindful of Bitcoin's dependability as a store of value and as a legitimate and attractive investment asset. You could say that those charged with administrating treasury reserves have a responsibility to take steps to protect against the erosion of those funds and Ray Dalio's notion that 'cash is trash'.



Tecate you are missing the point, I am not talking about the liquidity of Bitcoin, I am talking about the liquidity of the business. A treasury function helps maintain Liquidity and thus should be investing in assets with low volatility. 

The fact you didn't answer the straightforward question of the risk associated with $100, shows you are not willing to do anything other than back Bitcoin in every single situation. 

It is no different to if I start promoting Tesla stock as the saviour of every financial situation.


----------



## DublinHead54

tecate said:


> Will $100 today buy you the same goods/services in 6 months time?



I suggest if you can't answer this question, you don't understand financial markets.


----------



## EmmDee

The liquidity comment is, I think, one of volatility of the asset price rather than liquidity of the asset.

However, there is a difference between a bank or other entity dealing with client protection (where treasury assets are being held to ensure liquidity of the institution) and a commercial entity which has excess assets / capital which they need to decide how to deploy.

The press release sort of clarifies that. The company had $500mm which was obviously deemed surplus to immediate needs (they seem to be generating cash). The laid out a strtaegy of returning half of that to shareholders through a share buy-back and half to be invested in alternative investments or assets. So they decided to invest that $250mm in Bitcoin as opposed to anything else. I think that's interesting for the points mentioned by @tecate. I could imagine a corporate with exposure to many currencies allocating some reserves to Bitcoin as a counter weight.

But it's not quite the same as a Bank deciding to put some of it's liquidity capital in Bitcoin where volatility would be an issue


----------



## DazedInPontoon

This huge MicroStrategy  buy-in is wild. I actually think the podcast he did here https://www.youtube.com/watch?v=JibXLTDaj50&ab_channel=StephanLivera is better than the one tecate linked. It's more to the point and he's goes into more detail on some of the aspects.

DublinBay the time horizon on this is way longer than 6 months, he's seeing this as staying in bitcoin indefinitely. 500m is a huge warchest for this company and they don't expect to need the 425m that is in bitcoin anytime soon barring exceptional circumstances. He also says he accepts that it may fall 50% because it may rise 1000%.

One of the really interesting parts of the podcast starts about 26 minutes where he highlights that since it's a publicly traded company he had to get all the officers and directors on baord with the decision, it's fascinating to listen to him speak about this.

It's an hour long but I highly recommend the podcast episode, it's a great listen.


----------



## tecate

Dublinbay12 said:


> Tecate you are missing the point, I am not talking about the liquidity of Bitcoin, I am talking about the liquidity of the business. A treasury function helps maintain Liquidity and thus should be investing in assets with low volatility.


Given that none of these public companies have placed ALL reserves in bitcoin, then you're not talking about liquidity at all then - you're talking about the volatility of an asset...as EmmDee clarifies ->


			
				EmmDee said:
			
		

> The liquidity comment is, I think, one of volatility of the asset price rather than liquidity of the asset.





Dublinbay12 said:


> The fact you didn't answer the straightforward question of the risk associated with $100, shows you are not willing to do anything other than back Bitcoin in every single situation.


Not havin' that. I have cited/acknowledged a whole host of shortcomings of bitcoin over the course of discussions here - over the course of a couple of years. What makes no sense is that you're referring to volatility and I acknowledged the volatility of bitcoin.  You suggested that there was an investment aspect to these decisions to hold bitcoin reserves and I agreed with you. I'm not sure what more you want.

Notwithstanding that, I tried to encourage you to check out the rationale of Michael Saylor (and others) in their thinking here. Sure, bitcoin is volatile - but there are concerns surrounding the dollar. The two posters who followed you have done that and seem to have a better grasp of it on that basis.



Dublinbay12 said:


> I suggest if you can't answer this question, you don't understand financial markets.


I posed that question to you! You accuse me of backing bitcoin blindly yet it's you I'm trying to encourage to also identify the current risk with the USD (whereas you are just considering bitcoin volatility risk exclusively).



Dublinbay12 said:


> It is no different to if I start promoting Tesla stock as the saviour of every financial situation.


 Ok, then. Where have I stated that bitcoin is 'the saviour of every financial situation'?

I'd suggest following Dazed In Pontoon's podcast recommendation. Saylor sets out his rationale - and his fears of loss in holding USD right now.


----------



## tecate

DazedInPontoon said:


> DublinBay the time horizon on this is way longer than 6 months, he's seeing this as staying in bitcoin indefinitely. 500m is a huge warchest for this company and they don't expect to need the 425m that is in bitcoin anytime soon barring exceptional circumstances. He also says he accepts that it may fall 50% because it may rise 1000%.


And it's on this basis that those that view the digital asset positively can see themselves beyond the volatility issue - by taking a low time preference.


----------



## DublinHead54

@tecate if I owe you $100 in 6 months, what's riskier putting $100 cash in a bank account, or buying $100 in Bitcoin?


----------



## DublinHead54

tecate said:


> And it's on this basis that those that view the digital asset positively can see themselves beyond the volatility issue - by taking a low time preference.



I am a proponent of Bitcoin, but I am able to step back and critique it, much to often technological developments are seen as the be-all and end-all. I feel through your discussions on this thread you try to defend Bitcoin against every critique. This often leads to cherry picked examples on both your side and from contributors against. Two firms making investments is a drop in the ocean, I could easily say Bitcoin is not going to be widely adopted citing the example of Overstock that allow (not sure if they still do) users to buy in bitcoin, but only a tiny % of revenues are actually from Bitcoin. Or I could argue

Whilst Bitcoin has benefits and is an interesting development, there are social, political, cultural and economic aspects that impact the success of it.

Choosing a long term view on Bitcoin, is an investment decision, I would not purchase Bitcoin to manage my liquidity or liabilities over the short term. Why? Because it is a fact that it is a volatile asset, so I can be less certain on the future price vs I can on the dollar or for example Oil, a very large market that trades on futures.

The volatility you refer to in terms of the USD is against other currencies if I hold USD and my liabilities are in USD then the volatility is irrelevant. If I hold USD and my liabilities are in EUR, I can hedge that via the very large liquid market. The hedging market in Bitcoin is not huge and I have observed large bid/offer spreads, I don't have exact figures but it is fair to assume the FX derivative market of hedging BTC against fair currencies is tiny compared to that of G7 currencies.

In this case, specifically, I was responding to your article you posted most recently on the premise of BTC being used as a treasury asset, My opinion is a firm buying BTC is making a trade with a long term view and not using it as a short term, which EmmDee clarified this firm is doing. This to me is no different than the same firm saying they are going to invest 250m in Tesla Stock.

To add, my interpretation was you were suggesting Bitcoin be used as a treasury asset, whereas the press release clarifies it is an investment. My argument is that BTC is not a short term investment, I don't have any argument against Investment managers trying to find some yield and investing in BTC as part of their strategy. I don't think this goes anyway to help adoption of BTC as a currency, but does help legitimize it as an investment.


----------



## tecate

Dublinbay12 said:


> @tecate if I owe you $100 in 6 months, what's riskier putting $100 cash in a bank account, or buying $100 in Bitcoin?


Why respond to a question with a question?  Go back and answer the question that was posed to you and thereafter, I can respond (although I would contend it's ground I've covered already).



Dublinbay12 said:


> I am a proponent of Bitcoin, but I am able to step back and critique it, much to often technological developments are seen as the be-all and end-all. I feel through your discussions on this thread you try to defend Bitcoin against every critique.


Give yerself a pat on the back. Precisely as I told you, over the course of three years of discussion on here, I have cited/acknowledged many facets of bitcoin in its current state which are problematic. You didn't dispute this - because the posts are there. Everyone carries an inherent bias - but if you're telling me that I'm not being objective, you'll have to prove it.  Your recent posts do no such thing.



Dublinbay12 said:


> This often leads to cherry picked examples on both your side and from contributors against.


The discussion has very much gotten entrenched. In my view that's largely due to the ridicule that was on display ref. bitcoin. However, whilst it has a long way to go, bitcoin/crypto has only gotten stronger since then.



Dublinbay12 said:


> Two firms making investments is a drop in the ocean,


Acknowledged that it's just a drop in the ocean. If the inference is that I've suggested otherwise, then prove it. That said, if you think it's not worthy of consideration, I disagree.  These are the first public companies to take this approach - and so, it covers new ground.  Will others follow them?  Maybe they will or maybe they won't. However, they're more likely to spend a bit more time considering it - seeing as others have been bold enough to go that direction.



Dublinbay12 said:


> I could easily say Bitcoin is not going to be widely adopted citing the example of Overstock that allow (not sure if they still do) users to buy in bitcoin, but only a tiny % of revenues are actually from Bitcoin. Or I could argue


As I alluded to in my last post, you seem to be looking for an argument or a reason to disagree when there is none. Firstly, there's no connection between these examples and your overstock example. The latter has to do with a day to day transactional use case. Over the course of my time here, I've consistently agreed that bitcoin is hamstrung in that regard (at least until layer 2 solutions are developed further and gather more momentum). In which case, what's the argument about?  You seem to be trying to contrive one.
The current discussion (ref. MicroStrategy/Square/Stone Ridge) is valid as they're the first movers in this context. You're criticising me for suggesting that this type of use case is widespread or will be widespread when I've said no such thing. So much for 'stepping back'.



Dublinbay12 said:


> Whilst Bitcoin has benefits and is an interesting development, there are social, political, cultural and economic aspects that impact the success of it.


Territory I've gotten to long before you. I'm on record with examples that feed into those very aspects - and how they could hold back the further development of bitcoin. Yet you say I'm the one that's not objective.



Dublinbay12 said:


> Choosing a long term view on Bitcoin, is an investment decision,


Over a couple of posts already, I agreed that there was an investment aspect to these decisions - but you seem to be hell bent on finding a point of disagreement.



Dublinbay12 said:


> I would not purchase Bitcoin to manage my liquidity or liabilities over the short term. Why? Because it is a fact that it is a volatile asset, so I can be less certain on the future price vs I can on the dollar or for example Oil, a very large market that trades on futures.


Again, I've never disputed the inherent volatility of bitcoin (save to remind people that it will dissipate over the longer term and there's already evidence of that). As regards your opinion here - it's exactly that. I invited you over a couple of posts to listen to Saylor and the rationale he presents on that. Another poster did so also. It seems that you haven't. Could it be that it's you that's guilty of what you accuse me of - and you're not 'stepping back' far enough?
Aside from all that, you seem to make this case disregarding the risk asymmetry at play here. Furthermore, it's interesting that you refer to volatility and oil in the same breath given its history in 2020.



Dublinbay12 said:


> The volatility you refer to in terms of the USD is against other currencies if I hold USD and my liabilities are in USD then the volatility is irrelevant. If I hold USD and my liabilities are in EUR, I can hedge that via the very large liquid market. The hedging market in Bitcoin is not huge and I have observed large bid/offer spreads, I don't have exact figures but it is fair to assume the FX derivative market of hedging BTC against fair currencies is tiny compared to that of G7 currencies.


Saylor talks about precisely this - and if you genuinely have an interest, then go and listen to him and critique him on that basis. He doesn't arrive at the same conclusion as you do in terms of avoiding usd risk.
On bitcoin futures, that market has developed in leaps and bounds over the course of the past 12 months. Can you point to these wayward spreads?



Dublinbay12 said:


> In this case, specifically, I was responding to your article you posted most recently on the premise of BTC being used as a treasury asset, My opinion is a firm buying BTC is making a trade with a long term view and not using it as a short term, which EmmDee clarified this firm is doing. This to me is no different than the same firm saying they are going to invest 250m in Tesla Stock.


 Once again, listen to Saylor's rationale. It's not as simple as you present it.



Dublinbay12 said:


> To add, my interpretation was you were suggesting Bitcoin be used as a treasury asset, whereas the press release clarifies it is an investment. My argument is that BTC is not a short term investment, I don't have any argument against Investment managers trying to find some yield and investing in BTC as part of their strategy.


This in the same breath as you go on about cherry picking?  This is the title of MicroStrategy's press release ->

_'MicroStrategy Adopts Bitcoin as _*Primary Treasury Reserve Asset'*

Those are not my words - those are MicroStrategy's. If you take issue with this, it's all the more reason you should go and listen to Saylor's rationale for this decision.
Now you're the one trying to oversimplify to meet your own narrative here. There are several factors at play here - hedging usd risk, use of bitcoin proportionately as a treasury asset where it's not the only treasury asset held and where there's room for a company to do so/size that asset holding responsibly, etc. The last point is that they're factoring in assymetric risk - which is the upside/investment aspect you refer to.



Dublinbay12 said:


> I don't think this goes anyway to help adoption of BTC as a currency, but does help legitimize it as an investment.


We were not and we are not discussing the adoption of bitcoin as a currency over the course of this entire thread  - let alone since discussion of MicroStrategy/Square/Stone Ridge's use of bitcoin in some way as a treasury reserve asset. Why would you bring it up in this context?


----------



## DublinHead54

tecate said:


> Why respond to a question with a question?  Go back and answer the question that was posed to you and thereafter, I can respond (although I would contend it's ground I've covered already).



Tecate, this is the question I asked in which you responded with a question......why do you refuse to answer it? 

I'll answer yours, for simplicity I'll assume that I held the $100 in a 0% interest account, so the purchasing power of that $100 will have reduced by the inflation rate.


----------



## DublinHead54

tecate said:


> Well, volatility continues to decrease year on year (admittedly a multi year process still). The argument could be made that in 2020, there's a much greater likelihood of major usd volatility than previously. There's also greater upside potential with bitcoin (asymmetric risk). Click on the podcast link in post #467 above to hear Michael Saylor's (MicroStrategy) rationale for buying into bitcoin.



Tecate, I have not read the full 25 pages of this thread in detail, as in my opinion there is little benefit to be gained, as I am fully versed in Blockchain (pros and cons), and for the most part I side with your optimism. However, what I infer is the updates posting is an almost 'I told you so' to those that critiqued Bitcoin on this forum.

The comment above is one that I find a problem with, you are presenting a case of Bitcoin being less volatile than the USD (potentially). I just can't see objectively how you arrive at that and it is flawed on so many levels. 

I also don't see why I can't reference BTC as a currency, because that is still the intended use, of which investments like this are having the opposite effect.


----------



## tecate

Dublinbay12 said:


> Tecate, this is the question I asked in which you responded with a question......why do you refuse to answer it?


 Firstly there's no tactical move not to address anything including your question so don't suggest that there is.
The answer is that the usd is an established sovereign currency whilst bitcoin continues to carve out its place in the world. Bitcoin remains the more volatile. Notwithstanding that, we're in exceptional times with a level of money printing never seen before.  Now I know at this point you've listened to Saylor and you know what level of debasement he was talking in terms of, right??
On that volatility, time preference has been pointed out to you by me and another poster. Zoom out and you see that bitcoin has been the best performing asset of the past decade.  As it goes through ita first crisis test, its the best performing asset of 2020 also.
Alongside the volatility that you're focusing on, these guys are calculating in the assemetry of that risk - you're not it seems.

That's your answer.


Dublinbay12 said:


> I'll answer yours, for simplicity I'll assume that I held the $100 in a 0% interest account, so the purchasing power of that $100 will have reduced by the inflation rate.


So that could be 2% or it could be something else.  That's why these guys hedge.


----------



## tecate

Dublinbay12 said:


> Tecate, I have not read the full 25 pages of this thread in detail, as in my opinion there is little benefit to be gained, as I am fully versed in Blockchain (pros and cons), and for the most part I side with your optimism.


You're free to do whatever you like up until you accuse someone else of being disingenuous in their contributions to a thread you have not even read. As was pointed out to you, I've acknowledged a series of shortcomings  related to bitcoin.



Dublinbay12 said:


> However, what I infer is the updates posting is an almost 'I told you so' to those that critiqued Bitcoin on this forum.


Are you in the mind reading business now? Prove it.
I posted those most recent items because they're significant in my view. Everyone can form their own opinion in that regard.



Dublinbay12 said:


> The comment above is one that I find a problem with, you are presenting a case of Bitcoin being less volatile than the USD (potentially). I just can't see objectively how you arrive at that and it is flawed on so many levels.


Posting on mobile  so its not convenient for me to check back but I don't think i made a whole lot of commentary when posting up info on moves by those three public companies recently.
You're entitled to an opinion the same as the next guy. If you can't see the logic these guys used to justify those bitcoin positions, maybe you should examine the rationale they based said decisions on.


Dublinbay12 said:


> I also don't see why I can't reference BTC as a currency, because that is still the intended use, of which investments like this are having the opposite effect.


Because its completely out of context. This thread as a whole doesn't consider that use case.


----------



## DublinHead54

tecate said:


> Firstly there's no tactical move not to address anything including your question so don't suggest that there is.
> The answer is that the usd is an established sovereign currency whilst bitcoin continues to carve out its place in the world. Bitcoin remains the more volatile. Notwithstanding that, we're in exceptional times with a level of money printing never seen before.  Now I know at this point you've listened to Saylor and you know what level of debasement he was talking in terms of, right??
> On that volatility, time preference has been pointed out to you by me and another poster. Zoom out and you see that bitcoin has been the best performing asset of the past decade.  As it goes through ita first crisis test, its the best performing asset of 2020 also.
> Alongside the volatility that you're focusing on, these guys are calculating in the assemetry of that risk - you're not it seems.
> 
> That's your answer.
> So that could be 2% or it could be something else.  That's why these guys hedge.



I don't want to debate the point, but you didn't answer the question, it really should be a one-word answer (Cash or BTC). The simple fact is BTC is the riskier trade over a 6 month period than holding cash at this point in time. A debate on the time preference of BTC is irrelevant in the context of the question I asked, because I defined the time as 6 months. I asked this question because I was questioning the validity of BTC to manage cash / liquidity position in the firm, it has been clarified that the firm is making a long term investment with excess reserve in BTC.

The question does not even need to use BTC, replace BTC with $100 Tesla stock, what would be your answer?

We aren't really in exceptional times, there is a tendency to believe that our present is changing at unprecedented times and we are facing all these new problems that never existed before. This rhetoric is often to use to support why we need technology and we must adopt all these new technologies. A quick scan of history will tell you otherwise.

That is why this thread is pretty pointless, a simple question is not given a straight answer. The rhetoric is "Bitcoin is the future and if you don't believe in the technology you are a naysayer'. You have admitted there are flaws which is progress, but taking a step back, I may have missed the point of why you posted the article a few days? I inferred it as you to show the naysayers that it is starting to be adopted in firms? I was simply trying to make sure people don't blindly adopt BTC, just because there is a technology solution it doesn't mean we need to change, we don't always need to be 'solutionizing' our perceived problems.

It is healthy to debate, and I am sure over the 25 pages opinions are unchanged so there is nothing more to add. I'll leave with a quote most appropriate

"If you think technology can solve our problems, you don't understand technology and you don't understand our problems" Mazzucato


----------



## Leo

Dublinbay12 said:


> but you didn't answer the question



I'm afraid you'll have to get used to that


----------



## tecate

Dublinbay12 said:


> I don't want to debate the point, but you didn't answer the question, it really should be a one-word answer (Cash or BTC).


That's my answer and my humble opinion.  Perhaps you'd prefer to write the answer for me.



Dublinbay12 said:


> A debate on the time preference of BTC is irrelevant in the context of the question I asked, because I defined the time as 6 months.


When enforcing narrow parameters like that, sure.  However, outside of those narrow parameters, it's beneficial to have an appreciation of time preference when considering the volatility of bitcoin.



Dublinbay12 said:


> I asked this question because I was questioning the validity of BTC to manage cash / liquidity position in the firm,


Have any of these public companies moved to 100% btc reserves? Has anyone here suggested that they should? 



Dublinbay12 said:


> it has been clarified that the firm is making a long term investment with excess reserve in BTC.


See above, has anyone here suggested any such company should move to 100% btc reserves?



Dublinbay12 said:


> We aren't really in exceptional times, there is a tendency to believe that our present is changing at unprecedented times and we are facing all these new problems that never existed before. This rhetoric is often to use to support why we need technology and we must adopt all these new technologies. A quick scan of history will tell you otherwise.


Rhetoric indeed.In terms of money printing we are - and that is what I was referring to.



Dublinbay12 said:


> That is why this thread is pretty pointless, a simple question is not given a straight answer.


Why participate then? Reading what you've just written is a waste of time. Your question was answered - you just don't like the answer.



Dublinbay12 said:


> The rhetoric is "Bitcoin is the future and if you don't believe in the technology you are a naysayer'.


If you're attributing that to me, then mind-reading school didn't go so well for you. It does seem to assist your narrative though to try and claim that.



Dublinbay12 said:


> You have admitted there are flaws which is progress, but taking a step back


 I've freely cited such shortcomings long since. In that context there has been no change of views despite what you're trying to suggest.



Dublinbay12 said:


> I may have missed the point of why you posted the article a few days? I inferred it as you to show the naysayers that it is starting to be adopted in firms?


I wasn't and didn't make any specific reference to naysayers in recent postings about MicroStrategy, Square and Stone Ridge using btc as a reserve asset. Your wayward mind-reading isn't helpful here.



Dublinbay12 said:


> I was simply trying to make sure people don't blindly adopt BTC,


In the context of this particular use (major public companies using btc as a reserve asset), you give this thread far too much credit if that was your concern.



Dublinbay12 said:


> just because there is a technology solution it doesn't mean we need to change, we don't always need to be 'solutionizing' our perceived problems.


Just in case you think that's a point you're arguing with me on, it's not.


----------



## tecate

Leo said:


> I'm afraid you'll have to get used to that


Another one that doesn't like the answers provided.


----------



## Leo

tecate said:


> Another one that doesn't like the answers provided.



I know, I've given up all hope they'll ever answer the question asked.


----------



## WolfeTone

Dublinbay12 said:


> @tecate if I owe you $100 in 6 months, what's riskier putting $100 cash in a bank account, or buying $100 in Bitcoin?



The opposite is the same. If I owe you 1BTC in 6months, whats riskier, holding 1BTC in a wallet or buying $$ with your Bitcoin?

Volatility works both ways. Clearly BTC is a volatile asset measured against fluctuating US$. Alternatively, it is the US$ that is a volatile asset against sound money like BTC. 
Bitcoin has, durability, portability, scarcity, divisibility, fungibility, and is decentralised and trustless currency.
The US$ is just a mish-mash of central bank keyboard strokes and manipulated government IOU's.


----------



## MaxGordon

WolfeTone,

Apart from cryptos, what else can you trust that is trustless?


----------



## tecate

Leo said:


> I know, I've given up all hope they'll ever answer the question asked.


Its rough for you Leo when the answers provided don't match your world view


----------



## DublinHead54

WolfeTone said:


> The opposite is the same. If I owe you 1BTC in 6months, whats riskier, holding 1BTC in a wallet or buying $$ with your Bitcoin?
> 
> Volatility works both ways. Clearly BTC is a volatile asset measured against fluctuating US$. Alternatively, it is the US$ that is a volatile asset against sound money like BTC.
> Bitcoin has, durability, portability, scarcity, divisibility, fungibility, and is decentralised and trustless currency.
> The US$ is just a mish-mash of central bank keyboard strokes and manipulated government IOU's.



From my perspective there is no risk, I get 1 BTC regardless. You take the risk on whether to buy 1 BTC now or wait for  6 months and deliver me 1 BTC at the future price. From your perspective buying dollars is riskier because you have agreed to deliver 1BTC.

Why is decentralized good? Why is a trustless currency good? Are we suddenly all going to lose faith in the United States or the European Union? History would suggest not.  I've critiqued all these points (I work in the industry), and I don't see an overwhelming reason for BTC to replace Central Bank issued Currencies.

What I find amusing, is decentralized is touted as a benefit, but it is not decentralized, China controls the vast majority of the mining pool. 

It is a great story though.


----------



## WolfeTone

Dublinbay12 said:


> From my perspective there is no risk



It's the same risk. If you give me 1BTC to return to you in 6 months and I buy $10,000 with it today, I'm taking a risk that it wont cost me $20,000 to buy the 1BTC that I need to return to you. 
It's the exact same risk just reversed.


----------



## tecate

Dublinbay12 said:


> Are we suddenly all going to lose faith in the United States or the European Union?


Is the suggestion that someone has claimed that in this discussion? If so, can you provide a link to it?



Dublinbay12 said:


> History would suggest not.


History also teaches us that time and time again, sovereign currencies have been (and continue to be in specific cases) mismanaged. That mismanagement has usually been to the detriment of ordinary citizens. That's indisputable.



Dublinbay12 said:


> I don't see an overwhelming reason for BTC to replace Central Bank issued Currencies


Has someone here called for 'replacement'?  Competition is healthy - and that's why the advent of decentralised crypto and corporate digital currency alongside sovereign currency can only be a good thing.



Dublinbay12 said:


> What I find amusing, is decentralized is touted as a benefit, but it is not decentralized, China controls the vast majority of the mining pool.


It's not decentralised to the 9th degree, no. However, to suggest that bitcoin's current level of decentralisation isn't beneficial is foolish. Could bitcoin mining be better distributed? - sure, it could. In the meantime, those mining pools are going to have to ruin themselves to temporarily disrupt the network. That's the only danger that you can be talking about here - because at an individual level, nobody can access that individuals bitcoin and the scenario you're suggesting isn't going to play out to the detriment of a minority of individuals. i.e. it's sufficiently decentralised such that no government, bank or other entity can interfere with an individuals ability to store or move bitcoin on the network. There's some more fuel for your 'great story'.


----------



## Leo

tecate said:


> Its rough for you Leo when the answers provided don't match your world view



No, I've been proven wrong here many times over the years, and my world view now is a lot different to what it was when I first started posting. I like to learn.


----------



## tecate

Leo said:


> No, I've been proven wrong here many times over the years, and my world view now is a lot different to what it was when I first started posting. I like to learn.


A view I share.


----------



## DublinHead54

WolfeTone said:


> i.e. it's sufficiently decentralised such that no government, bank or other entity can interfere with an individuals ability to store or move bitcoin on the network. There's some more fuel for your 'great story'.



I assume you agree that for the vast majority of individuals in 2020 to get Bitcoin you have to convert Fiat to BTC? You transact between the fiat monetary system and the BTC ecosystem via an exchange. A government could shut those connections making it a closed network.


----------



## WolfeTone

Dublinbay12 said:


> I assume you agree that for the vast majority of individuals in 2020 to get Bitcoin you have to convert Fiat to BTC? You transact between the fiat monetary system and the BTC ecosystem via an exchange. A government could shut those connections making it a closed network.



I think this comment should be directed to @tecate ?


----------



## DublinHead54

tecate said:


> Is the suggestion that someone has claimed that in this discussion? If so, can you provide a link to it?



I was responded to @WolfeTone, I suggest you read the question I asked and don't take sentences out of context before replying or let him respond. 

_Why is decentralized good? Why is a trustless currency good? Are we suddenly all going to lose faith in the United States or the European Union? History would suggest not.  _


----------



## DublinHead54

tecate said:


> Is the suggestion that someone has claimed that in this discussion? If so, can you provide a link to it?
> 
> 
> History also teaches us that time and time again, sovereign currencies have been (and continue to be in specific cases) mismanaged. That mismanagement has usually been to the detriment of ordinary citizens. That's indisputable.
> 
> Has someone here called for 'replacement'?  Competition is healthy - and that's why the advent of decentralised crypto and corporate digital currency alongside sovereign currency can only be a good thing.
> 
> It's not decentralised to the 9th degree, no. However, to suggest that bitcoin's current level of decentralisation isn't beneficial is foolish. Could bitcoin mining be better distributed? - sure, it could. In the meantime, those mining pools are going to have to ruin themselves to temporarily disrupt the network. That's the only danger that you can be talking about here - because at an individual level, nobody can access that individuals bitcoin and the scenario you're suggesting isn't going to play out to the detriment of a minority of individuals. i.e. it's sufficiently decentralised such that no government, bank or other entity can interfere with an individuals ability to store or move bitcoin on the network. There's some more fuel for your 'great story'.



I assume you agree that for the vast majority of individuals in 2020 to get Bitcoin you have to convert Fiat to BTC? You transact between the fiat monetary system and the BTC ecosystem via an exchange. A government could shut those connections making it a closed network.


----------



## DublinHead54

Leo said:


> No, I've been proven wrong here many times over the years, and my world view now is a lot different to what it was when I first started posting. I like to learn.



Alas, technological determinism is here to stay on this thread it would appear. 

I bid all goodbye


----------



## WolfeTone

Dublinbay12 said:


> I was responded to @WolfeTone, I suggest you read the question I asked and don't take sentences out of context before replying or let him respond.
> 
> _Why is decentralized good? Why is a trustless currency good? Are we suddenly all going to lose faith in the United States or the European Union? History would suggest not._



I take these questions were directed to me.

Decentralized is good because it limits power and undue excessive influence.
Trustless is good, it speaks for itself I would have thought.
I don't think we are suddenly all going to lose faith the United States or European Union.


----------



## tecate

Dublinbay12 said:


> I was responded to @WolfeTone, I suggest you read the question I asked and don't take sentences out of context before replying or let him respond.


Respectfully, I'll respond if that's what I want to do Dublinbay12. It doesn't in any way prevent WolfeTone from responding also. As regards taking sentences out of context, I don't see a lack of context in my responses.


Dublinbay12 said:


> I assume you agree that for the vast majority of individuals in 2020 to get Bitcoin you have to convert Fiat to BTC? You transact between the fiat monetary system and the BTC ecosystem via an exchange. A government could shut those connections making it a closed network.


Well apparently it's beneath you but had you bothered to read the thread in which you accused me of '_not [being] willing to do anything other than back Bitcoin in every single situation'_, you would have seen that I've cited this as a risk which could retard the rate of development of bitcoin. Note that I don't believe that it will kill it. It will just take longer to progress.
Over the course of the next few years, I expect ongoing regulatory battles. However, to my mind, ease of use/user experience is the key determinant. If that's improved, then it won't matter a whole lot what governments do.


----------



## Leo

Dublinbay12 said:


> Alas, technological determinism is here to stay on this thread it would appear.



Resistance is futile


----------



## Duke of Marmalade

WolfeTone said:


> The opposite is the same. If I owe you 1BTC in 6months, whats riskier, holding 1BTC in a wallet or buying $$ with your Bitcoin?
> 
> Volatility works both ways. Clearly BTC is a volatile asset measured against fluctuating US$. Alternatively, it is the US$ that is a volatile asset against sound money like BTC.
> Bitcoin has, durability, portability, scarcity, divisibility, fungibility, and is decentralised and trustless currency.
> The US$ is just a mish-mash of central bank keyboard strokes and manipulated government IOU's.


Nice try _Wolfie _   When we talk of volatility we need to have what the economists call the numéraire - the basic standard which we use for evaluation.  Obviously the numéraire itself has zero volatility by this metric.  Thus if BTC is the numéraire then BTC has zero volatility and USD has mega volatility.  Similar observations if we chose Tesla stock as numéraire.
When it comes to reserve assets the correct numéraire is the operational currency of the entity as @Dublinbay12 has stated.
When it comes to currencies _qua medium of exchange _the correct numéraire is a basket of goods and services (which will vary according to the observer).  It is the role of Central Banks to manage stability against a numéraire which is the general price of goods and services in the economy, and thank goodness we have Central Banks tasked with that mission.  Measured against the price of goods and services,  1 BTC today might buy a Tesla car in 12 months time or it might be hard pushed to buy a latte.
I will give Saylor a go, though I have my mine sweeper out to avoid rabbit holes.


----------



## WolfeTone

Duke of Marmalade said:


> When we talk of volatility we need to have what the economists call the numéraire -



Yes of course, no dispute here. And on a scale which the global economy operates clearly we use the central bank issued currency as the basis which we measure all value. This is a universal approach which offers a very convenient means of communication. So in common universally accepted parlance, BTC will obviously be recognised as where the volatility lies. 

But in practice when talking about direct transactions between parties, as offered by @Dublinbay12 the risk, and as such the volatility operate in exact inverse measure to each other. 

So if I were to lend you with 1BTC with your promise to return it to me in six months or 12, as you identify yourself, 



Duke of Marmalade said:


> 1 BTC today might buy a Tesla car in 12 months time or it might be hard pushed to buy a latte.



Ditto if I were to trade €10000 in future stocks the risk is the same on both sides of the equation, albeit in common parlance the volatility will be identified with the stock.


----------



## tecate

Duke of Marmalade said:


> 1 BTC today might buy a Tesla car in 12 months time or it might be hard pushed to buy a latte.


Here's a little snippet from a  published by Fidelity Investments last week:

_"Another consequence of bitcoin entering a more mature and steady stage of its life cycle is that we expect its volatility to decline in tandem, resulting in continued favorable risk-adjusted returns."_


----------



## Duke of Marmalade

WolfeTone said:


> Ditto if I were to trade €10000 in future stocks the risk is the same on both sides of the equation, albeit in common parlance the volatility will be identified with the stock.


The point I am trying to make is that I would measure volatility/risk in terms of my purchasing power in respect to the goods and services I consume.  BTC and stocks would be risky from that perspective.
I listened to the whole hour of Saylor.  Except for a long winded piece on Ethereum it was very  interesting.  That guy is taking a big risk. Here are some of the notable takeaways.
His expectations are founded in Volcker syndrome, 0% inflation, 5% p.a. on 10 year bonds, 8% p.a. on long bonds and 12% p.a. on equities.
I agree with him that he will get nowhere near that on the traditional asset classes, and I agree that they are way overpriced.  But why does he think he will get that from bitcoin?  (1) it has achieved 25% p.a. over the last decade, (2) it has moved sideways in the last 2 years compared to other luxury assets which have grown 35% this year.  Bitcoin is 1,000 times better than gold, whatever that means.
He expects bitcoin to grow at least 10% p.a. which he says is the rate of growth in the money supply.  He doesn't really explain the connection.
He was a critic of bitcoin in 2013 but has had a Damascean conversion. So much so that he just can't understand why anybody would sell bitcoin to him.
There was no attempt here to explain why bitcoin has value.  It seemed to me that since nothing else would satisfy his Volcker fantasy, this was the last resort.
He seems to accept that fiat will maintain its value (or maybe lose 2% p.a.) in terms of CPI.  Good enough for me but obviously not good enough for someone seeking/expecting 10%/20% p.a.
Didn't convince me.


----------



## tecate

Duke of Marmalade said:


> it has moved sideways in the last 2 years compared to other luxury assets which have grown 35% this year.


Bitcoin is up 60% year to date vs. gold's 25%.



Duke of Marmalade said:


> Bitcoin is 1,000 times better than gold, whatever that means.


It's digital - meaning ease of transfer globally in minutes. It can be self custodied. It's easier to store - you don't have to insert it up your rectum like this poor Indian did with gold during the week. The transparency with regard to supply is clearer. It's divisible whereas gold isn't.



Duke of Marmalade said:


> He seems to accept that fiat will maintain its value (or maybe lose 2% p.a.) in terms of CPI. Good enough for me but obviously not good enough for someone seeking/expecting 10%/20% p.a.


He spoke of 10-20% debasement of the dollar.


----------



## DK123

"Irish seniors Can Get Extra Funding By Doing this"!.[On Yahoo News][Equity Realease] Does anyone know if this is false and if so why is it used and allowed to manipulate people especially senior citizens.Thanks.I was just wondering!Ref=The Journal.i
e


----------



## MaxGordon

Tecate,

Long before I actually registered for this site, I used always read your posts. I would just like to thank you for all your contributions to this thread and to say how impressed I have been with your knowledge and patience. At the outset, I was a big time sceptic of Bitcoin but for the last while have been getting it more and more. I know your purpose is probably not to convert people but nonetheless I just thought that I'd let you know.


----------



## WolfeTone

Duke of Marmalade said:


> The point I am trying to make is that I would measure volatility/risk in terms of my purchasing power in respect to the goods and services I consume.



Yes, I have no disagreement with you there. 

My response to @Dublinbay12 was specific to his example of borrowing/lending in one asset and converting to another asset. 
Either way you look at it, the risk/volatility is inversely shared. Whether it's BTC/Cash, Cash/BTC, Gold/Cash, Cash/Gold, €/$ or $/€. 
I don't think it needs explaining any further.


----------



## Duke of Marmalade

tecate said:


> He spoke of 10-20% debasement of the dollar.


Yes he did.  Versus what he perceives as luxury assets including bitcoin. I see no convincing argument that bitcoin is such a luxury asset.  It is a digital entry on a decentralised, censor resistant, ledger signifying nothing.


----------



## tecate

Faced with the terror that our Indian friend was faced with last week, Dukey, would you be inclined to follow his lead and stuff this kilo of the shiny stuff in a place less than shiny? =>




Faced with that prospect, would you still not consider bitcoin? I mean, I have not tried it but I'm guessing given the choice I'd prefer to remember 12 keywords than to destroy myself but if there's one thing this thread has taught me, we don't all think the same way :-D

@MaxGordon - Speaking of weighing things up, glad to hear the thread has been helpful.


----------



## MaxGordon

I just think it's new and it takes time for people to get their head around it. Main thing is to have an open mind. Some posters seem more concerned with winning an argument or engaging in a peacock-like display of their intellectual plumage than trying to understanding what's happening.


----------



## DublinHead54

MaxGordon said:


> I just think it's new and it takes time for people to get their head around it. Main thing is to have an open mind. Some posters seem more concerned with winning an argument or engaging in a peacock-like display of their intellectual plumage than trying to understanding what's happening.



@MaxGordon Don't be fooled by technological determinism in the 'digital age'. Just because Bitcoin is digital it does not mean that it cant be subjected to critique. Too often people are ostracised for commentating negatively on technology and change (see Lepore)

The premise of the Bitcoin whitepaper has failed in its short history. I have at various times held BTC since 2010 and never once have I purchased any good with it. In fact it seems to be doing the opposite, western capitalism is legitimising BTC for their own gain, see recent articles posted by tecate. 

What BTC has introduced is the novel technology now called 'Blockchain'. This perhaps has the most benefits and hence Central bank digital currencies are being studied.

I don't believe in technological determinism, the success of technology is not purely a result of the technology. There are many social, political, economic and cultural reasons that are more important and require consideration. In my humble opinion BTC has succumbed to capitalism.

But as most of the argument here uses 'future' observation as evidence and I don't have a crystal ball there's not much else to say.


----------



## tecate

Dublinbay12 said:


> @MaxGordon Don't be fooled by technological determinism in the 'digital age'.


 You seem to have a bee in your bonnet about 'technological determinism'. Let me introduce you to 'the inevitability thesis'.



Dublinbay12 said:


> Just because Bitcoin is digital it does not mean that it cant be subjected to critique.


Bitcoin and decentralised crypto has been subjected to all manner of critique and attacks (literal and otherwise) over the course of its short life.



Dublinbay12 said:


> The premise of the Bitcoin whitepaper has failed in its short history.


Time and time again, we see the same mistake. You want to judge a technology that hasn't settled yet. UX/UI are being worked on, layer 2 solutions are being worked on. Ignore all of that if you wish. Nobody has suggested that bitcoin is in an ideal situation today as a transactional currency. However, at least be open to the possibility that there may be further development in that respect.



Dublinbay12 said:


> I have at various times held BTC since 2010 and never once have I purchased any good with it.


Whilst I acknowledge its shortcomings, I have and I do.



Dublinbay12 said:


> In fact it seems to be doing the opposite, western capitalism is legitimising BTC for their own gain, see recent articles posted by tecate.


Is that such a bad thing?  That it has a use case as a store of value and it's being 'exploited' through that use case as a hedge?  What on earth is wrong with that? It's available for that use case to the individual, a corporation or a government.



Dublinbay12 said:


> What BTC has introduced is the novel technology now called 'Blockchain'. This perhaps has the most benefits and hence Central bank digital currencies are being studied.


So at this point, you're saying that new tech isn't bad anymore - now its good?
CBDCs are coming - but they're not going to fulfill the same role as decentralised currency ...in the same way as corporate digital currency will take a different position again (i.e. Facebook's Libra, etc.).



Dublinbay12 said:


> I don't believe in technological determinism, the success of technology is not purely a result of the technology. There are many social, political, economic and cultural reasons that are more important and require consideration. In my humble opinion BTC has succumbed to capitalism.


On what basis?  Why is a digital store of value not useful to society?



Dublinbay12 said:


> But as most of the argument here uses 'future' observation as evidence


Nonsense.  You are not open to the potential for further development relative to bitcoin and its eco-system. Nobody has relied upon 'future observation as evidence' here. In my case, I've acknowledged that bitcoin can still fail as a project. However, in following the industry, anyone can see that the technology is being worked on. Maybe those developments will be positive - and maybe they won't. However, what i'm not down with is this approach of saying its not working as intended today - so its done.
Move away from that charge of technological determinism to that inevitability thesis and its more of a case of..._"We create technology first, and then we find its uses."_


----------



## Duke of Marmalade

tecate said:


> Bitcoin is up 60% year to date vs. gold's 25%.


I was not having a swipe at bitcoin - go easy on the paranoia.
It was Mr Saylor who noted that over the last two years bitcoin has moved sideways.  He cited this as a positive as it needed to catch up on other "luxury assets".


----------



## DublinHead54

tecate said:


> Nonsense.  You are not open to the potential for further development relative to bitcoin and its eco-system. Nobody has relied upon 'future observation as evidence' here. In my case, I've acknowledged that bitcoin can still fail as a project. However, in following the industry, anyone can see that the technology is being worked on. Maybe those developments will be positive - and maybe they won't. However, what i'm not down with is this approach of saying its not working as intended today - so its done.
> Move away from that charge of technological determinism to that inevitability thesis and its more of a case of..._"We create technology first, and then we find its uses."_



Tecate, I am sorry but are you saying technological determinism is not real? That is ridiculous, it is a theory, and we clearly come from different schools of thoughts. 

I have never said the technology underpinning Bitcoin is bad or in fact that Bitcoin is bad. I have simply critiqued it objectively in the context of the social, political and cultural aspects of technology adoption. The potential benefits are being examined and implemented in the likes of CBDC, and Libra. Just as you suggest not to critique a technology that is still evolving, then surely you are open to the fact that the evolution and adoption of the technology may render Bitcoin useless? 

Lastly (and I really mean it this time), the Bitcoin whitepaper preceded to propose a utopian currency free from the perceived manipulation and control of central banks in the advent of the financial crisis. The financial crisis caused by the unrepentant growth of capitalism through free markets and deregulation. I have been involved in bitcoin, more or less from the start, and I personally find it ironic that the legitimisation of BTC has not been through the intended use but as another mechanism for capitalists to make money. The legitimisation of BTC is being gained by the very institutions it was set up to take control away from. 

You are telling me not to judge a technology because it is evolving, so I would like to understand as a last request what is your 'vision' of where BTC will end up in 5, 10, 50 years?


----------



## WolfeTone

Dublinbay12 said:


> Lastly (and I really mean it this time)



Don't go there. Trust me!


----------



## Duke of Marmalade

MaxGordon said:


> Some posters seem more concerned with winning an argument or engaging in a peacock-like display of their intellectual plumage than trying to understanding what's happening.


I bet your own feathers were all of a flutter after that poetic flourish.


----------



## Duke of Marmalade

tecate said:


> Here's a little snippet from a  published by Fidelity Investments last week:
> 
> _"Another consequence of bitcoin entering a more mature and steady stage of its life cycle is that we expect its volatility to decline in tandem, resulting in continued favorable risk-adjusted returns."_


Read the report.  A lot of effort into proving bitcoin is an "alternative asset".  I for one needed no convincing that it is "alternative", unfortunately there was no attempt to prove it was an asset.
Lots to chew on.  One nugget is the following.  Bonds are hugely overpriced - agreed.  If even 1% of current bonds migrated to bitcoin that would be an increase of $500bn market cap, thus increasing the price to 35,000$.  Now if 1% of current bonds migrated to Ryanair shares its share price would increase by 4,000%.  Of course this latter speculation would rightly be rubbished on the basis of fundamentals like revenues and profit.  With the former there are no such fundamentals and so Fidelity can get away with such outrageous speculations.
John Kelleher of Investopedia hit the nail on the head.  Bitcoin's ultimate resting place will rely on it achieving Satoshi's objective of being accepted as an alternative medium of exchange.  We are nowhere near justifying $200bn market cap, never mind an extra $500bn, based on use as a medium of exchange and we never will be IMHO.
Interestingly Fidelity covers this point indirectly by observing that the narrative over bitcoin's role in life is constantly changing.  It also points to a rather novel metric for predicting its trajectory - the number of tweets it is attracting.  I wish Mr. Saylor good luck with his gamble.


----------



## tecate

Dublinbay12 said:


> I have never said the technology underpinning Bitcoin is bad or in fact that Bitcoin is bad.


Lets call a spade a spade. In this more recent exchange, you suggested you are a 'proponent' of bitcoin. That's not in any way true. There's nothing at all wrong with not being - but let's acknowledge the fact as we find it to be.



Dublinbay12 said:


> I have simply critiqued it objectively in the context of the social, political and cultural aspects of technology adoption.


Another point of clarification. At best, you are no more 'objective' than anyone else with your claim of 'simply critiquing'.  You came on here with an accusation regarding my approach to this discussion - you couldn't back it up (because it wasn't true). That said, everyone does have some level of inherent bias, you included.



Dublinbay12 said:


> The potential benefits are being examined and implemented in the likes of CBDC, and Libra.


CBDCs and Corporate digital money like Libra are nothing like bitcoin or decentralised crypto. I welcome their arrival as they will highlight that very fact as we go forward.



Dublinbay12 said:


> Just as you suggest not to critique a technology that is still evolving,


That's a misquote. I didn't say not to critique the technology. What I did say was that as someone critiques it, they do so with the acceptance and knowledge that whatever faults are found today may not be true as we go forward.


Dublinbay12 said:


> then surely you are open to the fact that the evolution and adoption of the technology may render Bitcoin useless?


I'm open to bitcoin not succeeding for a multitude of reasons - that's why I'm on record as saying that bitcoin could still fail.



Dublinbay12 said:


> the Bitcoin whitepaper preceded to propose a utopian currency free from the perceived manipulation and control of central banks in the advent of the financial crisis. The financial crisis caused by the unrepentant growth of capitalism through free markets and deregulation. I have been involved in bitcoin, more or less from the start, and I personally find it ironic that the legitimisation of BTC has not been through the intended use but as another mechanism for capitalists to make money. The legitimisation of BTC is being gained by the very institutions it was set up to take control away from.


This has been a point of discussion within the crypto community over many years already. My personal view is that I don't see how it can't be many things to many different groups. However, if the use case currently centres on store of value - and that can be of benefit in these capitalist markets that it seems you abhor, yet also be useful to individuals for the protection of their wealth on this basis, who cares?



Dublinbay12 said:


> You are telling me not to judge a technology because it is evolving


Again, that's not what I said. What I said was that when you critique it, that you understand and acknowledge that your current assessment is not your final assessment - and the things that you find fault with bitcoin today may not be an issue going forward. Practically everyone on the other side of the debate in this discussion fails to do that.



Dublinbay12 said:


> what is your 'vision' of where BTC will end up in 5, 10, 50 years?


My understanding is changing all the time as this progresses. Like bitcoin itself, it's formative. However, as I see it today, bitcoin will continue to establish itself as a store of value. We will continue to see cycles of price on an iterative basis as price discovery of a finite, nascent asset continues and as adoption (which comes in different guises) continues.
During this time, I expect that we will have some serious clashes in terms of regulation around the world. That aspect remains a major threat to those that speculate on bitcoin. However, I don't see it as an existential threat to bitcoin itself. A full court press could only retard the rate of progress of the decentralised digital currency. It would be a major setback but it won't stop it. Furthermore, by taking this approach, the powers that be will lose any such influence they might have had over the crypto.
I believe that the Lindy effect is relevant here - and that every day above ground makes bitcoin stronger and harder for governments to tackle. For me, the genie is out of the bottle and they won't be putting it back in.
The most important factor for me though is further progress in terms of usability. Multi-sig needs to be developed such that its easy for people to utilise - making it easier for people to hold the cryptocurrency without sweating about the personal responsibility that comes with that storage. Other aspects need to be changed - and there's work underway. End users shouldn't have to see a lot of the geeky stuff that currently comes with using bitcoin. Bitcoin addresses are a case in point. It should be possible to move btc via blockchain based domain (email) addresses. It already is - but this has to be pushed out there.
As bitcoin continues to mature as a digital asset, I believe that its inherent volatility will continue to dissipate. That's going to play out over quite a number of years. As it does so, it improves its usability as a transactional currency. On that, there are still question marks - as we continue to await further development with layer 2 solutions like lightning network. However, it's more than reasonable to expect that bitcoin has an opportunity to re-emerge as a more credible day to day currency. Even if that never happens, the reality is that it can be used right now on a transactional basis. I accept that there are limitations but it will always hold that over gold.
That's my view as to where this is heading. However, it comes with the disclaimer that despite what has been suggested here, my views are subject to change. I try and keep myself as well informed as I possibly can as things change quickly in this space.



Duke of Marmalade said:


> I bet your own feathers were all of a flutter after that poetic flourish.


I think that's exactly the sort of stuff that he was talking about.


Duke of Marmalade said:


> Read the report.  A lot of effort into proving bitcoin is an "alternative asset".  I for one needed no convincing that it is "alternative", unfortunately there was no attempt to prove it was an asset.


In your opinion Dukey - as I've been over this with you plenty of times and I don't know if there's any way of proving such a thing to you specifically (whereas there would be with plenty of others).



Duke of Marmalade said:


> Of course this latter speculation would rightly be rubbished on the basis of fundamentals like revenues and profit.  With the former there are no such fundamentals and so Fidelity can get away with such outrageous speculations.


See above - it's exactly the same point that you're stuck on.



Duke of Marmalade said:


> We are nowhere near justifying $200bn market cap, never mind an extra $500bn, based on use as a medium of exchange and we never will be IMHO.


The very same - see above. You're not getting past go because you fail to understand the fundamental proposition that bitcoin brings with it.


Duke of Marmalade said:


> Interestingly Fidelity covers this point indirectly by observing that the narrative over bitcoin's role in life is constantly changing.


To my point further above - this is not a settled technology so that makes complete sense.



Duke of Marmalade said:


> It also points to a rather novel metric for predicting its trajectory - the number of tweets it is attracting.


I'm sure that they're not hanging their hat on that metric alone. However, I can see how in combination with a whole host of other metrics, there's some logic to it. It speaks to network effect.

Lastly, we didn't get your answer on the_ Indian conundrum_ in post #524 above. What would it be Dukey - shove it up yer jacksy or use bitcoin?


----------



## DublinHead54

tecate said:


> Lets call a spade a spade. In this more recent exchange, you suggested you are a 'proponent' of bitcoin. That's not in any way true. There's nothing at all wrong with not being - but let's acknowledge the fact as we find it to be.



Tecate, I am a proponent of anything that has made me 1,000%+ returns. This was my problem for a long time and in the early days of crypto, I couldn't objectively separate bitcoin from the returns and the premise, I was 100% committed much like you are that this is the change the world needs. I have worked in the industry, I have consulted with Institutions on the topic, and currently, even consult on CBDC.  I was always ready with an article or an angle to refute criticism and keep a progressive view. My only regret is hindsight, if I had that crystal ball back then, I don't think any of us expected 2017. 

It is only in the last two years through non-technical study.  that I have really started to reflect BTC / Blockchain, in terms of social, economic and political contexts. As you rightly point out, I have a bias, but you got it wrong, I am not here to question your faith, I am here to present an alternative view. My personal opinion much of the debate on bitcoin doesn't even ask the right questions. I do have a bias, and in this case, I present a fair view given that I currently would benefit from continued adoption of btc if it meant an appreciation in value. 

Why does the world need BTC as a store of value? Before you jump in with the 'oh it is decentralized, the supply is finite, it can be transferred across boundaries, doesn't need to be stored with a bank'.  

Ask yourself, why do we really need it? is it going to change the fact that nearly half the world survive on less than $5.50 a day? 

This is what I want to bring to the conversation. I think it would benefit you from taking a step back and few some of these points. But alas, you will probably just pick a part each of my sentences, without really asking yourself the questions.


----------



## Duke of Marmalade

tecate said:


> The very same - see above. You're not getting past go because you fail to understand the fundamental proposition that bitcoin brings with it.


I detect a rabbit hole.  As Fidelity says the narrative keeps changing.  But I buy into John Kelleher of Investopedia's view that it is first and last intended as an alternative medium of exchange.  A further Fidelity point is the vast number of small "retail" holdings that dominate the space.  Their narrative is as variable as Twitter itself, but boils down to one motivation, the hope of making a few bob or maybe even a life changing fortune on a speculaton


> Lastly, we didn't get your answer on the_ Indian conundrum_ in post #524 above. What would it be Dukey - shove it up yer jacksy or use bitcoin?


I think the question should be put to the Indian gentleman himself. Clearly he was not impressed by Fidelity's long winded promo of bitcoin as an alternative asset.


----------



## tecate

Duke of Marmalade said:


> As Fidelity says the narrative keeps changing.


Did they actually say that it _*"keeps"*_ changing, Dukey? I believe that to be wishful thinking on your part.



Duke of Marmalade said:


> A further Fidelity point is the vast number of small "retail" holdings that dominate the space.


What's the mystery here? This whole thing came up with retail (even if wall street are getting involved now).



Duke of Marmalade said:


> but boils down to one motivation, the hope of making a few bob or maybe even a life changing fortune on a speculaton


make a profit? How _very _dare they! It's nice to see you embrace your inner-Fidel like this. 



Duke of Marmalade said:


> I think the question should be put to the Indian gentleman himself.


boo! (or more accurately, poo!). Even with the prospect of something like this, you resist saying that bitcoin would be preferable. If anyone meets his Dukeness in an airport, be aware that he may be walking funny.


----------



## Duke of Marmalade

tecate said:


> Did they actually say that it _*"keeps"*_ changing, Dukey? I believe that to be wishful thinking on your part.


No they didn't actually say "keeps".  Below is what they did say.  I know I have you on the ropes when you resort to such pedantry.


			
				Fidelity said:
			
		

> Another angle on bitcoin’s lack of movement with traditional assets is the absence of an agreed-upon narrative. One of the reasons we kicked off this series was to explore bitcoin’s dynamic narratives. At any given time, the narratives have ranged from bitcoin as a means of payment, a reserve currency for digital assets, a store of value asset, or a portfolio optimization tool, among others.xxiii This lack of consensus could be an important reason why bitcoin has not traded in line with other assets to date. *If the lack of consensus on bitcoin’s narrative persists*, it may continue to be uncorrelated with all other assets.


----------



## tecate

Dublinbay12 said:


> I don't think any of us expected 2017.


Agreed. My expectation was for that price accumulation to play out over the course of years.



Dublinbay12 said:


> It is only in the last two years through non-technical study.  that I have really started to reflect BTC / Blockchain, in terms of social, economic and political contexts. As you rightly point out, I have a bias, but you got it wrong, I am not here to question your faith, I am here to present an alternative view. My personal opinion much of the debate on bitcoin doesn't even ask the right questions. I do have a bias, and in this case, I present a fair view given that I currently would benefit from continued adoption of btc if it meant an appreciation in value.


I understand where you're going with this. However, you have to appreciate the nature of this specific thread. i.e. it starts out from the get go as a comparison with gold - in fulfilling that same store of value use case...and that no less within the context of an 'alternative investments' sub-forum.



Dublinbay12 said:


> Why does the world need BTC as a store of value? Before you jump in with the 'oh it is decentralized, the supply is finite, it can be transferred across boundaries, doesn't need to be stored with a bank'.
> Ask yourself, why do we really need it? is it going to change the fact that nearly half the world survive on less than $5.50 a day?


Firstly, I have been living in the developing world over the course of the past 3 years where the vast majority of people live on minimum wage (€210/month). As you've identified, there are many different facets to this. I think this is a separate discussion entirely worthy of its own thread.
In any event, people in the developing world need that store of value more than you or I. There's been much discussion about usd/euro - but when we get into these countries, then that's when you see people being robbed blind by their own governments/government institutions/etc. The guy earning $5.50 a month may not need a store of value so much - but move up from that just a little and people of modest means still have their savings. So if they have their savings in a currency that debases itself within months by 10-15% (it can be much more but i'm using an example from right here), you think that they still dont need a better store of value?
That said, the guy earning $5.50 may well be depending on a sibling/family member abroad to send money home - and he's getting half of what he should because remittance services are robbing people blind. That's moving away from the store of value use case but its relevant to that group of people. Where I'm living, the most popular remittance service takes 10% - and that's just for transfers in the same currency - within the country!
I know of a buddy who's ex girlfriend keeps some savings in his US bank account - because it's illegal to hold USD within the local banking system. She would be on €210/month - and clearly she's doing that because she believes that the government are going to destroy her meagre savings.

Have a look at post #524 and see how far ordinary people will go to try and maintain the little bit of wealth they have. I'm assuming the Indian in question was a migrant trying to get his savings back from Dubai without having the government take 18% of it away. Wealthy people usually don't have to resort to inserting a store of value up their rectums.



Dublinbay12 said:


> This is what I want to bring to the conversation. I think it would benefit you from taking a step back and few some of these points. But alas, you will probably just pick a part each of my sentences, without really asking yourself the questions.


I think its a different conversation albeit a worthy one in its own right. I find myself equally conflicted in that I didn't get involved with bitcoin initially as a speculative asset. That was accidental - albeit that I couldn't possibly ignore it. I believe that there can be two aspects to this. Yes, it's an opportunity for wall street types and others to make $$$ - but I still believe that bitcoin (and decentralised currency generally) have the ability to act as a societal good in so many ways.


----------



## tecate

Duke of Marmalade said:


> No they didn't actually say "keeps".  Below is what they did say.  I know I have you on the ropes when you resort to such pedantry.


'On the ropes', Dukey?  In case we have late-comers to this discussion, that should bring them up to speed as to how you're approaching this discussion.
Overall they're still not painting the very same picture as you're contriving to do, Dukey. You realise that bitcoin not being correlated with any other asset is a good thing, right? Other than that, I know from your past scribblings that you think its a mortal sin that bitcoin is not on point first and foremost with a transactional currency use case this very day as opposed to a store of value use case. I think that's plain wrong.


----------



## Duke of Marmalade

@tecate
Whilst we are on metaphor here are a few of your below the belt punches.
I cited one of Mr Saylor's reasons for buying $425m of btc being it having moved sideways over the last 2 years.  You twist that into me having a dig at bitcoin.
I referenced the Fidelity take on changing narrative and somehow you interpret this as me through "wishful thinking" erroneously quoting them as using the word "keeps".  What is that all about?
I pointed out that the bitcoin marketplace is dominated by small retail investors having a punt.  You disingenuously interpret that as me making a morality point when clearly I was pointing out how far bitcoin is from achieving its purpose of being a medium of exchange.
Then, most bizarre of all, you give the example of an Indian gentleman who graphically illustrated that he is most unconvinced that bitcoin is digital gold, and somehow you seem to interpret that as one up for bitcoin. Go figure.


----------



## Duke of Marmalade

tecate said:


> You realise that bitcoin not being correlated with any other asset is a good thing, right?


But let's get it in perspective, and not misrepresent its significance.  Fidelity point out for example that 3% diversification into bitcoin even at its peak at start of 2018 would have delivered 1% superior performance.  Here's how the math works:
Take as numéraire a basket of conventional assets.  Then let us start at 1/1/18 with a portfolio of 100 being 97 conventional 3 bitcoin.  Bitcoin then falls 2/3ds against the numéraire and the portfolio becomes 98, being 97 conventional 1 bitcoin.  It is rebalanced to be 95 conventional 3 bitcoin.  Bitcoin then doubles in value versus the numéraire and the portfolio is 101, hey presto!  1% better than a 100% conventional portfolio even though bitcoin has fallen a third against conventional assets.
But this is just a mathematical quirk which would be the exact opposite if the path had been bitcoin beginning with a big jump and then falling back.
Fidelity sort of explain this but they still leave the impression that there is sorcery at play here - even if bitcoin does badly the diversification effect will more than compensate.  That is grossly misleading and I am a tad surprised that Fidelity would risk its reputation in this way.


----------



## tecate

@Duke of Marmalade , your penultimate post is laughable and isn't worthy of a response.
As regards your last one, maybe Fidelity might poach you as clearly you can help them protect the 7 trillion they have under management right now.


----------



## Duke of Marmalade

tecate said:


> @Duke of Marmalade , your penultimate post is laughable and isn't worthy of a response.


Ah dear, throwing in the towel


----------



## tecate

Duke of Marmalade said:


> Ah dear, throwing in the towel


Not at all, your Dukeness - I meant what I said.


----------



## Duke of Marmalade

tecate said:


> As regards your last one, maybe Fidelity might poach you as clearly you can help them protect the 7 trillion they have under management right now.


Ah, the cheapest form of wit!
I note that you never concede a point, I am sure the feeling is mutual.  But let me try one more time.
A 3% bitcoin diversification would have delivered a 1% superior return from 1/1/18 despite bitcoin having a bad performance over that period.  Do you accept that this paradox is *not *a demonstration of the benefit of diversification, regardless of Fidelity's suggestion that it is.
As a hint bear these points in mind:
Diversification does *not *enhance performance, it reduces risk, that is generally accepted.
The perversity of the outcome is a mathematical quirk of the rebalancing which would have been the opposite if bitcoin had followed the opposite path.


----------



## tecate

Duke of Marmalade said:


> Ah, the cheapest form of wit!


Wit wasn't the purpose but I won't worry if it is (or it's perceived to be) a by-product in this instance. Based on a couple of years worth of Duke-ism's, I'm not inclined to even get into it with you on this occasion.



Duke of Marmalade said:


> I note that you never concede a point


Provide a link to where you acknowledged good facets of bitcoin or decentralised cryptocurrency. I'll acknowledge or cite issues myself with bitcoin or crypto - and I can provide ample links to where I've done exactly that.



Duke of Marmalade said:


> But let me try one more time.


What on earth are you going on about, Duke?  That's why I was right the first time - you're telling a company that has 7 trillion under management that you know better? Granted they may have skín in the game but they're Fidelity....vs. your track record on this subject?  I go back to my original answer. Maybe you can go work for Fidelity and show them the error of their ways.  I won't be investing (my time) today (on this nonsense) - I'M OUT.


----------



## DublinHead54

First page



tecate said:


> Bitcoin has shown signs in the past of being *uncorrelated *to the conventional markets. We're now seeing Bitcoin being *very much correlated* to the traditional markets in panic conditions. However, lets see how this plays out over the ti






tecate said:


> 'On the ropes', Dukey?  In case we have late-comers to this discussion, that should bring them up to speed as to how you're approaching this discussion.
> Overall they're still not painting the very same picture as you're contriving to do, Dukey. *You realise that bitcoin not being correlated with any other asset is a good thing, right?* Other than that, I know from your past scribblings that you think its a mortal sin that bitcoin is not on point first and foremost with a transactional currency use case this very day as opposed to a store of value use case. I think that's plain wrong.



This sums up the discussion. There is a difference between allowing new information to change previously held beliefs, and simply changing your argument based on new information. For me the points are further discredited by posts 'attacking the person' rather than the point they make. In this case @WolfeTone highlighted a valid point in Fidelitys research, and instead of addressing it the response chose to attack the person.


----------



## tecate

Dublinbay12 said:


> This sums up the discussion. There is a difference between allowing new information to change previously held beliefs, and simply changing your argument based on new information. For me the points are further discredited by posts 'attacking the person' rather than the point they make. In this case @WolfeTone highlighted a valid point in Fidelitys research, and instead of addressing it the response chose to attack the person.


I didn't engage with WolfeTone on any such thing. 
Secondly, this 'criticism' comes from someone who has no problem making accusations based on this thread - when later he comes back and tells us he hasn't read any of it.  Even on pointing that out, a normal person would have apologised.
And as regards the poster that you mean't to cite, I have been indulging said poster for three years - and what I've read from said poster is not in any way in line with someone who is interested in an open discussion. Whilst having indulged him over the course of 3 years, I neither have the time nor the inclination to indulge him today - nor is it in any way clear to me what he's rabbiting on about.
The reality is quite the opposite.  Taking the main protagonists from the bitcoin-skeptic side of the house, how many of those individuals can link to a previous post where they proclaimed a couple of facets of bitcoin that are positive - including yourself.


----------



## Duke of Marmalade

tecate said:


> What on earth are you going on about, Duke?


I don't think folk should quote from reports they don't understand.  I was making a fairly basic critique of the Fidelity exhibits but clearly that was way above poor @tecate's head. 
Also I personally do not subscribe to the doctrine of the infallibility of the employees of 7trn organisations.


----------



## DublinHead54

tecate said:


> I didn't engage with WolfeTone on any such thing.
> Secondly, this 'criticism' comes from someone who has no problem making accusations based on this thread - when later he comes back and tells us he hasn't read any of it.  Even on pointing that out, a normal person would have apologised.
> And as regards the poster that you mean't to cite, I have been indulging said poster for three years - and what I've read from said poster is not in any way in line with someone who is interested in an open discussion. Whilst having indulged him over the course of 3 years, I neither have the time nor the inclination to indulge him today - nor is it in any way clear to me what he's rabbiting on about.
> The reality is quite the opposite.  Taking the main protagonists from the bitcoin-skeptic side of the house, how many of those individuals can link to a previous post where they proclaimed a couple of facets of bitcoin that are positive - including yourself.



Tecate, I don't profuse to have read in depth the 27 preceding pages, but I have been a long term monitor of yours and Dukes (I meant to reference him) back and forth on the subject. It looks like you agree that you can't have an objective discussion with him. I am not sure why you are seeking an apology? I have pointed out your unrelented backing of Bitcoin, it is fair to say that despite you recognizing the current weaknesses you still firmly believe that they will be resolved? A majority of your posts throughout the thread is on how BTC is changing and adapting and fixing any issues, we don't need to get in the nuanced details. 

I will point out that you posted a quote from Fidelity as evidence to support your post, Duke posted a quote from the same article to support his post, but the subsequent posts reads as if that makes him irrational and not worthy a response. 

This thread has decayed into delusion.


----------



## tecate

Before either of you go any further, link to a post where either of you recognised facets that are positive in your view(in terms of bitcoin)

Ive said it many times - there's no credibility in anyone presenting and just sledging crypto/btc without a single recognition of any merit in it whatsoever.
In your particular case, as a 'proponent' of btc (not), that should be easy.
As regards responding to his Dukeness, im under no such obligation - last i checked, that decision was mine.  That doesn't mean that he 'has me on the ropes'.  That statement alone justifies my decision not to engage with him on this occasion.
The suggestion to bring bitcoin into the investment mix doesn't just lie with Fidelity -
There are many bright(er) minds that share that view. I've looked at their rationale and it makes sense to me.  Its not awash with anyone's ego.

Your accusation is without merit - and made in ignorance having not even read the thread.  How is my backing unrelenting when i have - on numerous occasions - made reference to btc shortcomings? You made a big deal about some of those shortcomings only to find that id brought them up previously.

I don't give a fiddlers what the two of you think - changing your opinions isn't something that interests me.


----------



## WolfeTone

Heading to €10,000 again. The title of this thread hasn't aged well.


----------



## Duke of Marmalade

WolfeTone said:


> Heading to €10,000 again. The title of this thread hasn't aged well.


Yep.  The mind boggles.


----------



## Duke of Marmalade

tecate said:


> Before either of you go any further, link to a post where either of you recognised facets that are positive in your view(in terms of bitcoin)


Heck how many times have I stated that if bitcoin represented intrinsic value it is an incredible technological achievement.  But it is digital boha, all mainstream economists agree.


----------



## WolfeTone

Duke of Marmalade said:


> all mainstream economists agree



Or is it, all economists who you agree with are mainstream and those who dont necessarily agree are fringe cultists?


----------



## tecate

Duke of Marmalade said:


> Heck how many times have I stated that if bitcoin represented intrinsic value it is an incredible technological achievement.  But it is digital boha, all mainstream economists agree.


How many times? Hardly ever if at all - and the times that you may have gotten close were half hearted as a result of having been called out on it.
Only a couple of hours ago, you couldn't even bring yourself to admit that traveling through borders with btc would be preferable to shoving a kilo of gold up yer posterior. That says it all really.


----------



## Duke of Marmalade

tecate said:


> Maybe you can go work for Fidelity and show them the error of their ways.


I took you up on that.  I connected with Ria Bhutoria on LinkedIn.  Her top academic boast is a pass at Level 2 of the CFA.  Hardly Nobel Prize stuff but then you scoff at NP winners, not backed by 7trn$. Anyway this is the comment I posted to her.


			
				“The Duke on LinkedIn” said:
			
		

> Ria
> I have read your note Bitcoin as an Alternative Asset.  It explains how it is uncorrelated with other assets and therefore suitable for diversification.  Yet the backtesting shows that even being only 1% of a portfolio increases volatility which is the antithesis of diversification.  Of course having increased 30 fold over the period it is no surprise that it improves Sharpe ratios but surely the past performance disclaimer should be more than just a footnote.


If a 7trn$ outfit appoints a relatively junior person as Director of Research into Digital Assets do not expect objective treatment.

_It occurs to me that you can source my real name my looking up the above comment, I’ve no problem with that._


----------



## MaxGordon

I have a recollection that you were outed previously by the Tesla is a BOHA man?


----------



## Duke of Marmalade

MaxGordon said:


> I have a recollection that you were outed previously by the Tesla is a BOHA man?


???


----------



## DublinHead54

tecate said:


> Before either of you go any further, link to a post where either of you recognised facets that are positive in your view(in terms of bitcoin)
> 
> Ive said it many times - there's no credibility in anyone presenting and just sledging crypto/btc without a single recognition of any merit in it whatsoever.
> In your particular case, as a 'proponent' of btc (not), that should be easy.
> As regards responding to his Dukeness, im under no such obligation - last i checked, that decision was mine*.*  That doesn't mean that he 'has me on the ropes'.  That statement alone justifies my decision not to engage with him on this occasion.
> The suggestion to bring bitcoin into the investment mix doesn't just lie with Fidelity -
> There are many bright(er) minds that share that view. I've looked at their rationale and it makes sense to me.  Its not awash with anyone's ego.
> 
> Your accusation is without merit - and made in ignorance having not even read the thread.  How is my backing unrelenting when i have - on numerous occasions - made reference to btc shortcomings? You made a big deal about some of those shortcomings only to find that id brought them up previously.
> 
> I don't give a fiddlers what the two of you think - changing your opinions isn't something that interests me.



Tecate, much like you, that decision is mine, as such I choose not to engage.


----------



## tecate

Dublinbay12 said:


> Tecate, much like you, that decision is mine, as such I choose not to engage.


Good choice - why go searching for something that doesn't exist.


----------



## Duke of Marmalade

MaxGordon said:


> I have a recollection that you were outed previously by the Tesla is a BOHA man?


Mistaken identity, I’m afraid, Max.  Anyway you got your knee jerk clap on the back from @tecate.


----------



## DublinHead54

tecate said:


> Good choice - why go searching for something that doesn't exist.



Tecate, I am sure there are other ways to massage your ego, there is no need to resort to 'last word digs' it does nothing to show you as a well-reasoned person. 

To set the record straight, I intentionally never outlined why I was a proponent of Bitcoin, as that was not the subject of this discourse. So you got me there, but I am not sure what that contributes to any of your argument? You are you surely blind to your own ability to constructively discuss this topic any longer. In the short time I have engaged, all I have seen is that your counterargument to anybody voicing an opinion against yours is either; 'Any current issue with bitcoin will be fixed in future thus your point is irrelevant', or a failure to engage on relevant points in particular by @Duke of Marmalade because he is intentionally trying to goad you.

This is how in my opinion (waiting for the attack) your posts over the last 3 pages have come across. 

I will leave you with this. You described a situation in the country you are living in with money transfers, if you think Bitcoin is the only solution to that problem then that is our main difference. I don't believe in technology as the only solution and believe cultural, economic, and political issues have as much if not more impact as technology.

You don't believe that, and guess what?............ that is ok. I am not going to lose sleep over it, we are all entitled to our own opinions which are of course subject to change. 

However, I haven't (yet) seen you post any real credible evidence to change my opinion that BTC and its developments over the last 10 years are going to obtain the original goal of the whitepaper. 

As usual, feel free to decipher each sentence line by line. I just hope that you can come to accept my opinion.


----------



## tecate

Dublinbay12 said:


> Tecate, I am sure there are other ways to massage your ego, there is no need to resort to 'last word digs' it does nothing to show you as a well-reasoned person. To set the record straight, I intentionally never outlined why I was a proponent of Bitcoin, as that was not the subject of this discourse. So you got me there, but I am not sure what that contributes to any of your argument?


It's entirely relevant. You go on about me being one-sided when that's not the case and I've proven it not to be the case via previous posts (in identifying issues/shortcomings with bitcoin).
Secondly, how was it a 'last word dig' when it turns out I was right on the money - in which case you should have been straight with your answer.
I've seen no evidence that you are a 'proponent' of bitcoin - I was surprised when you used that descriptor a few days ago. Benefiting from trading bitcoin doesn't make anyone a proponent. I've come across many folks who are entirely cynical about blockchain/crypto and trade it.
You say that consideration of the positive facets of bitcoin are not relevant to the discussion. Why then take  me to task (wrongly as it turns out) for not outlining the shortcomings of bitcoin?



Dublinbay12 said:


> This is how in my opinion (waiting for the attack) your posts over the last 3 pages have come across.


 A couple of posts ago, you claim I was 'attacking the poster' when it's yourself that has done this.  Worse still, you made that accusation having not had the decency to read the thread. Taking things to another level of bad behaviour, you don't have the fibre to fess up and acknowledge that I have cited/acknowledged all manner of shortcomings of bitcoin once it has been pointed out to you.



Dublinbay12 said:


> I will leave you with this. You described a situation in the country you are living in with money transfers, if you think Bitcoin is the only solution to that problem then that is our main difference.


For a guy who reckons he takes a step back, those must be very small steps. You accused me of cherry-picking - and that's what you're doing here yourself. In answering your question, I outlined two related elements as to how bitcoin could be useful in the developing world. Store of value was one (which you wrongly claim isn't relevant) and remittances/money transfer was another.
Secondly, where did I say that bitcoin is the only solution? You're getting ahead of yourself (see my references to your wayward assumptions and mind-reading in previous posts).



Dublinbay12 said:


> However, I haven't (yet) seen you post any real credible evidence to change my opinion that BTC and its developments over the last 10 years are going to obtain the original goal of the whitepaper.


Here you go trying to set this narrowly defined parameter as a couple others have leaned on over the course of discussions here. So if it's not fulfilling what's set out strictly in the whitepaper, then there's nothing to discuss?  That's nonsense.
From the Inevitability Thesis -> _"we create technology first and then we find its uses"_.
You're not the only one to write it off on the basis that it isn't being used this very day for the use case described in the whitepaper. How wayward can you get than to write off a technology on that basis and secondly to do so when it's still being developed.
It makes complete sense that it goes forward with a store of value use case, establishes itself in that role, grows market cap and adoption year on year and thus reduces volatility.  As that volatility declines and as UX/UI improves and layer 2 solutions provide a fix for scalability/cost/speed - that original use case can potentially be revisited.



Dublinbay12 said:


> As usual, feel free to decipher each sentence line by line. I just hope that you can come to accept my opinion.


I respected your opinion prior to the point where you came after me and the integrity of my posts without having a care to read what I'd written in its entirety. You accused me of only bringing up plus points re. bitcoin - then proceeded to enlighten us with examples of its shortcomings - only to find that they were items that I'd brought up long before you.
Despite what you say, you never presented here in any way as a bitcoin 'proponent'. My recollection is that you said initially that you expected it to fail ultimately.


----------



## DublinHead54

Tecate,

Perhaps I should have been clearer, I was a proponent of BTC, I am a proponent of Blockchain. That does not mean I do not have criticisms for both. I hope that clarifies for you enough that you can push past your approach and discuss the points I have actually raised. I am approaching this at a different angle, don't you agree? You believe in the 'inevitability thesis based on Max Kranzbergs 6 laws of technology (you've posted it multiple times). I don't believe this theory and point to (Postmans 5 points on technological change) as some of the literature I have engaged with and agree with. Again it is totally fine that we have different opinions. 

If you feel that, I am attacking you, it is not personal, I am trying to add a non-technological aspect to the conversation, unless you don't want that? It is fair to say that your identifications of BTC flaws have mostly been technological (prior to my involved in the thread)? If not please provide links to the posts in the 27 pages. I would hope you would find it acceptable that on a forum people will read the first few pages and go to the last. 

Lastly, the below is not an example of cherry-picking, and I am not accusing you of cherry-picking, you have posted articles that serve to enhance your stance and refute others, which is fine but it is not a rounded review of all literature. My comment on the below was pointing out in an example you provided that BTC is not the only solution. 



tecate said:


> For a guy who reckons he takes a step back, those must be very small steps. You accused me of cherry-picking - and that's what you're doing here yourself. In answering your question, I outlined two related elements as to how bitcoin could be useful in the developing world. Store of value was one (which you wrongly claim isn't relevant) and remittances/money transfer was another.
> Secondly, where did I say that bitcoin is the only solution? You're getting ahead of yourself (see my references to your wayward assumptions and mind-reading in previous posts).




I am not going to respond any further with you, as by now you have not actually provided any substance to discuss the points I have brought to the table. Instead you appear fixated on how I can be a proponent when also critiquing....I think that was the third post in a row you have made the same comment. 

Good Luck Tecate.


----------



## tecate

Dublinbay12 said:


> Perhaps I should have been clearer, I was a proponent of BTC, I am a proponent of Blockchain.


I appreciate you clearing that up - you're not a proponent of bitcoin.



Dublinbay12 said:


> I hope that clarifies for you enough that you can push past your approach and discuss the points I have actually raised.


To be clear, it's central to your original claim (that you're a bitcoin proponent when you're not) and to the accusation that you proceeded with. Just so there's no misunderstanding, anyone making accusations will have to prove them as far as I'm concerned.



Dublinbay12 said:


> I am approaching this at a different angle, don't you agree?


By setting out (wrongly) with an accusation? Yes, you could say that.



Dublinbay12 said:


> You believe in the 'inevitability thesis based on Max Kranzbergs 6 laws of technology (you've posted it multiple times). I don't believe this theory and point to (Postmans 5 points on technological change) as some of the literature I have engaged with and agree with. Again it is totally fine that we have different opinions.


Agreed.



Dublinbay12 said:


> If you feel that, I am attacking you, it is not personal, I am trying to add a non-technological aspect to the conversation, unless you don't want that? It is fair to say that your identifications of BTC flaws have mostly been technological (prior to my involved in the thread)?


Then leave the personal attack aside and simply discuss the tech at hand - that would be my view.  That's what we're supposed to be doing here.



Dublinbay12 said:


> It is fair to say that your identifications of BTC flaws have mostly been technological (prior to my involved in the thread)?


That depends on what you feel you've specifically added in terms of an actual/tangible flaw.



Dublinbay12 said:


> I would hope you would find it acceptable that on a forum people will read the first few pages and go to the last.


Not if you're attacking the poster, not so much (and certainly not in this instance where what went before was relevant to your accusation based on later posts). I can live with it if you correct yourself when points raised in previous pages are pointed out to you - but that didn't happen either.



Dublinbay12 said:


> Lastly, the below is not an example of cherry-picking, and I am not accusing you of cherry-picking, you have posted articles that serve to enhance your stance and refute others, which is fine but it is not a rounded review of all literature.


That's incorrect.


Dublinbay12 said:


> My comment on the below was pointing out in an example you provided that BTC is not the only solution.


I agree that it's not the only potential solution for that use case. - I never suggested otherwise. They're not the same solutions though. Bitcoin establishing itself as a store of value has context with regard to its use/potential use for remittances/money transfers.



Dublinbay12 said:


> by now you have not actually provided any substance to discuss the points I have brought to the table.


I disagree.


Dublinbay12 said:


> Instead you appear fixated on how I can be a proponent when also critiquing....I think that was the third post in a row you have made the same comment.


And it finally resulted in you correcting yourself - i.e. that you're not a proponent of bitcoin. It would have saved everyone a lot of time if you were straight up on that - from the get go.


----------



## MaxGordon

Duke of Marmalade said:


> Mistaken identity, I’m afraid, Max.



You had me going there for awhile.

Not sure why the denials unless a long river is your knee jerk reaction.

The thing is...._once you eliminate the impossible, whatever remains, no matter how improbable, must be the truth.  _


----------



## Duke of Marmalade

Dublinbay12 said:


> Tecate, much like you, that decision is mine, as such I choose not to engage.


If you ever get to read those 27 pages you will discover that @tecate is the king of the cherry pickers. She quotes selectively from any reports, some of which are clearly above his comprehensibility (doesn't stop him/her).
Most infamous was the selective illustration of how John Kelleher of Investopedia rated bitcoin as a store of value.  When I pointed out that John's primary assumption in making this assessment was that bitcoin would achieve its mission of being an alternative medium of exchange s/he had the audacity to accuse me of cherry picking.


----------



## Duke of Marmalade

Inferlatium said:


> It's at 10,128.96 euro at the moment, hardly crashing!


Ironically, this is bad news for bitcoin cultists.  Bitcoin is displaying a volatility far, far, removed from its aim of being an accepted medium of exchange.  It is a plaything for small time retail punters who are easily convinced that the end of the world is nigh. In fact given the very favourable backdrop for that narrative it is really rather surprising that Bitcoin is still almost 40% below its peak.


----------



## WolfeTone

Duke of Marmalade said:


> It is a plaything for small time retail punters who are easily convinced that the end of the world is nigh.



  Have to hand it to you Duke, you are certainly dogged.
But just to entertain that notion for a moment (again)....the end of the world, or in your typically preferred lexicon "Armageddon"....is there not a market for this? I think since biblical times, this concept has been sold, and re-sold to the public, and in no small doses either. There is value in that.

So perhaps others are seeing a value in bitcoin, as a concept to keep money outside conventional monetary system using a new technology called blockchain? It may not be your cup of tea but you can't deny it hasn't provoked your interest and occupied your time here.


----------



## DublinHead54

tecate said:


> I appreciate you clearing that up - you're not a proponent of bitcoin.
> 
> To be clear, it's central to your original claim (that you're a bitcoin proponent when you're not) and to the accusation that you proceeded with. Just so there's no misunderstanding, anyone making accusations will have to prove them as far as I'm concerned.
> 
> 
> By setting out (wrongly) with an accusation? Yes, you could say that.
> 
> 
> Agreed.
> 
> Then leave the personal attack aside and simply discuss the tech at hand - that would be my view.  That's what we're supposed to be doing here.
> 
> That depends on what you feel you've specifically added in terms of an actual/tangible flaw.
> 
> Not if you're attacking the poster, not so much (and certainly not in this instance where what went before was relevant to your accusation based on later posts). I can live with it if you correct yourself when points raised in previous pages are pointed out to you - but that didn't happen either.
> 
> That's incorrect.
> I agree that it's not the only potential solution for that use case. - I never suggested otherwise. They're not the same solutions though. Bitcoin establishing itself as a store of value has context with regard to its use/potential use for remittances/money transfers.
> 
> I disagree.
> And it finally resulted in you correcting yourself - i.e. that you're not a proponent of bitcoin. It would have saved everyone a lot of time if you were straight up on that - from the get go.



This has actually gotten to be quite hilarious. Please explain what factual issue with Bitcoin I have gotten wrong? 

If you want to talk about the tech stop referring to future developments as your get out clause. 

Unless you've discovered a crystal ball? Maybe I'll take that approach in discourse going forward.

I would happily bet you 10 BTC that whatever stance you take today will fail to become reality.


----------



## DublinHead54

Duke of Marmalade said:


> Ironically, this is bad news for bitcoin cultists.  Bitcoin is displaying a volatility far, far, removed from its aim of being an accepted medium of exchange.  It is a plaything for small time retail punters who are easily convinced that the end of the world is nigh. In fact given the very favourable backdrop for that narrative it is really rather surprising that Bitcoin is still almost 40% below its peak.



What I note is that once you make a reference for example cherry picking, tecates approach is to accuse the poster of the same. his/her approach is to attack the person and their beliefs as a reason why their point is wrong. I don't think they believe somebody can be neutral on a topic. 

This entire thread is laughable at this stage. Looking forward to Tecates impending accusations.


----------



## MaxGordon

WolfeTone said:


> It may not be your cup of tea but you can't deny it.......



See that's where you're wrong, WolfeTone!

He is a topper at denying things until, that is, the goose is cooked, the cat debagged. Then silence. Not even a "you was right, Max"....


----------



## tecate

Duke of Marmalade said:


> some of which are clearly above his comprehensibility (doesn't stop him/her).


Kneel before the great Duke and his latin prose. 
Whilst it might oil yer ego, it did nothing for your cause.



Duke of Marmalade said:


> Most infamous was the selective illustration of how John Kelleher of Investopedia rated bitcoin as a store of value.  When I pointed out that John's primary assumption in making this assessment was that bitcoin would achieve its mission of being an alternative medium of exchange s/he had the audacity to accuse me of cherry picking.


It's there for all to see - people can scroll back and check for themselves. There's a difference between a well founded claim and one that's vapourware.



Dublinbay12 said:


> Please explain what factual issue with Bitcoin I have gotten wrong?


Eh, you quoted my entire post. What are you referring to specifically?



Dublinbay12 said:


> If you want to talk about the tech stop referring to future developments as your get out clause.


If you have a specific issue - then lets hear it. Otherwise, you can place your instructions the same place his dukeness places his gold in when travelling internationally.


Dublinbay12 said:


> What I note is that once you make a reference for example cherry picking, tecates approach is to accuse the poster of the same. his/her approach is to attack the person and their beliefs as a reason why their point is wrong.


Some claims are well-founded, some are not. 



Dublinbay12 said:


> This entire thread is laughable at this stage.


You've certainly made an impression - I'll give you that.



Dublinbay12 said:


> Unless you've discovered a crystal ball? Maybe I'll take that approach in discourse going forward.


I think you have the carnival market cornered with your mystic mind reading already (albeit more as a 'performance art' rather than a thing of accuracy).



Dublinbay12 said:


> I don't think they believe somebody can be neutral on a topic.


HA!  You think you're fooling anyone?  The 'bitcoin proponent'.



Dublinbay12 said:


> I would happily bet you 10 BTC that whatever stance you take today will fail to become reality.


I had hoped for a better quality of discussion - so in that sense, it's just as well I didn't see this earlier. On the flipside, we have btc bobbling around $12K so it could be worse. And clearly, this thread confirms that there will be laggards paying top dollar for BTC in the time ahead (so thank you :-D  ).


----------



## DublinHead54

Tecate,

You made a comment that we should trust Fidelity's opinion on Bitcoin because they have $7 trillion AUM. However,, the creation of BTC in part came as a response to the lack of trust in Financial Institutions in the aftermath of the financial crisis (Link). I have seen it referenced in this thread the pro that BTC is 'trustless', so I find it ironic that the very institutions that shouldn't be trusted in the eyes of Bitcoin, are the institutions you trust to legitimize BTC. Quite a conundrum, and I recognise you've got yourself ok with that due to earlier posts.

I tend to favour academic literature on the topic of Blockchain / BTC. Medium posts / articles by institutions are inherently biased, for example, Fidelity has a vested interest through their custody business of promoting the success of BTC.

The evidence exists today, there has been very little institutional pickup. I don't really see this changing in the near term, I can comment from experience as I was involved in the rollout of the CME Futures and there was very little appetite on Wall Street. Most of the interest came from Main street, and this was during the peak of 2017. Futures are non-deliverable so just a cash product but are a good indicator of the institutionalization of BTC, the volume history shows they have largely gone nowhere since inception. Maybe this will change but the evidence thus far suggests it won't.

Can you please explain to me why you do not think I am a BTC proponent? Let me be clear.....I am a proponent of the returns BTC has provided and continues to provide, but I am not a proponent of the vision. In particular and rightly as you have accepted the problems that BTC aims to solve doesn't need BTC to solve them.

As an Example (not cherry-picking), often sighted is the cheap money transfer anywhere in the world and the ripoff fees. I agree that given it is a global currency it is not affected by borders, and that is positive. However, what is often cited is Western Union and workers sending money back home, what is the real problem there? It isn't a technological problem, it is the legal problem of illegal immigrants and illegal work. I worked in the US legally for many years and often transferred money back to GBP / EUR, I never had to use Western Union and continually the fees got cheaper (Transfer wise / Worldfirst). BTC would be quicker, but ultimately today that trade would still be USD --> BTC --> EUR, so you have to weigh up the volatility risk vs the fees paid to go straight from USD --> EUR. Anyway, the point being BTC may allow illegal immigrants to send money home cheaper but it does not solve the problem. I would also summize that as illegal immigrants are taking advantage of, if they were to start using BTC they would be taking advantage of as they would still require to convert for example $ to BTC.

So the question I want to ask you, is why do you want BTC support the exploitation of illegal workers?


----------



## Duke of Marmalade

@Dublinbay12
Excellent post.  I have referenced several times the almost complete absence of endorsement from mainstream economic thinking.  @tecate rebuffs by calling them Keynesians ( a four letter word in his worldview) and reminding us of Krugman's Fax Machine moment (I did laugh at that one).  Now you confirm from experience that Wall Street aren't buying either.  I had a closed mind on bitcoin as soon as I read the White Paper - the argument that bitcoin would get intrinsic value if enough people thought it had was oh so contrived.  You clearly have had an open mind but have lost the faith (maybe that's a bit overkill).
This is a playground for retail punters who are easily lured by pictures of gold bitcoins and talk of blockchain technology.
Indeed how ironic that @tecate seems to regard Fidelity as almost infallible.  These are but 2 highly irresponsible speculations from their Director of Research into Digital Assets.
1) If only 1% of bonds migrated to bitcoin its market cap would rise from $200bn to $500bn
2) If it could catch only 10% of the Alternative Assets market it would rise to $1.6trn.
I know she has a Level 2 in CFA but don't tell me she hasn't a vested interest in stoking enthusiasm for bitcoin in a niche segment of  Fidelity's client base.
John Kelleher (cited by none other than @tecate) is a big fan of bitcoin but he realises that the project will ultimately only succeed if it achieves Satoshi's prediction of being generally accepted as a medium of exchange.  IMHO it will never happen.


----------



## MaxGordon

Hey Duke,

Is that a knee jerk clap for Dublin Bay Prawns or is it a different type of clap? 

I thought that you wood come out swinging - it seems not. I pride myself on my accuracy - can you confirm that I was not mistaken please?

I would like to know when you read the White Paper. Please answer it without the usual bluster, equivocation, et cetera.


----------



## DublinHead54

Alas, I have only passed Level 1 of the CFA .

I am still heavily involved in 'blockchain' projects, it is an emerging area and that typically leads to money being spent on it and interesting days in work. I am ultimately, working towards building a better financial system and infrastructure, and if we can use Blockchain to help then so be it. I am not trying to hammer a blockchain solution into place regardless of its value. 

I agree with your position on Satoshis prediction, it would require governments, central banks to roll over and relinquish control, which I can't see happening. Anecdotally, I have a friend who works in consulting and mid 2017 was a starting to sell 'blockchain' solutions across the US. He would tell me of meetings where he would make a presentation and the majority of the questions came back were how could they buy BTC or cryptocurrencies for themselves. Or when I was once working out in a gym and the personal trainer was telling me I should buy this new cryptocurrency 'insert random name' as it was about to go off. The mainstream rise of BTC has led it to be a retail investors punt, very little if any adoption has progressed in using it as a currency.


----------



## Duke of Marmalade

MaxGordon said:


> I thought that you wood come out swinging - it seems not. I pride myself on my accuracy - can you confirm that I was not mistaken please?


Sorry, I don't understand a word of that.  I haven't passed even Level 1 of CFA.  (44 mins and no clap from @tecate, did you say something to upset her?)


----------



## WolfeTone

Duke of Marmalade said:


> I have referenced several times the almost complete absence of endorsement from mainstream economic thinking



Its hardly an endorsement of your position, is it?

I can recall an almost complete absence of endorsement from mainstream economic thinking for economic crash in 2008. Anything from "The Best Is Yet To Come" to "Soft-landing" was about as insightful as it got. Those not on the mainstream thinking were often dismissed as cranks and cribbers. 
The difference between that and an economist view on bitcoin is that the property bubble, and subsequent fall-out, is the bread-and-butter of economists. Not some new technology like blockchain.

If the mainstream economists cannot even get close on their predictions for bread-and-butter issues like a property bubble, then what hope something like bitcoin?

Krugmans call for a property bubble

Joseph E Stiglitz: An economist in Freefall

Now don't get me wrong, I have a lot of time for the venerable Krugman and Stiglitz. I'm just open in the knowledge that, like most economists when predicting the future, are prone to absolute howlers. Given the nature of their field, and its infinite variabilities that is quite understandable. 
Notwithstanding that they could be correct on bitcoin (their record to date is pretty lamentable), it is a wonder why so much value is stored in their opinions on bitcoin?


----------



## tecate

Dublinbay12 said:


> You made a comment that we should trust Fidelity's opinion on Bitcoin because they have $7 trillion AUM. However,, the creation of BTC in part came as a response to the lack of trust in Financial Institutions in the aftermath of the financial crisis (Link). I have seen it referenced in this thread the pro that BTC is 'trustless', so I find it ironic that the very institutions that shouldn't be trusted in the eyes of Bitcoin, are the institutions you trust to legitimize BTC. Quite a conundrum, and I recognise you've got yourself ok with that due to earlier posts.


I did NO such thing! Once again, you misrepresent what I've said. What I actually said was that despite Fidelity having skín in the game, they're still more credible than his Dukeness on the basis that I know what he has 'added' to this discussion. He's not credible in this discussion. I read what he had to say - and I've read many different versions as to how various individuals and organisations have justified an investment strategy that incorporates cryptocurrency within it. It's something that makes sense to me. That's not to say that I'm not open to hearing the contrarian view. However, to my eyes, his Dukeness' view has been shot a few years ago already.
You come on here and lecture me about bias - whilst indulging your own.  You've suggested as part of this that you are a much higher mortal capable of being genuinely independent of bias. You know what that was? Horsedung. You lied with regard to suggesting you  were a 'bitcoin proponent' - and complained when I kept challenging you on it until you finally admitted the truth. You have never once given his dukeness the same treatment - and I'm sorry but there's no way anyone that embraces this discussion on a reasoned basis thinks the guy does the same thing. There is no open mind to be had there. And in rounding on one (without being able to back it up I might add) and doing a chuckle bros routine with the other, you've betrayed all that you claimed (the impartial view) to be a complete sham. The irony is that I did see you as a neutral up until recent revelations. But I'm often wrong on things - and this is definitely an example of that.

I hope that sufficiently clarifies things for you.



Dublinbay12 said:


> I tend to favour academic literature on the topic of Blockchain / BTC. Medium posts / articles by institutions are inherently biased, for example, Fidelity has a vested interest through their custody business of promoting the success of BTC.


I'd sooner favour the business section of the Daily Sport than anything that the Duke has to say on this subject. There's other things the publication might want to big up but ego is not one of them.
You seem to have overlooked it for some reason but I explicitly acknowledged that Fidelity Digital Investments has a vested interest - but I'd still put that ahead of your new found friend. They still have an industry-leading reputation to maintain at least whereas...(!!).



Dublinbay12 said:


> The evidence exists today, there has been very little institutional pickup.


I believe it has been discussed already.  Bitcoin/crypto has been one of the first emerging asset classes that rose independent of /without the involvement of Wall Street.
Institutional entry has been slow but the interest is there. It's not just a case of these guys rocking up and taking a position. All manner of services have been built out over the course of time these discussions have been ongoing on AAM. The arrival of custodians and all manner of ancillary services that institutions demand. Either a lot of people are going to a lot of time/expense for no reason or they know different. Regulation still isn't ironed out - that's ongoing.



Dublinbay12 said:


> I don't really see this changing in the near term,


I disagree but that's ok.



Dublinbay12 said:


> I can comment from experience as I was involved in the rollout of the CME Futures and there was very little appetite on Wall Street.


And can you comment on the uptick in terms of open interest in CME bitcoin futures - which has doubled in recent months? I'm in full agreement that they have gotten off to a slow start but it seems to me that this is changing.



Dublinbay12 said:


> Most of the interest came from Main street, and this was during the peak of 2017.


See above - wall street had no hand, act or part in crypto up until now-ish.



Dublinbay12 said:


> Futures are non-deliverable so just a cash product but are a good indicator of the institutionalization of BTC, the volume history shows they have largely gone nowhere since inception. Maybe this will change but the evidence thus far suggests it won't.


Have futures volumes been low up until now? Definitely. Beyond that we'll disagree as from what I'm seeing, the way is being paved for greater institutional access and involvement. Futures can be physically deliverable also - as in the offering from Bakkt. A lot was expected of them initially but they under-whelmed. Despite that - just like CME bitcoin futures, they've seen a considerable uptick in volumes more recently.



Dublinbay12 said:


> Can you please explain to me why you do not think I am a BTC proponent? Let me be clear.....I am a proponent of the returns BTC has provided and continues to provide, but I am not a proponent of the vision. In particular and rightly as you have accepted the problems that BTC aims to solve doesn't need BTC to solve them.


Once again, you're misrepresenting what I stated.  We agreed that there were other means of coming at remittances/money transfers. I didn't say that those other means were the same or offer the very same as bitcoin.  That's in relation to that specific use case. There are other use cases as you know.
If you're not a proponent of the vision, then how are you a proponent at all? I've said it before - someone who has just benefitted from the speculative side or actively traded  but otherwise doesn't give a fiddlers about bitcoin isn't a proponent.



Dublinbay12 said:


> As an Example (not cherry-picking), often sighted is the cheap money transfer anywhere in the world and the ripoff fees. I agree that given it is a global currency it is not affected by borders, and that is positive. However, what is often cited is Western Union and workers sending money back home, what is the real problem there? It isn't a technological problem, it is the legal problem of illegal immigrants and illegal work. I worked in the US legally for many years and often transferred money back to GBP / EUR, I never had to use Western Union and continually the fees got cheaper (Transfer wise / Worldfirst). BTC would be quicker, but ultimately today that trade would still be USD --> BTC --> EUR, so you have to weigh up the volatility risk vs the fees paid to go straight from USD --> EUR. Anyway, the point being BTC may allow illegal immigrants to send money home cheaper but it does not solve the problem. I would also summize that as illegal immigrants are taking advantage of, if they were to start using BTC they would be taking advantage of as they would still require to convert for example $ to BTC.


Much of what you state above is true.  However, without btc being a prospect, then change in this regard can take longer still. Maybe you think they'll just change the rules of the game and then the reason for bitcoin to exist goes away. When there's centralised systems at play, governments and authorities (and others when they're enabled) will meddle.
As regards the need to convert - its logical that this needs to happen in these early days. Bitcoin was born into a FIAT world. So there will be exchange for the foreseeable. There will be a level of volatility for the foreseeable. That's entirely logical to me. On that exchange friction, last Monday, Brian Brooks (Comptroller of the Currency in the US) stated that DeFi will render many of the financial services rendered by high street banks obsolete going forward. If you have digital FIAT and decentralised exchanges, there's not going to be any need to take anything like the fat margin that's being taken now in exchanging digital currencies.


Dublinbay12 said:


> So the question I want to ask you, is why do you want BTC support the exploitation of illegal workers?


That's completely disingenuous as  a question. You don't go from A to D without passing through stages B and C. You know full well that with something like this, there is a process to go through to get volume up to a sufficient level. In the meantime, if people offer add-on services that implicate bitcoin, what's wrong with that? People make up their own mind as to what they use. Practically everyone I know that first came into contact with crypto bought a micro quantity at a bad rate. As they educated themselves, they've progressed to smarter transactions implicating crypto. There's no reason that ordinary people in the context you mention can't do the same thing.


----------



## tecate

Dublinbay12 said:


> I am not trying to hammer a blockchain solution into place regardless of its value.


Nor should you - and bringing that round to recent exchanges, it would be wrong to think that anyone else here wants that either. That's not the case.



Dublinbay12 said:


> I agree with your position on Satoshis prediction,


I beg to differ. Bitcoin can and is establishing itself as a store of value without first becoming all pervasive as a means of exchange. Bear in mind gold is not a means of exchange.



Dublinbay12 said:


> it would require governments, central banks to roll over and relinquish control, which I can't see happening.


So is it your view that bitcoin will be regulated out of existence?



Dublinbay12 said:


> Anecdotally, I have a friend who works in consulting and mid 2017 was a starting to sell 'blockchain' solutions across the US. He would tell me of meetings where he would make a presentation and the majority of the questions came back were how could they buy BTC or cryptocurrencies for themselves. Or when I was once working out in a gym and the personal trainer was telling me I should buy this new cryptocurrency 'insert random name' as it was about to go off. The mainstream rise of BTC has led it to be a retail investors punt, very little if any adoption has progressed in using it as a currency.


So you're establishing here that greed exists (hardly surprising) and that bitcoin has not as yet succeeded as a means of exchange?  Sounds right to me. The former is part of the human condition - that's never going to change. There's irrationality in all markets. That doesn't mean there isn't anything tangible at the heart of decentralised crypto.
As regards the latter, bitcoin has been hamstrung as a means of exchange due to scalability issues, UI/UX/Ease of use difficulties, etc. Approaches are being taken to all of these issues. Furthermore, it will stand a better chance on this front as volatility reduces. That's going to be a long term process but it's already evident.



WolfeTone said:


> Its hardly an endorsement of your position, is it?


His Dukeness would have everyone believe that turkeys vote for Christmas. 



WolfeTone said:


> I can recall an almost complete absence of endorsement from mainstream economic thinking for economic crash in 2008. Anything from "The Best Is Yet To Come" to "Soft-landing" was about as insightful as it got. Those not on the mainstream thinking were often dismissed as cranks and cribbers.
> The difference between that and an economist view on bitcoin is that the property bubble, and subsequent fall-out, is the bread-and-butter of economists. Not some new technology like blockchain.


Two very well made points.


----------



## MaxGordon

Duke of Marmalade said:


> Sorry, I don't understand a word of that.



I don't believe you, Watson - nobody can be so unaware or in that much denial.

Also, I note, how you've avoided the specific question in my last post. Now, there's a surprise!

You really have some front!


----------



## Duke of Marmalade

WolfeTone said:


> Its hardly an endorsement of your position, is it?
> 
> I can recall an almost complete absence of endorsement from mainstream economic thinking for economic crash in 2008. Anything from "The Best Is Yet To Come" to "Soft-landing" was about as insightful as it got. Those not on the mainstream thinking were often dismissed as cranks and cribbers.
> The difference between that and an economist view on bitcoin is that the property bubble, and subsequent fall-out, is the bread-and-butter of economists. Not some new technology like blockchain.
> 
> If the mainstream economists cannot even get close on their predictions for bread-and-butter issues like a property bubble, then what hope something like bitcoin?
> 
> Krugmans call for a property bubble
> 
> Joseph E Stiglitz: An economist in Freefall
> 
> Now don't get me wrong, I have a lot of time for the venerable Krugman and Stiglitz. I'm just open in the knowledge that, like most economists when predicting the future, are prone to absolute howlers. Given the nature of their field, and its infinite variabilities that is quite understandable.
> Notwithstanding that they could be correct on bitcoin (their record to date is pretty lamentable), it is a wonder why so much value is stored in their opinions on bitcoin?


Ah Wolfie let's dig a rabbit hole.  Maybe @tecate will stay out, she is well occupied on the Eastern Front fighting @Dublinbay12 
I'm no great fan of the economics profession and I agree they have a very mixed record at accurately predicting economic outcomes.  But that is not really at stake here.  Bitcoin and other currencies purport to have value even though they patently do not have any intrinsic value. I find it intriguing how easily people can buy into this concept.  They swallow the argument that their fiat has no intrinsic value, so what is the difference, and then they get easily persuaded by the scarcity argument. 
Let's face it a store of value or medium of exchange that actually has no intrinsic value is quite a leap of faith for the human mind, and I am sure a few breaths were held when there was the official break with the Gold Standard. Without being an historian I bet that that move was hotly disputed by the economics profession of the time and probably in the end had mainstream consensus.
There seems to me a complete absence of any such debate on crypto in mainstream economic circles.  They obviously believe the comparison between fiat's lack of intrinsic value and cryptos' is totally irrelevant.  I myself see no comparison at all, fiat's value is supported by a whole institutional, cultural and economic edifice and yes by Central Banks entrusted to maintain its value - but hey that is a rabbit hole.
The reason I brought it up again is that @Dublinbay12 drew my attention to the absence of any real institutional support for bitcoin.  Against the zeitgeist of the times I for one still trust the experts.


----------



## DublinHead54

tecate said:


> I did NO such thing! Once again, you misrepresent what I've said. What I actually said was that despite Fidelity having skín in the game, they're still more credible than his Dukeness on the basis that I know what he has 'added' to this discussion. He's not credible in this discussion. I read what he had to say - and I've read many different versions as to how various individuals and organisations have justified an investment strategy that incorporates cryptocurrency within it. It's something that makes sense to me. That's not to say that I'm not open to hearing the contrarian view. However, to my eyes, his Dukeness' view has been shot a few years ago already.
> You come on here and lecture me about bias - whilst indulging your own.  You've suggested as part of this that you are a much higher mortal capable of being genuinely independent of bias. You know what that was? Horsedung. You lied with regard to suggesting you  were a 'bitcoin proponent' - and complained when I kept challenging you on it until you finally admitted the truth. You have never once given his dukeness the same treatment - and I'm sorry but there's no way anyone that embraces this discussion on a reasoned basis thinks the guy does the same thing. There is no open mind to be had there. And in rounding on one (without being able to back it up I might add) and doing a chuckle bros routine with the other, you've betrayed all that you claimed (the impartial view) to be a complete sham. The irony is that I did see you as a neutral up until recent revelations. But I'm often wrong on things - and this is definitely an example of that.



Tecate, please show me one inaccurate comment I have made on Bitcoin during this discourse? You seem hamstrung on discrediting my position because you don't believe me to be a proponent in your eyes. I clarified my statement to see if you would move on, but no, you seem hellbent on rather than actually discussing my points to continually try to discredit them based on the fact I can't be a proponent. I guess that is why you admit that you can't embrace this discussion on a reasoned basis.

This just goes to show, that anyone who critiques BTC is a naysayer and can't be neutral?




tecate said:


> I'd sooner favour the business section of the Daily Sport than anything that the Duke has to say on this subject. There's other things the publication might want to big up but ego is not one of them.
> You seem to have overlooked it for some reason but I explicitly acknowledged that Fidelity Digital Investments has a vested interest - but I'd still put that ahead of your new found friend. They still have an industry-leading reputation to maintain at least whereas...(!!).



I was referring to academic papers and not what Duke has to say.



tecate said:


> I believe it has been discussed already.  Bitcoin/crypto has been one of the first emerging asset classes that rose independent of /without the involvement of Wall Street.
> *Institutional entry has been slow but the interest is there. *It's not just a case of these guys rocking up and taking a position. All manner of services have been built out over the course of time these discussions have been ongoing on AAM. The arrival of custodians and all manner of ancillary services that institutions demand. Either a lot of people are going to a lot of time/expense for no reason or they know different. Regulation still isn't ironed out - that's ongoing.
> 
> And can you comment on the uptick in terms of open interest in CME bitcoin futures - which has doubled in recent months? I'm in full agreement that they have gotten off to a slow start but it seems to me that this is changing.
> 
> See above - wall street had no hand, act or part in crypto up until now-ish.
> 
> 
> Have futures volumes been low up until now? *Definitely*. Beyond that we'll disagree as from what I'm seeing, t*he way is being paved for greater institutional access and involvement.* Futures can be physically deliverable also - as in the offering from Bakkt. A lot was expected of them initially but they *under-whelmed*. Despite that - just like CME bitcoin futures, they've seen a considerable uptick in volumes more recently.



This is the crux of it for me, and where there will never be an agreement. The facts suggest there is no uptick, but in your mind that is just temporary and everything points towards mass adoption. The simple point is, we have been able to buy BTC as individuals for years, if institutions, hedge funds or whatever other large investors wanted to do it there has been nothing stopping them. The simple fact is the demand is not there, and that is what the data shows. How many funds have you got on record for buying it out of the thousands in operation globally? There are probably more funds buying art as investments than BTC.




tecate said:


> That's completely disingenuous as  a question. You don't go from A to D without passing through stages B and C. You know full well that with something like this, there is a process to go through to get volume up to a sufficient level. In the meantime, if people offer add-on services that implicate bitcoin, what's wrong with that? People make up their own mind as to what they use. Practically everyone I know that first came into contact with crypto bought a micro quantity at a bad rate. As they educated themselves, they've progressed to smarter transactions implicating crypto. There's no reason that ordinary people in the context you mention can't do the same thing.



Why do you continue to try and change the subject? Can't you answer the question? Take a step back and ask yourself that question without thinking about the technology.


For reference, the below is your initial post on Fidelity in which you present it as a trusted opinion. I was not referencing your flip flop when queried on the credibility of Fidelity in this area. If not you should edit the post.



tecate said:


> Here's a little snippet from a  published by Fidelity Investments last week:
> 
> _"Another consequence of bitcoin entering a more mature and steady stage of its life cycle is that we expect its volatility to decline in tandem, resulting in continued favorable risk-adjusted returns."_




After all of this, I am not sure what your actual stance on BTC is, and is why I keep (in my opinion) referencing you as having blind faith. Or perhaps it is more like, you actively search out articles to support your view, but I am not sure what that is? Is it BTC is going to be a store of value that is treated as an alternative asset similar to gold? Is it going to be a currency for transferring funds for the unbanked around the world? Is it a currency that will be adopted into our daily lives? 

A lot of your posts often cite future developments (see above "the path is paved"). So putting you on the spot, what is your 10 year prediction?


----------



## Duke of Marmalade

MaxGordon said:


> I don't believe you, Watson - nobody can be so unaware or in that much denial.
> 
> Also, I note, how you've avoided the specific question in my last post. Now, there's a surprise!
> 
> You really have some front!


6 mins for the knee to jerk, I guess she was earlier tied up on the Eastern Front.
What makes me sense that you are stalking me Max?  Yes, I remember the Watson reference but believe me my comments on Tesla were extremely peripheral.  You seem to have much better recall of my AAM contributions than I do  (I wonder should I be flattered).
Really, I can't remember when I read the White Paper, what "gotcha" are you plotting there?


----------



## WolfeTone

Duke of Marmalade said:


> Ah Wolfie let's dig a rabbit hole.



For sure, so why resusicitate the 'intrinsic value' debate?

Quite simply, money and value are just an efficient means of communication. 
Up until now, that means of communication has broadly, but by no means exclusively, been controlled by central authorities like governments and banks. 
I suppose what bitcoin is saying, that as long as the digital age exists, the era of decentralised money has arrived. A means of communicating price and value without interference, permission or oversight from a central authority - that is its intrinsic value. What price anyone puts on that intrinsic value will be decided by the market.


----------



## tecate

Dublinbay12 said:


> Tecate, please show me one inaccurate comment I have made on Bitcoin during this discourse?


You've cleared the matter up for us already by confirming that you are not a proponent of bitcoin - so we're all good on that front, thank you.



Dublinbay12 said:


> You seem hamstrung on discrediting my position because you don't believe me to be a proponent in your eyes. I clarified my statement to see if you would move on, but no, you seem hellbent on rather than actually discussing my points to continually try to discredit them based on the fact I can't be a proponent. I guess that is why you admit that you can't embrace this discussion on a reasoned basis.


You just make my point for me with this stuff.



Dublinbay12 said:


> I was referring to academic papers and not what Duke has to say.


Yes....and this particular disagreement came about due to your view of my response to his Dukeness. There's your context.



Dublinbay12 said:


> This is the crux of it for me, and where there will never be an agreement. The facts suggest there is no uptick,


Did I just say that volumes have doubled over recent weeks or are you challenging that information?



Dublinbay12 said:


> The simple point is, we have been able to buy BTC as individuals for years,


Time and time again, we see so many fall at this hurdle. Given the complexity involved, the progress of bitcoin has been quite remarkable. However, you - just like the other bitcoin-skeptics here are 200% confident that as it hasn't hit mass market then it wont hit mass market. I'm quite happy to accept that bitcoin could ultimately not match my expectations but that's flawed logic from you. Particularly so when the technology and its eco-system are still in development.



Dublinbay12 said:


> if institutions, hedge funds or whatever other large investors wanted to do it there has been nothing stopping them.


As I alluded to in my last post, that's not the case at all.



Dublinbay12 said:


> How many funds have you got on record for buying it out of the thousands in operation globally?


And because they haven't, your logic is that they won't? That's flawed logic. Whilst we're on the subject, this whole conversation started with you taking me to task for posting info with regard to first movers along these corporate/institutional lines. If we're both interested to know if there will be take-up from that side of the house, isn't it entirely relevant to acknowledge those moves.



Dublinbay12 said:


> Why do you continue to try and change the subject? Can't you answer the question? Take a step back and ask yourself that question without thinking about the technology.


We've been over this. I'm sorry that its not the answer to the question that you were expecting/hoping for. It is my answer however - so please respect it.



Dublinbay12 said:


> The below is your initial post on Fidelity in which you present it as a trusted opinion. If not you should edit the post.


It is - and we've discussed what followed. EVERYONE has a certain bias - and that has to be borne in mind. That doesn't suddenly mean that everything that they produce is a lie. They are the worlds leading asset manager afterall. Secondly, on this specific point (that their report picks up on) - I can easily go out and find a wealth of respected opinions that take the same position i.e. volatility will dissipate as we progress.  Think about it. The overall market for any asset expands exponentially - then of course volatility levels go down with that. It's entirely intuitive.


----------



## Duke of Marmalade

WolfeTone said:


> For sure, so why resusicitate the 'intrinsic value' debate?
> 
> Quite simply, money and value are just an efficient means of communication.
> Up until now, that means of communication has broadly, but by no means exclusively, been controlled by central authorities like governments and banks.
> I suppose what bitcoin is saying, that as long as the digital age exists, the era of decentralised money has arrived. A means of communicating price and value without interference, permission or oversight from a central authority - that is its intrinsic value. What price anyone puts on that intrinsic value will be decided by the market.


Only kidding about the rabbit hole, you're already down 6 feet 
I was explaining why I found "the dogs that are not barking" very telling in the bitcoin debate; those dogs are the mainstream economists and by and large institutional investors.  I didn't really want to open up the intrinsic value debate, just citing it as an example where mainstream economists reject bitcoin.  You may disagree with mainstream economists but that is a separate point of rabbit hole propensity.


----------



## tecate

WolfeTone said:


> What price anyone puts on that intrinsic value will be decided by the market.


But his Dukeness doesn't agree that the market should have the audacity not to share his world (and political) view on this.


----------



## MaxGordon

All that happened is that you said something that was strange and I picked you up on it. Last worders can't hack being tooked up on anything so what should have been an unique post by me took several. My sin, if one exists, is not stalking but that other st word....STUBBORNESS! It just takes yonks for you to acknowledge certain things - and I am reticent to give last worders, well, the last word. Reassuringly, at least you did come out swinging a little in your last post - there's something disconcerting when folk don't revert to type.

Oh, I don't for a second believe that you don't broadly remember when you read the white paper. Nobody can have such a poor memory and in any event the search function here is quite good. The "gotcha" then is obvious - but I feel disinclined to waste anymore time explaining what you already know. Nobody can have such poor powers of deduction and especially not my dear Watson.

Anyways, I'll leave it at that. I don't have Tecate's patience or resilience. I'll leave the last word to you - after all, that's all you really want in all of this, isn't it?


----------



## tecate

tecate said:


> Reports out yesterday suggest that Paypal/Venmo are likely to add crypto to their respective platforms.  It remains the matter of speculation but there are some strong indicators - including job postings for a 'Technical Lead - Crypto Engineer' and a Blockchain Research Engineer.  What gives it further credence is the traction that rival CashApp has achieved by offering the ability to buy/sell Bitcoin.  That's not likely to have gone unnoticed by Paypal.
> 
> Paypal claim 305 million active users and 54 million active users via Venmo.


Getting back to relevant milestones in the sector...Paypal has now confirmed that it's adding crypto.

LINK


----------



## WolfeTone

Duke of Marmalade said:


> I was explaining why I found "the dogs that are not barking" very telling in the bitcoin debate; those dogs are the mainstream economists and by and large institutional investors.



I don't really want to be repeating myself but



WolfeTone said:


> I can recall an almost complete absence of endorsement from mainstream economic thinking* [insert: & institutional investors]* for economic crash in 2008



I'm going to throw this out there,  I gather most if not all institutional investors are licensed and regulated by their respective central banks and governments? There may be some element of reluctance of wading into the relatively unknown, and also of stepping outside of the regulatory framework that oils their engines so to speak?

While bitcoin may be a market of €200bn it is relatively small fry compared to the levels of finance that are operating through the regulatory system. So is it reasonable that licensed, regulated, institutional investors are somewhat risk averse given bitcoins volatile history?  
That may be one reason. 

Other reasons could be that the views of institutional investors and economists are in line with your own views, albeit your own views are shaped by institutional investors and economists! 
Isn't there economic theory behind this type of behaviour?


----------



## DublinHead54

tecate said:


> You've cleared the matter up for us already by confirming that you are not a proponent of bitcoin - so we're all good on that front, thank you.
> 
> 
> You just make my point for me with this stuff.
> 
> 
> Yes....and this particular disagreement came about due to your view of my response to his Dukeness. There's your context.
> 
> 
> Did I just say that volumes have doubled over recent weeks or are you challenging that information?
> 
> 
> Time and time again, we see so many fall at this hurdle. Given the complexity involved, the progress of bitcoin has been quite remarkable. However, you - just like the other bitcoin-skeptics here are 200% confident that as it hasn't hit mass market then it wont hit mass market. I'm quite happy to accept that bitcoin could ultimately not match my expectations but that's flawed logic from you. Particularly so when the technology and its eco-system are still in development.
> 
> 
> As I alluded to in my last post, that's not the case at all.
> 
> 
> And because they haven't, your logic is that they won't? That's flawed logic. Whilst we're on the subject, this whole conversation started with you taking me to task for posting info with regard to first movers along these corporate/institutional lines. If we're both interested to know if there will be take-up from that side of the house, isn't it entirely relevant to acknowledge those moves.
> 
> 
> We've been over this. I'm sorry that its not the answer to the question that you were expecting/hoping for. It is my answer however - so please respect it.
> 
> It is - and we've discussed what followed. EVERYONE has a certain bias - and that has to be borne in mind. That doesn't suddenly mean that everything that they produce is a lie. They are the worlds leading asset manager afterall. Secondly, on this specific point (that their report picks up on) - I can easily go out and find a wealth of respected opinions that take the same position i.e. volatility will dissipate as we progress.  Think about it. The overall market for any asset expands exponentially - then of course volatility levels go down with that. It's entirely intuitive.



Yet again Tecate fails to engage in the actual topic, or actually answer any question posed. It is impossible to have a discussion with somebody who continues to not answer questions.


----------



## DublinHead54

tecate said:


> Getting back to relevant milestones in the sector...Paypal has now confirmed that it's adding crypto.
> 
> LINK



Before we launch into debate, what are your thoughts? The questions I would ask, who does this benefit? How does it make BTC more obtainable for the everyday person. This is a step in providing easier access to retail investors but is it actually helping the adoption of BTC? Quoting from the article before, I would assume that there will be some form of bid/ask spread when paying with BTC to reduce settlement risk for Paypal. This undoubtely will be the true to test to whether adoption of BTC will happen, so I am interested to see the outcome. 

_"Cryptocurrency payments on PayPal will be settled using fiat currencies, such as the U.S. dollar, meaning merchants will not receive payments in virtual coins, the company said."_

In the immediate shortterm as Tecate refers to me as a non proponent, I have just benefitted ~5% on this news. It is likely a good time to reduce exposure.


----------



## Duke of Marmalade

WolfeTone said:


> I don't really want to be repeating myself but
> 
> 
> 
> I'm going to throw this out there,  I gather most if not all institutional investors are licensed and regulated by their respective central banks and governments? There may be some element of reluctance of wading into the relatively unknown, and also of stepping outside of the regulatory framework that oils their engines so to speak?
> 
> While bitcoin may be a market of €200bn it is relatively small fry compared to the levels of finance that are operating through the regulatory system. So is it reasonable that licensed, regulated, institutional investors are somewhat risk averse given bitcoins volatile history?
> That may be one reason.
> 
> Other reasons could be that the views of institutional investors and economists are in line with your own views, albeit your own views are shaped by institutional investors and economists!
> Isn't there economic theory behind this type of behaviour?


_Wolfie_, those are valid points, though I think the failure of the economists/institutional investors to predict the economic crash is not a very valid argument.  There is a difference between predicting economic outcomes and validating an economic proposition.  But I think the general failure of the institutional apparatus (economists, bankers, investment firms etc.) illustrated so starkly by the crisis is a part explanation of why the bitcoin narrative has got traction with a disillusioned constituency.

The medical profession did not predict the COVID.  But when they agree on a vaccine I will accept their assurance despite that failing.  That's probably not a valid comparison either, but I thought I would throw it in.


----------



## tecate

Dublinbay12 said:


> Yet again Tecate fails to engage in the actual topic.


And once again you don't like the answer so this is the reaction we get from you.


----------



## DublinHead54

tecate said:


> And once again you don't like the answer so this os the reaction we get from you.



Tecate, there was no answer, I am left pondering your stance. It feels a little like groundhog day again and you have started a cycle of posting articles without reading and reflecting them. I hope you can provide your thoughts on the article you posted per my question in post 595, but I hold my breath.

As you are a self styled proponent of BTC, it would be good to see your take / prediction on this latest development. What area of BTC do you think it will benefit the most?


----------



## DazedInPontoon

Dublinbay12 said:


> How does it make BTC more obtainable for the everyday person. This is a step in providing easier access to retail investors but is it actually helping the adoption of BTC?
> ...
> This undoubtely will be the true to test to whether adoption of BTC will happen, so I am interested to see the outcome.


If you're defining 'actual adoption' as transactions like people buying coffee with crypto. That'll be the last step not the next one. Paypal won't make a difference. Bitcoin (or any current crypto) can't support that kind of adoption anyway as it will be hindered by the transaction limit. The lightning network or some other layer is necessary so that each individual transaction is not needed on the blockchain. This may happen in the future, but it's not close.

The adoption that is happening is people buying it as a store of value. This is a list of the public companies and other institutions that now own bitcoin https://bitcointreasuries.org/

It used to be an empty list, now it's a very small list, but they own 3.74% of the total supply. how far are we into institutional adoption? is this 3.75% the peak for these type of organizations?

As of today Saylor is already 60m in the green, on paper. I'm sure todays volatility is worrying him deeply.


----------



## tecate

Dublinbay12 said:


> Tecate, there was no answer, I am left pondering your stance.


I've answered and responded accordingly thereafter. As mentioned before, you don't like the answers that you're getting as they don't fit your world view. Maybe I should just let you write them for me.


Dublinbay12 said:


> I hope you can provide your thoughts on the article you posted per my question in post 595, but I hold my breath.


Keep your panties on - I'm getting to it. I do have the odd thing to take care of in between times.



Dublinbay12 said:


> What are your thoughts? The questions I would ask, who does this benefit? How does it make BTC more obtainable for the everyday person. This is a step in providing easier access to retail investors but is it actually helping the adoption of BTC?


My thoughts are that it's not a panacea (no one such move implicating crypto is). However, it's a building block that strengthens the emergence of crypto.
In the overall context, it is a further measure in legitimising crypto to the general public. Personally, I can't stand Paypal but that's neither here nor there. Paypal is trusted by 100s of millions of people worldwide. All that ordinary people know about crypto exchanges is that they believe them to be dodgy. The largest crypto exchange has around 35 million customers. Paypal has 350 million active account holders. KYC/AML has been a major point of friction in adoption. That changes here as it allows a whole new swathe of ordinary people to have direct access to crypto without lifting a finger.


Dublinbay12 said:


> I would assume that there will be some form of bid/ask spread when paying with BTC to reduce settlement risk for Paypal.


I expect Paypal to be true to form and that the costs will be Paypal-esque. However, that makes no difference. If you talk to many people that have gotten into this space about the first means by which they obtained crypto, chances are they will tell you that it was a bad deal (in terms of fees/commissions, etc.). They went on to use crypto more and became more discerning in how they bought and sold it. This represents an on/off ramp - and an opportunity to on-board new people into the crypto ecosystem.
Imagine if someone offered to sell you something online - and their deal was so much cheaper than the alternative. However, they insist on crypto payment. If everything you heard about crypto is negative and you've decided you don't need it, you don't understand it, nevermind start to think where or how you'd buy it (or go through KYC/AML to open an account just for this one trade) - you're going to say screw this and run with the more expensive alternative. If you have a paypal account - and you already have access - you trust paypal as you've been with them for years - then its probably still a pain in the ass as you're not used to it - but you'll do it to get the cheaper price.


Dublinbay12 said:


> What area of BTC do you think it will benefit the most?


So as per the explanation above - this is retail-related.


Dublinbay12 said:


> is it actually helping the adoption of BTC?


It's not a panacea in and of itself but it is a very large and significant brick in the wall.



Dublinbay12 said:


> In the immediate shortterm as Tecate refers to me as a non proponent, I have just benefitted ~5% on this news. It is likely a good time to reduce exposure.


I've already explained this to you. I have come across plenty that trade btc/crypto while sledging it every day of the week. If you're trading crypto and that works for you - good for you.  But that certainly doesn't make you a 'proponent' of bitcoin.
But then feel free to explain yourself a bit more on that if you wish. I invited you to do that previously. Do you believe that there's anything tangible to invest in (as I've yet to hear a single positive statement on btc from you) or you're smarter than everyone else and you feel you're benefiting from all the stupid people that have put some $ in crypto?



Dublinbay12 said:


> This undoubtedly will be the true to test to whether adoption of BTC will happen, so I am interested to see the outcome.


I didn't need this validation - but it's something that I think is useful to point out to you. With this statement, you're saying that this news has potential significance (which could go either way). It's significant - and that's why I posted about the initial (unconfimed) report to this effect some weeks ago. It's in the same vein, I followed up with other such significant milestones.


Lastly, you asked me to describe what my thoughts were as to how I saw the space play out with regard to bitcoin - going forward. I gave you my best guess (my current guess based on an opinion that is always open to adjustment). I provided you with my thoughts. Given that you've worked on blockchain-related projects, I'd be curious to hear your own view (whether that's about BTC, CBDCs or crypto/blockchain generally). How do you see things developing?


----------



## DublinHead54

DazedInPontoon said:


> If you're defining 'actual adoption' as transactions like people buying coffee with crypto. That'll be the last step not the next one. Paypal won't make a difference. Bitcoin (or any current crypto) can't support that kind of adoption anyway as it will be hindered by the transaction limit. The lightning network or some other layer is necessary so that each individual transaction is not needed on the blockchain. This may happen in the future, but it's not close.
> 
> The adoption that is happening is people buying it as a store of value. This is a list of the public companies and other institutions that now own bitcoin https://bitcointreasuries.org/
> 
> It used to be an empty list, now it's a very small list, but they own 3.74% of the total supply. how far are we into institutional adoption? is this 3.75% the peak for these type of organizations?
> 
> As of today Saylor is already 60m in the green, on paper. I'm sure todays volatility is worrying him deeply.



The paypal move as I see it has two benefits, the first it helps legitimize BTC, and it benefits existing holders, who now have more options to buy physical goods with BTC (tax benefits). 

The use as a store of value is much more interesting, and  if ~30 companies can hold 3.74% of BTC and with further institutional adoption, liquidity will dry up. In turn this will grow the non deliverable futures market. If we compare this to Gold, the reserves are held mostly by governments. So we would have a change with BTC reserves held by individuals (Corporations) which creates an entire different set of economics.

I am not really sure what this does for price stability, if most of the BTCs in the world are held in wallets and not circulating.


----------



## WolfeTone

Duke of Marmalade said:


> There is a difference between predicting economic outcomes and validating an economic proposition.



Of course, and I wouldn't be so mean-spirited as to expect any economist to predict the day and time of the crash commencing. But the economic proposition of a crash was at least two years, if not more, identifiable in the emergence of a property bubble fueled by over-extending credit. Those that gave warnings were dismissed, excluded from the mainstream.
All the information that was needed was readily available to hand, and let's face it, in mainstream economics and finance, no-one shouted stop!

That aside, comparisons between medics and economists, covid and btc may not be so far apart

- nobody predicted Covid19
- nobody predicted BTC
- Covid numbers are volatile
- BTC price is volatile
- We are waiting for a promised vaccine for Covid
- We are waiting for a promised return to zero for BTC


----------



## DazedInPontoon

Dublinbay12 said:


> The use as a store of value is much more interesting, and  if ~30 companies can hold 3.74% of BTC and with further institutional adoption, liquidity will dry up.


That may be an understatement. since less than 12% of total supply now remains to be mined, and at a rate of less than 1.8% of per year from here onwards.



Dublinbay12 said:


> In turn this will grow the non deliverable futures market.



Maybe, though it's a lot easier to take delivery of BTC than gold, so a much higher proportion of investors may choose to do so, especially if they're buying bitcoin to hedge against systemic problems with paper trading markets.



Dublinbay12 said:


> If we compare this to Gold, the reserves are held mostly by governments. So we would have a change with BTC reserves held by individuals (Corporations) which creates an entire different set of economics.


Speaking of which, I guess the list of governments holding reserves in bitcoin is currently an empty list, will it be become a small list any time soon?



Dublinbay12 said:


> I am not really sure what this does for price stability, if most of the BTCs in the world are held in wallets and not circulating.


Personally I think it will be absolutely terrible for stability, as bitcoin is propelled to the moon with this as the catalyst in the next year or so.


----------



## DublinHead54

tecate said:


> Do you believe that there's anything tangible to invest in (as I've yet to hear a single positive statement on btc from you) or you're smarter than everyone else and you feel you're benefiting from all the stupid people that have put some $ in crypto?



In a fledgling market like cryptocurrency, there are opportunities for arbitrage, you rightly point out people get more discerning and savvy as they use it. The exchanges and trading platforms just aren't as advanced or regulated as financial markets, so as somebody who has worked in financial markets for 20 years, I consider myself savvy. 




tecate said:


> Lastly, you asked me to describe what my thoughts were as to how I saw the space play out with regard to bitcoin - going forward. I gave you my best guess (my current guess based on an opinion that is always open to adjustment). I provided you with my thoughts. Given that you've worked on blockchain-related projects, I'd be curious to hear your own view (whether that's about BTC, CBDCs or crypto/blockchain generally).



Apologies, I must have missed that, so how do you see it play out? 

As I have mentioned, the political, economic and cultural issues are as important as the technology itself, so there will be varying adoption across the globe. My first point is I don't believe BTC will be used as a currency, it will become some form of digital store of value, whether that store of value becomes $1 or $50k, I have no clue. 

In terms of Blockchain Technology, there are lots of interesting Proof of Concepts being proposed, but currently we aren't seeing a whole lot of adoption, I think the cost of implementation for corporations will out weigh the benefits. 

The most interesting area is CBDC and Decentralized Finance. Central Banks have the biggest impact on us day to day, so they have the power to force adoption of digital assets (most money is already digital). I am excited by the concept of programmable money, for example, the stimulus checks for Covid in the US could have been delivered digitally and programmed to be only spent in certain areas of the economy. This gives another tool in the monetary tool box for Central Banks, and also goes towards moving towards a platform economy. It asks important questions around the role of Financial Intermediaries etc. 

DeFI, is probably the coolest idea around at the minute and we are seeing lots of people benefit from it, I am working on a project currently in DeFi.


----------



## DublinHead54

DazedInPontoon said:


> Personally I think it will be absolutely terrible for stability, as bitcoin is propelled to the moon with this as the catalyst in the next year or so.



HODL


----------



## Leo

Dublinbay12 said:


> In terms of Blockchain Technology, there are lots of interesting Proof of Concepts being proposed, but currently we aren't seeing a whole lot of adoption, I think the cost of implementation for corporations will out weigh the benefits.



Indeed, there was a huge drop in venture capital funding for blockchain projects over the last year or two as the early hype and enthusiasm didn't bear fruit. There was over $4B invested via VCs in 2018, but very little actually making it to market.


----------



## Gus1970

Leo said:


> Indeed, there was a huge drop in venture capital funding for blockchain projects over the last year or two as the early hype and enthusiasm didn't bear fruit. There was over $4B invested via VCs in 2018, but very little actually making it to market.


Could your share your source please?
Thank you


----------



## Leo

Gus1970 said:


> Could your share your source please?
> Thank you



There are a number of platforms that report on VC investment, CBInsight make some of that available without subscription and do regular features on the blockchain space.


----------



## Gus1970

Leo said:


> There are a number of platforms that report on VC investment, CBInsight make some of that available without subscription and do regular features on the blockchain space.



Thank you Leo


----------



## tecate

Sept. 2017: JPMorgan's Jaime Dimon - _"Bitcoin is a fraud and will blow up"._
Feb. 2019: JPMorgan launches its own stablecoin.
23 Oct. 2020: JPMorgan in a note to investors - _"The potential long-term upside for bitcoin is considerable as it competes more intensely with gold as an 'alternative' currency we believe, given that Millenials would become over time a more important component of investors' universe"._


----------



## MaxGordon

Good one, Tecate

Of course we need to bear in mind that back on 2017 the head of cryptos at JPM was just starting out on his CFA journey and is now fully qualified! No point in getting edumecated if your ideas ain't going to change!


----------



## DublinHead54

tecate said:


> Sept. 2017: JPMorgan's Jaime Dimon - _"Bitcoin is a fraud and will blow up"._
> Feb. 2019: JPMorgan launches its own stablecoin.
> 23 Oct. 2020: JPMorgan in a note to investors - _"The potential long-term upside for bitcoin is considerable as it competes more intensely with gold as an 'alternative' currency we believe, given that Millenials would become over time a more important component of investors' universe"._



Have you got the actual report? Interested in reading.


----------



## tecate

Dublinbay12 said:


> Have you got the actual report? Interested in reading.


As you can see, there's a link to the article by Business Insider (which isn't a crypto publication). There's no sign of the note itself. As something that wasn't destined for broader dispersal, perhaps they can't publish a copy of the actual note itself.

EDIT - This seems to be it -> here.

A couple of other take-aways:

_"The market cap of bitcoin would have to rise 10 times from here to match the total private sector investment to gold via ETFs or bars and coins".

"We believe the market value of cryptocurrencies could eventually rise beyond what could be justified by only valuing them as a store of wealth. Cryptocurrencies derive value not only because they serve as stores of wealth but also due to their utility as means of payment."_

Back in 2017, JPMorgan CEO Jamie Dimon said that he'd _"...fire a JPM trader in a second who traded _[bitcoin]_. Its against the rules, its stupid, its dangerous"._


----------



## DublinHead54

tecate said:


> As you can see, there's a link to the article by Business Insider (which isn't a crypto publication). There's no sign of the note itself. As something that wasn't destined for broader dispersal, perhaps they can't publish a copy of the actual note itself.
> 
> EDIT - This seems to be it -> here.
> 
> A couple of other take-aways:
> 
> _"The market cap of bitcoin would have to rise 10 times from here to match the total private sector investment to gold via ETFs or bars and coins".
> 
> "We believe the market value of cryptocurrencies could eventually rise beyond what could be justified by only valuing them as a store of wealth. Cryptocurrencies derive value not only because they serve as stores of wealth but also due to their utility as means of payment."_



That's just an extract, this was a lengthier research piece. Let me see if I can get a copy of it.

It briefly mentions one of my main discussion points, gold reserves are held by central banks whereas bitcoin large holdings are held privately. I'm hopeful Panigirtzoglou will explore this further. 

Interesting that he has called out millennials as one of the reasons for the potential long term. This is one of the first articles I've seen consider a social aspect.


----------



## tecate

Dublinbay12 said:


> Interesting that he has called out millennials as one of the reasons for the potential long term. This is one of the first articles I've seen consider a social aspect.


It is interesting - and it seems to make sense. It's difficult for many to get past the idea of a digital currency rather than a physical currency. From millennial down, that demographic is going to be much more comfortable with and accepting of digital currencies. JPMorgan's Panigirtzoglou referred to precisely that notion back in August -> Bloomberg: 'Older Investors Go for Gold, Younger Ones Bitcoin' .


----------



## Brendan Burgess

tecate said:


> From millenial down, that demographic is going to be much more comfortable with and accepting of digital currencies.



As indeed they were with the dot.com boom and any other fashionable hot air.

You will just have to get burnt to realise that this is all nonsense.  

Brendan


----------



## tecate

Brendan Burgess said:


> As indeed they were with the dot.com boom and any other fashionable hot air.


Many got burnt due to over-exuberance in the dot com crash. However, in citing that example Brendan, you've never acknowledged the incredible technology that came out of it or the gains made by those that had backed (or went on to back) technological behemoths such as google, etc.



Brendan Burgess said:


> You will just have to get burnt to realise that this is all nonsense.


I don't have any issue whatsoever with the suggestion of a need for caution. What I do take issue with is the consistent claim that there isn't one single tangible advantage to decentralised cryptocurrency. That doesn't make for a reasonable interpretation of it to my mind.


----------



## MaxGordon

What's nonsense is in anyway attributing the .com bubble to millennials - do you honestly understand the meaning of the term?


----------



## Brendan Burgess

Max
I was responding to tecate's use of the term.

The point is that it's the same age group who chase the latest investment fad and get burnt badly.


Brendan


----------



## Brendan Burgess

tecate said:


> Many got burnt due to over-exuberance in the dot com crash.



tecate

The common feature is the abandonment of rationality.  

Abandoning any of the rules of finance or investment analysis. 

And a bit of over-exuberance as well. 

I am sure that I have suggested it before but read https://en.wikipedia.org/wiki/Extraordinary_Popular_Delusions_and_the_Madness_of_Crowds

It's shocking for me to be able to sit here watching these things repeating themselves.  The difference now is that we have a very good contemporaneous record of it.  You will be able to look back in n years and say "How could I have been so stupid? I was a millionaire in Bitcoin and I could have cashed out!"

Brendan


----------



## tecate

Brendan Burgess said:


> The common feature is the abandonment of rationality.
> And a bit of over-exuberance as well.
> I am sure that I have suggested it before but read https://en.wikipedia.org/wiki/Extraordinary_Popular_Delusions_and_the_Madness_of_Crowds


This isn't in any way exclusive to crypto/blockchain. The investment aspect of every new technology goes through a hype cycle. There's no disagreement there.



Brendan Burgess said:


> Abandoning any of the rules of finance or investment analysis.


That's a discussion that we've already had - the normal rules don't apply OR they're the normal rules as they apply to the determination of the fair price of gold.



Brendan Burgess said:


> It's shocking for me to be able to sit here watching these things repeating themselves.  The difference now is that we have a very good contemporaneous record of it.  You will be able to look back in n years and say "How could I have been so stupid? I was a millionaire in Bitcoin and I could have cashed out!"


I don't maintain complete exposure to crypto. However, as it stands today, I also don't share the same thesis as you do (I.e. bitcoin will go to zero -it's just a matter of when). My belief is that we will see further 80% corrections as it progresses. 2017/18 wasn't the first such occasion. However, it appears to me that we're also heading higher.
I'm not in disagreement with the need for caution. For that reason, I've stepped out of the market on a number of occasions. However, after the 2017/18 surge and correction, had I ran with the opinions expressed here on AAM, I would be down considerably on my current position.

I don't have any problem with an abundance of caution. However, as previously stated you fail to acknowledge that there is anything tangible in decentralised crypto - and that's not credible to me. Perhaps you simply believe there's absolutely nothing there or perhaps you don't want to admit it in case it would be seen as an endorsement. The very same with your dot com boom example. Yes, plenty got their fingers very badly burnt. However, there were also those that found considerable upside - with the very same tech/projects that arose from that crash. Why can't you acknowledge that?


----------



## Brendan Burgess

You are repeating the same arguments. 

I am sure that I have recognised that there is some application for crytpto just as there is for paper cheques. It does not mean that the cheques have any intrinsic value.  

And of course people made money investing in tech shares.   I have not disputed that.

I don't know if you were around then. But a share split could result in the share price increasing. Complete madness. The same with bitcoin.  They increase the supply and some of the enthusiasts twist that around to say that the supply is reduced. 

It's the exact same lack of reason.   

Greed makes people stupid. 

But if you see an 80% fall coming, then fair play to you. I see a 100% fall coming. 

Brendan


----------



## tecate

Brendan Burgess said:


> I am sure that I have recognised that there is some application for crytpto just as there is for paper cheques. It does not mean that the cheques have any intrinsic value.


I don't think you are in any way understanding the proposition at hand. We've been over the intrinsic value debate so I won't labour it here.



Brendan Burgess said:


> And of course people made money investing in tech shares.   I have not disputed that.


So the point is that they weren't wrong in terms of the proposition. They were wrong in terms of over-exuberance (or at least a proportion of them were).



Brendan Burgess said:


> I don't know if you were around then. But a share split could result in the share price increasing. Complete madness. The same with bitcoin.  They increase the supply and some of the enthusiasts twist that around to say that the supply is reduced.


We've had that discussion - so there's little point in re-opening it other than to say that I disagree. Halving the mining reward isn't increasing the supply.



Brendan Burgess said:


> But if you see an 80% fall coming, then fair play to you. I see a 100% fall coming.


I do - against the background of a fixed supply asset with an overall upward trajectory.

Do you see this advisory from JPMorgan then as treachery? Is this their honest appraisal or a ruse to suck in the feeble of mind such as myself?


----------



## DublinHead54

Tecate,

I would treat the JPM note in context rather than a fact. I am not disagreeing with the opinion, I'll wait until I get the full note to formulate that. What I am pointing out is that every bank has a research team, and those research articles present an opinion on the topic most commonly in equities with a Buy / Sell / Hold rating. Not every prediction becomes a reality and they are often wrong. 

What is more important than the content of the note is in support of your argument that Bitcoin is becoming more institutionalized and the JPM note is a recognition of the further legitimizing Bitcoin as a store of value for Wall Street.


----------



## tecate

Dublinbay12 said:


> I would treat the JPM note in context rather than a fact.


Absolutely - in this space above any other, there's a need for a healthy cynicism. 



Dublinbay12 said:


> What I am pointing out is that every bank has a research team, and those research articles present an opinion on the topic most commonly in equities with a Buy / Sell / Hold rating. Not every prediction becomes a reality and they are often wrong.


Agreed.


Dublinbay12 said:


> What is more important than the content of the note is in support of your argument that Bitcoin is becoming more institutionalized and the JPM note is a recognition of the further legitimizing Bitcoin as a store of value for Wall Street.


If this was an isolated instance, then I'd be inclined to be more wary of the intent behind it. However, there seems to be an emerging consistent view along the lines of their note.


----------



## Brendan Burgess

tecate said:


> Do you see this advisory from JPMorgan then as treachery? Is this their honest appraisal or a ruse to suck in the feeble of mind such as myself?



Why would I see it as treachery? That is a bizarre comment. Does it relate to something I said? I am mystified by it.

The analyst who wrote that note is  clearly wrong.  And they are often wrong. 

Brendan


----------



## tecate

Brendan Burgess said:


> Why would I see it as treachery?


I was just curious if you found the current JPMorgan analysis to be disingenuous or otherwise - simple as that.


Brendan Burgess said:


> The analyst who wrote that note is clearly wrong. And they are often wrong.


Well either you or they are wrong.


----------



## Brendan Burgess

tecate said:


> if you found the current JPMorgan analysis to be disingenuous or otherwise



You will find very few conspiracy theories in my 41,818 posts. 

Why look for disingenuity when incompetence is so widespread? 

Brendan


----------



## tecate

Brendan Burgess said:


> You will find very few conspiracy theories in my 41,818 posts.


Nor in mine.



Brendan Burgess said:


> Why look for disingenuity when incompetence is so widespread?


Are JPMorgan incompetent in this instance?


----------



## WolfeTone

Speaking of the Madness of Crowds, surely to keep repeating the same BOHA argument over and over, in the face of bitcoin price doubling since this thread began, falls into that category?


----------



## Brendan Burgess

Wolfie 

Have you read the book? 

It's about how crowds get deluded. You and the rest are deluded into thinking that a bag of hot air is worth something.

This delusion can persist for a surprisingly long time.  

Brendan


----------



## WolfeTone

Brendan Burgess said:


> You and the rest are deluded into thinking that a bag of hot air is worth something.



 Thanks Brendan, I have given your opinion due consideration but at this juncture in time I will have to respectfully disagree.


----------



## tecate

Today's u-turn example.

November 2017: CEO of S.E. Asia's largest bank (DBS) - "We see bitcoin as a bit of a ponzi scheme."
27 Oct 2020: "Singapore's biggest bank (DBS) is launching a crypto exchange."


----------



## Gus1970

Brendan Burgess said:


> Max
> I was responding to tecate's use of the term.
> 
> The point is that it's the same age group who chase the latest investment fad and get burnt badly.
> 
> 
> Brendan




Talking of getting burned, the generations that chased property, stocks, commodities, etc got burned repeatedly, once every number of years. 

So far in crypto, only the people that bought from september to november 2017 got burned, maybe BOHA is the way to go then...


----------



## Gus1970

Brendan Burgess said:


> Wolfie
> 
> Have you read the book?
> 
> It's about how crowds get deluded. You and the rest are deluded into thinking that a bag of hot air is worth something.
> 
> This delusion can persist for a surprisingly long time.
> 
> Brendan



Did it ever cross your mind for a split second that the deluded crowds might include you?

I’m not saying you are, but it is still a possibility, isn’t it?


----------



## Brendan Burgess

Gus1970 said:


> the generations that chased property, stocks, commodities,



Hi Gus

These items all have value.  From time to time they are overvalued and so people who invest in them might see them fall, but they usually recover. 

But tulips, ponzi schemes, and Bitcoin have no value. It's not a question of well they are worth x but the overenthusiasm prices them at 2x.  Bitcoin is a sham which is worth nothing. 

Brendan


----------



## tecate

DazedInPontoon said:


> This huge MicroStrategy  buy-in is wild. I actually think the podcast he did here https://www.youtube.com/watch?v=JibXLTDaj50&ab_channel=StephanLivera is better than the one tecate linked. It's more to the point and he's goes into more detail on some of the aspects.


According to its earnings call earlier today, MicroStrategy plans on buying more bitcoin with excess cash as the company goes forward.


----------



## WolfeTone

Brendan Burgess said:


> These items all have value. From time to time they are overvalued and so people who invest in them might see them fall, but they usually recover.



You are being disingenuous here Brendan. Yes, the prices of these items tend to recover over time, but not necessarily the people who got burnt. I don't have figures to hand but I suspect there is a correlation between asset bubble crashes and suicide, mental illness, unemployment, bankruptcies, homelessness etc. 

Btw, tulips do have value, that is why there is a market for them.

Tulips


----------



## Brendan Burgess

WolfeTone said:


> Yes, the prices of these items tend to recover over time, but not necessarily the people who got burnt.



Fully agree with you.  So not sure why you are saying I am disingenuous. 

Many people who bought Bitcoin and who will sell out before it crashes to zero, will make money on it. That does not mean that it is not a bag of hot air. 

By telling you that it will crash to zero does not mean that everyone who ever bought it will lose money. 

Brendan


----------



## DublinHead54

tecate said:


> According to its earnings call earlier today, MicroStrategy plans on buying more bitcoin with excess cash as the company goes forward.


 *subject to market conditions and business needs. They also note that they will run the business day to day with Cash. 

It will be interesting to see if they sell any if the price continues to rise, they are currently sitting on a ~22% profit.


----------



## WolfeTone

Brendan Burgess said:


> So not sure why you are saying I am disingenuous.



Well, you are making the distinction that assets such a property and stocks tend to recover over time, but for bitcoin that is not the case.
However, bitcoin price is at €11,000+ having crashed to less than €3,000 after its all time high in 2017.

Bitcoin is showing very similar characteristics to any other asset price recovery, unlike tulips. There is no dispute, the market price for bitcoin today is €11,631.

Until some new information emerges, or some other technological development, or a fundamental flaw emerges (_BOHA_ has not resonated with the market despite the views of some revered economists) that returns bitcoin to zero, then the market is saying that the value of bitcoin today is €11,631. The market cannot be wrong, can it?


----------



## tecate

Dublinbay12 said:


> It will be interesting to see if they sell any if the price continues to rise, they are currently sitting on a ~22% profit.


Indeed, it will. He's just stated that he owns $200 million worth of bitcoin personally so he'll have that decision to make personally also.
In an interview with Raoul Pal last week, he said this ->

_“This is not a speculation, nor a hedge. It is a deliberate corporate strategy to adopt the Bitcoin Standard.” _

@WolfeTone : Hardly anyone runs with the Tulip analogy anymore. It's been well and truly outed. i.e. Tulips don't have any of the universally accepted characteristics of what makes for either a good store of value or a means of exchange. Bitcoin on the other hand does.


----------



## Brendan Burgess

WolfeTone said:


> Well, you are making the distinction that assets such a property and stocks tend to recover over time, but for bitcoin that is not the case.



Hi Wolfie

You are saying that I am wrong.  I don't mind you saying that.

 But by accusing me of being disingenuous you are saying that I am trying to deceive.  I do mind you saying that.

Brendan


----------



## WolfeTone

Brendan Burgess said:


> But by accusing me of being disingenuous you are saying that I am trying to deceive



Ok, if that is your interpretation of my comment then I retract as that is not my intention.

The information available to me, re bitcoin price, is the same information available to anyone. It is clear that the price trajectory/behaviour reflects more typically the price trajectory/behaviour of property and stocks assets, and not tulips and/or _boha. _Insofar as any of them are part of a speculative bubble that bursts, then subsequently recovers_. _

This information is available for everyone to see and it is, in my opinion, disingenuous of anyone who has this information to knowingly deny it.

Bitcoin may return to zero, one day I sure it will. But for now, and for the forseeable future it has value and that value is reflected in its market price.


----------



## Brendan Burgess

WolfeTone said:


> if that is your interpretation of my comment then I retract as that is not my intention.



It is not my interpretation. It is the meaning of the word. 

But thanks for retracting it.

Brendan


----------



## WolfeTone

tecate said:


> @WolfeTone : Hardly anyone runs with the Tulip analogy anymore. It's been well and truly outed. i.e. Tulips don't have any of the universally accepted characteristics of what makes for either a good store of value or a means of exchange. Bitcoin on the other hand does.



Correct. And once the tulip mania bubble burst, some 400yrs ago, it never inflated again....unlike bitcoin. The comparisons don't equate in any way shape or form.


----------



## Brendan Burgess

Hi Tecate

You are missing the point. 

If you look at bitcoin and Women Empowering Women, you would say that there is no comparison. 

But the comparison is a Get Rich Quick Scheme where the madness of crowds causes people to take leave of their normal rational senses.  From reading your posts, you are clearly an intelligent articulate person. But once you are in the crowd of Bitcoin , you loses your reasoning powers.  In many cases, this is accentuated by greed, although it doesn't seem to be in your case.

You will look back at this at some stage in the future, and say 

"How could I have been so stupid!?
How come I didn't realise that when something has no intrinsic value that I didn't realise it was worthless? 
How come I didn't realise that there was something wrong when I couldn't explain why it was worth  $100. Then I couldn't explain why it was worth $1,000. Then why I couldn't explain why it was worth $20,000.
OK, I was going through my anti-authority phase at the time, but how on earth did I think that something without any centralised control was worth anything?  And I thought that was a positive feature of it.
How come I bought into that nonsense that as they were making more, the supply was reducing? 
And I made a comparison between that bag of hot air and gold! 
What on earth was I thinking?"

And then in 20 years time, you will be posting on askaboutmoney warning people who are "investing" in the next bubble: "I got burnt badly by bitcoin. This scheme is a bag of hot air. Believe me. I know from hard experience". And the new wave of enthusiasts will be hitting you with all their crowd-think nonsense arguments. And maybe you will then be shorting whatever the new fad is.

Brendan


----------



## tecate

Brendan Burgess said:


> You are missing the point.


I disagree - and my first thought was to say that it's the opposite (i.e. you're the one missing the point) - but on further reflection, I have to say that given the extent of discussion on the subject over three years - you can't really be missing the point. Perhaps ignoring it would be more accurate.



Brendan Burgess said:


> If you look at bitcoin and Women Empowering Women, you would say that there is no comparison.
> But the comparison is a Get Rich Quick Scheme where the madness of crowds causes people to take leave of their normal rational senses.  From reading your posts, you are clearly an intelligent articulate person. But once you are in the crowd of Bitcoin , you loses your reasoning powers.  In many cases, this is accentuated by greed, although it doesn't seem to be in your case.


There are a few things we agree on so lets start there.
- Any new tech comes with a hype cycle (or multiple hype cycles) - and with that comes over-exuberance.
- There's money involved so there's greed involved. ( I won't claim to be immune from it - i'm not.  It's part of the human condition - albeit that the speculative aspect of bitcoin/crypto was not what first grabbed my interest/attention - and that other aspect still has my interest as I see a lot of societal good coming from this shift over the fullness of time).
- That greed can shift things away from the reasonable to the irrational.

Where we disagree is that whilst that goes on, it doesn't mean that there isn't something tangible at the heart of bitcoin/decentralised crypto. The very same with your dot com boom n' bust analogy. All of those people were not wrong at all. In fact they were proven very much right (about the tech). Some of them got it very wrong from an investment perspective. Others didn't. In terms of $ outcome, there would have been extremes on both ends (unless of course the investment was correctly sized - which is something that I've advocated for here with regard to bitcoin/crypto).

As regards your latest analogy (that its an out and out scam) - that's neither accurate nor equitable.
As regards 'reasoning powers', that's exactly what I was doing in this instance. i.e. Quite rightly, when you previously (and in the post above) start claiming that bitcoin has no more value/utility than ridiculous things (tulips, your poetry, toenails, etc., etc.), there's a very simple test for that. You respect central banking, right? Well some of them have cited the very same characteristics of what makes for a decent store of value. When I ask you to compare these nonsensical things to bitcoin in that context, you've refused to do that.  That doesn't make for a reasoned approach to this discussion and figuring this stuff out.
The reason you don't can only be that you know that the comparison is ridiculous.




Brendan Burgess said:


> You will look back at this at some stage in the future, and say
> "How could I have been so stupid!?


Even if bitcoin fails, I don't believe that would be my thought process. I'm capable of reaching my own conclusions, assessing risk and making a decision accordingly. Maybe I'll get it wrong. But then, as I mentioned to you, if an investment is sized appropriate to the risk, what of it (bearing in mind that the risk is asymmetric)?



Brendan Burgess said:


> How come I didn't realise that when something has no intrinsic value that I didn't realise it was worthless?


Because bitcoin implicates a different paradigm based on trustlessness. I'm pretty sure I've explained the rationale behind that a million times already.



Brendan Burgess said:


> How come I didn't realise that there was something wrong when I couldn't explain why it was worth  $100. Then I couldn't explain why it was worth $1,000. Then why I couldn't explain why it was worth $20,000.


Why is there no consistency in your claim here?  Why do you impose a different set of rules to bitcoin than to gold?  Why - in the course of that lengthy discussion - didn't you come clean and acknowledge that any difficulty that bitcoin faces in terms of valuation gold shares?  To not do so_ is_ disingenuous.
I've long since acknowledged that there is no neat formula for the valuation of cryptocurrencies as there is for equities. However, why single out bitcoin/crypto when you know well that gold presents with the exact same issue? That's in no way reasonable.



Brendan Burgess said:


> How come I bought into that nonsense that as they were making more, the supply was reducing?


You really do yourself a disservice with this in particular, Brendan. You can claim a lack of intrinsic value, we'll disagree but that's ok. Notwithstanding that, when the mining reward was cut in half earlier this year, that means a reduced supply.  When  the mining reward is cut in half once more in four years time, the supply of bitcoin will be cut once more.  This isn't rocket science.



Brendan Burgess said:


> And I made a comparison between that bag of hot air and gold!
> What on earth was I thinking?"


What I was thinking is that scarcity is a key characteristic of a good store of value. That's universally accepted - although you dispute it. And I'm not talking about that one characteristic  - I'm talking about how bitcoin scores against those characteristics across the board. How you can claim that scarcity isn't relevant when the vast majority of sovereign currencies have been destroyed through rampant money printing ...I have no words for that.



Brendan Burgess said:


> And then in 20 years time, you will be posting on askaboutmoney warning people who are "investing" in the next bubble: "I got burnt badly by bitcoin.


Had I not sized my investment to a level I was comfortable with, that's a possibility. Given that I have - and given that my thesis on bitcoin is under constant review, I don't think that will be the case.

Your warning for the necessity of an abundance of caution I welcome. Where I vehemently take you to task though is this notion that bitcoin doesn't bring anything to the table. That's just plain wrong.

Lastly, I did 'cash out' of crypto in January 2018 when I felt the market was irrational. After that point - had I listened to the advice being given here by yourself and others - I would have suffered a far from immodest opportunity cost.


----------



## DublinHead54

There are definitely parallels with the DotCom bubble. Pretty simply you can compare the rise of the ICOs as the same as the multitude of internet companies set up. 

The underlying technologies are different, the internet had external actors that supported/forced the adoption, they being the IBMs, Apples, Microsofts along with governments through their publically-funded broadband rollout schemes.


----------



## WolfeTone

Brendan Burgess said:


> And then in 20 years time



Is that the timeframe then? In 20yrs, bitcoin will have gone to zero?


----------



## Duke of Marmalade

Brendan Burgess said:


> Hi Tecate
> 
> You are missing the point.
> 
> If you look at bitcoin and Women Empowering Women, you would say that there is no comparison.
> 
> But the comparison is a Get Rich Quick Scheme where the madness of crowds causes people to take leave of their normal rational senses.  From reading your posts, you are clearly an intelligent articulate person. But once you are in the crowd of Bitcoin , you loses your reasoning powers.  In many cases, this is accentuated by greed, although it doesn't seem to be in your case.
> 
> You will look back at this at some stage in the future, and say
> 
> "How could I have been so stupid!?
> How come I didn't realise that when something has no intrinsic value that I didn't realise it was worthless?
> How come I didn't realise that there was something wrong when I couldn't explain why it was worth  $100. Then I couldn't explain why it was worth $1,000. Then why I couldn't explain why it was worth $20,000.
> OK, I was going through my anti-authority phase at the time, but how on earth did I think that something without any centralised control was worth anything?  And I thought that was a positive feature of it.
> How come I bought into that nonsense that as they were making more, the supply was reducing?
> And I made a comparison between that bag of hot air and gold!
> What on earth was I thinking?"
> 
> And then in 20 years time, you will be posting on askaboutmoney warning people who are "investing" in the next bubble: "I got burnt badly by bitcoin. This scheme is a bag of hot air. Believe me. I know from hard experience". And the new wave of enthusiasts will be hitting you with all their crowd-think nonsense arguments. And maybe you will then be shorting whatever the new fad is.
> 
> Brendan


_Boss _you could maybe do with a bit of humility.  JP Morgan were once convinced BOHA folk like you.  But now they have come a long way on their Digital Asset Journey (DAJ).
But @tecate has already drawn our attention to a research piece by Ria Bhutoria.  Ria is Director of Research at Fildelity Digital Assets. Fidelity is a *$7 million, million* outfit, you may be aware.  Ria has a Level II pass in CFA, so with respect a tad more qualified than your good self.
You predict a future price of zero is certain.  Ria, despite that impressive qualification and $7trn backing, has the humility to recognise that there can be no certainty.  She therefore gives a range of future possibilities ranging from a $500bn increase in market cap (capturing 1% of bond market) through a $670bn increase (5% of Alternative Assets market) to $1.3trn (10% of AA market).  That's an *increase *in price of $27,000, $36,000 and $72,000 respectively.
You will note an element of caution in these predictions, understandable in that in her own words she is addressing folk at different stages of their DAJ.  She could have used 10% of the bond market and got an increase in price of $270,000.  This is more in keeping with the predictions of mainstream bitcoin enthusiasts.
This is the beauty of bitcoin.  There is no way of putting a value on it which does not mean there is a way to put no value on it, as you seem to argue.  Any figure at all can be justified for its market cap, especially when its main claim is to be a store of value.  John Kelleher of Investopedia argues that in the end of the day its market cap must be related to its penetration as a global medium of exchange.  But this is oh so Satoshi.  Things have moved on, John is falling behind in his DAJ.


----------



## tecate

Let me address that long diatribe very simply - tell everyone what the fair value of gold is?
And before there's any suggestion to the contrary, it's entirely relevant to this discussion.


----------



## Duke of Marmalade

tecate said:


> Let me address that long diatribe very simply - tell everyone what the fair value of gold is?
> And before there's any suggestion to the contrary, it's entirely relevant to this discussion.


Ah dear, I don't get the usual line by line treatment.  Just a Trumpian dismissal.  Max was quick to show his appreciation of that, no surprises there.


----------



## tecate

Duke of Marmalade said:


> Ah dear, I don't get the usual line by line treatment.  Just a Trumpian dismissal.  Max was quick to show his appreciation of that, no surprises there.


I don't see a genuine interest in discussion based on that post your Dukeness. I  note the ongoing refusal to apply the same pricing standard to gold (because in that particular respect its in exactly the same position as bitcoin. Everyone can see that but the two of you refuse to acknowledge it).

As regards the constant sledging of anyone 'liking' a post you don't agree with, it provides an insight into your approach to this discussion and whats important to you in that regard. Now if only there was someone of higher unbiased mind to pull you up on stuff like that...


----------



## Duke of Marmalade

@Brendan Burgess
I suggest you drop the debate with @tecate as I have felt the need to do on so many occasions.  Nothing illustrates his/her obstinacy more than the debate on the meaning of the word "supply".  Clearly you are referring to supply as in the sense of the supply and demand price dynamic. Clearly then the whole existing ledger of bitcoins is what is relevant and that increases steadily until 2140.  @tecate twists this into a point about the irrelevant concept of the supply of *new* bitcoins.


----------



## tecate

His Dukeness cant fess up on the application of the very same pricing scenario for gold. Over to you @Brendan Burgess 

The $9 trillion gold industry is on tender-hooks until they get your insight on this - because as it stands right now, it seems they're using the exact same pricing model as the bitcoin market is. In which case - why isn't there any moral outrage here on AAM (as there is with bitcoin) at the lunacy of their 'evaluation' of the shiny metal???


----------



## Brendan Burgess

__





						Bitcoin is not like gold
					

It is much closer to speculating in gold than betting on horses.   Buying bitcoin has really very little in common with investing in gold.   Gold has an intrinsic value - bitcoin has none Gold is difficult to value - it's hard to justify $1,300 per oz. But Bitcoin is easy to value - it's...



					www.askaboutmoney.com


----------



## tecate

Brendan Burgess said:


> __
> 
> 
> 
> 
> 
> Bitcoin is not like gold
> 
> 
> It is much closer to speculating in gold than betting on horses.   Buying bitcoin has really very little in common with investing in gold.   Gold has an intrinsic value - bitcoin has none Gold is difficult to value - it's hard to justify $1,300 per oz. But Bitcoin is easy to value - it's...
> 
> 
> 
> www.askaboutmoney.com


Brendan, you've dodged and dived on this over the course of three years of discussion here.  It's beside this specific point at hand as to whether you think gold is not like bitcoin.  

HOW is gold valued?  HOW do I arrive at the fair price of gold today?

If valuation is similar to bitcoin, then WHY the outrage when it comes to bitcoin and not when it comes to the $9 trillion gold market?


----------



## MaxGordon

Tecate, 

What you need to understand about gold is that it gets dug out of the ground in Africa…..then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.

If only some respected economic commentator - someone with a biteen of credibility in the investment game - had said something like that....


To be serious, an excellent question which I don't recall ever been answered. I won't be on any hooks - tender or tenter!?


----------



## Brendan Burgess

Tecate

There is a whole thread which I linked to explaining why there is no comparison between gold and a bag of hot air.

I have  *not *recommended investment in gold.  I don't understand how it's valued.

I have pointed out that you will be saying in a few years "How on earth was I so stupid to compare gold with a bag of hot air?"

You can't come up with any explanation of the why BTC is worth  $100, $1,000 or $20,000. So you just say "Well fiat currencies are in trouble" or "how is gold valued?".   You might as well say that "Bitcoin is worth $20,000 because tulips were worth a house each at one stage" .

It's just more nonsense and it will take you some time and the crash in BTC to zero to appreciate that.

Brendan


----------



## tecate

Brendan Burgess said:


> There is a whole thread which I linked to explaining why there is no comparison between gold and a bag of hot air.


Brendan - you set this thread out on the basis of 'digital gold' and a discussion in that context. That's what we're doing here. What you've just stated is your opinion - it's not fact.



Brendan Burgess said:


> I have recommended investment in gold.  I don't understand how it's valued.


Ok, so lets have a look at exactly that. You recommend the purchase of gold yet you scream bloody blue murder at the notion of someone buying bitcoin.  Gold is at $1,878/oz. right now.  Should I buy?  If I wake up in the morning - and it's $3,000/oz., should I buy? 
You'll say that one has intrinsic value and the other doesn't - but besides the point that I don't strictly agree with you - that's not relevant here. Based on your recommendation to buy, I could lose the farm.



Brendan Burgess said:


> You can't come up with any explanation of the why BTC is worth  $100, $1,000 or $20,000.


Sure I can - it's valued in the same way as gold....and if that's not to your liking, lets see if you scream blue bloody murder at gold bugs - I'll bet my last bitcoin you won't.



Brendan Burgess said:


> It's just more nonsense and it will take you some time and the crash in BTC to zero to appreciate that.


And you say that will happen in 20 years, right?


----------



## tecate

MaxGordon said:


> What you need to understand about gold is that it gets dug out of the ground in Africa…..then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.


Indeed they would - as they would with some of the dialogue right here. People claiming that the cutting of bitcoin mining reward is not a reduction (!!). Meanwhile, gold has just become less scarce with the announcement of the worlds latest gold discovery (and the worlds largest gold mine).


----------



## MaxGordon

Guess they'll have to find more melters, a bigger hole, more shovels, more security guards.....


----------



## tecate

MaxGordon said:


> Guess they'll have to find more melters, a bigger hole, more shovels, more security guards.....


$2.5 billion worth of shovels and melters by all accounts.


----------



## Gus1970

tecate said:


> Let me address that long diatribe very simply - tell everyone what the fair value of gold is?
> And before there's any suggestion to the contrary, it's entirely relevant to this discussion.


Tecare, please stop talking about bitcoin just because you studied it deeply and made money investing on it, and start learning from those who wouldn’t touch it with a barge pole and fake laugh with grinding teeth for missing the opportunity of the century


----------



## tecate

Gus1970 said:


> please stop talking about bitcoin . . . and start learning from those who wouldn’t touch it with a barge pole


Yer dead right , i mean that's what I thought I was doing, awaiting the enlightenment but life will always disappoint Gus. I mean, I'm told I'll call myself stupid when bitcoin fails even though Ive said I'm counting on that as a potential outcome. 
Still, it could be worse.  Imagine the poor creatur who isn't open to all the possibilities. That'd be rough right? I'd hate to put myself in that position.

Speaking of the enlightenment, I had this on in the background today whilst working away. A smart cookie if ever there was one.


----------



## Brendan Burgess

tecate said:


> You recommend the purchase of gold yet you scream bloody blue murder at the notion of someone buying bitcoin.



That was a typo in my post. I have never recommended investment in gold.

Brendan


----------



## Brendan Burgess

Gus1970 said:


> didn’t you also recommend investment in real estate up until 2008? Am i wrong?



Irrelevant, but completely wrong.

Brendan


----------



## Duke of Marmalade

tecate said:


> I had this on in the background today whilst working away.


An amusing clip.  I presume you are the little white girl.  Let me suggest a sequel.  A glass of juice is put in front of you.  Then Max adds 2 teaspoonfuls of juice and asks you is there now more or less.  You say more.  Then Gus adds 1 more teaspoonful and asks the same question. You now say less.  Wolfie asks why you gave that answer.  You say because 1 teaspoonful is less than 2.  Do you see what I’m getting at? Or is that just another diatribe?

As an aside, we will only ever be a mature society when we can depict the thick one in a clip like that as being the black girl.


----------



## MaxGordon

tecate said:


> Still, it could be woImagine the poor creatur who isn't open to all the possibilities.



Indeed. Red flowers are red and all that. This open esprit - or lack thereof - also reminds me of Charlie Duell from the US Patent Office. Back in the day, he figured that the patent office would soon shrink in size, and eventually close, because  "everything that can be invented has been invented".

Go figure.

Pity that the Duke of Marmalade seems to be engaging in personalised attacks on those with open minds. I think that the expression of different opinions should generally be welcomed and embraced.


----------



## Duke of Marmalade

Brendan Burgess said:


> Irrelevant, but completely wrong.
> 
> Brendan


Gus is totally out of order here.  Not just because he is wrong.  He abuses his anonymity to attack your real life persona.  If you have made comments in these fora they are fair game.  Things said in your real life should be out of bounds.  An offence compounded by his erroneously speculating as to what he thought you said.


----------



## Duke of Marmalade

MaxGordon said:


> Indeed. Red flowers are red and all that. This open esprit - or lack thereof - also reminds me of Charlie Duell from the US Patent Office. Back in the day, he figured that the patent office would soon shrink in size, and eventually close, because  "everything that can be invented has been invented".
> 
> Go figure.
> 
> Pity that the Duke of Marmalade seems to be engaging in personalised attacks on those with open minds. I think that the expression of different opinions should generally be welcomed and embraced.


Straight question Max.  Is the supply of bitcoin increasing or decreasing after the halving?


----------



## Brendan Burgess

Duke of Marmalade said:


> Straight question Max.



Duke - Now, you are out of order.   Demanding a straight answer. 

Here is your answer: Do you think that the supply of available gold is increasing? 

Brendan


----------



## MaxGordon

More than happy to answer but as the stoic Savoyard, Michel Barnier, has emphasised many a time - step by step.

There are outstanding questions on your side of the court. When Brendan and yourself answer these, I'll be delighted to reply.


----------



## tecate

Brendan Burgess said:


> That was a typo in my post. I have never recommended investment in gold.



Interesting. And tell me - this gold valuation you employed in 2015 as per the following post of yours, how did it work exactly? ->


Brendan Burgess said:


> I discovered the hard way that I know very little about commodities: I incurred significant losses on Tullow Oil and Barrick Gold (a Canadian mining company),* believing about two years ago – wrongly as it transpired – that oil and gold had hit rock bottom.* I cut my losses on both stocks in 2015. I have resolved to stick to stock-picking in future and not try to predict macro trends, whether in commodities, currencies, or in the overall level of the market..



Let us know how your calculation was arrived at - in that instance.


----------



## Brendan Burgess

tecate said:


> Let us know how your calculation was arrived at - in that instance.



This is getting beyond the ridiculous. 

You will have to ask the author of the Sunday Times article I was quoting.






						Colm Fagan's Diary of A Private Investor
					

By kind permission of the Sunday Times where they first appeared, I am reproducing Colm's articles.   While our Posting Guideline is clear:   11 We don't discuss individual shares You won't find any messages suggesting investing in CRH or asking if AIB is a good investment. It is not the purpose...



					www.askaboutmoney.com
				




Brendan


----------



## Duke of Marmalade

MaxGordon said:


> More than happy to answer but as the stoic Savoyard, Michel Barnier, has emphasised many a time - step by step.
> 
> There are outstanding questions on your side of the court. When Brendan and yourself answer these, I'll be delighted to reply.


Just the sort of answer at which @tecate excels.  No wonder s/he was quick off the blocks with the slap on the back.  S/he also probably buys into your faux indignation at what you term personalised attacks.


----------



## tecate

Brendan Burgess said:


> You will have to ask the author of the Sunday Times article I was quoting.


Sure, why not - all the one group think on that side of the house in any event. It seems you're both a tad confused as regards how gold (and commodities generally) are priced.

Wheeling this back to where it began, Brendan - your search for the valuation of bitcoin belongs with the valuation of gold and commodities. And that's why singling out bitcoin for specific outrage was never kosher.


----------



## MaxGordon

Ah now Duke,

I refuse to fall for the BJ/Cummings bullying tactics - you may like BJ but not my cup of tea at all.
Also, I note that your _silent_ partner in all of this was quick enough off the blocks with a slap on the back for you.

Brendan - is right about one thing though - this is getting ridiculous. For some time, direct questions have been not answered. All I tried to do is bring this to a head. Instead of simply answering the question, we get, yet another unfortunate attempt, to play the man not the ball.



Duke of Marmalade said:


> S/he also probably buys into your faux indignation at what you term personalised attacks.



Also, if you are going to use terms of French origin - please understand the _indignation _is feminine and so the correct form of the adjective in question is _fausse. _You're welcome!


----------



## Duke of Marmalade

MaxGordon said:


> Also, if you are going to use terms of French origin - please understand the _indignation _is feminine and so the correct form of the adjective in question is _fausse. _You're welcome!


I am well aware of its origin, but I am speaking English (French may even be against the AAM rules).  _Faux Indignation_ is the correct English term (try Google).  Anyway I note that you (erroneously) corrected the word but did not deny its accusation.
I also do not accept your protestations of innocence, that you are only trying to help.


----------



## Leo

MaxGordon said:


> What you need to understand about gold is that it gets dug out of the ground in Africa…..then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility.



Try removing all the gold from the device you used to post that message and come back and tell us more of how gold has no utility.


----------



## MaxGordon

Leo said:


> Try removing all the gold from the device you used to post that message and come back and tell us more of how gold has no utility.



Hi Leo,

I don't like the sense of being bullied - not by you I hasten to add. I have said before that I am happy (content, not contente for le duc) to answer all questions once the outstanding questions on the other side of the net have been answered. That's fair, non?

Last week or maybe it was the week before, it literally took multiple posts for the Duke to stop denying the undeniable (have a look - it's on this very thread) and here we go again on a different but similar charade.

By the way, the only form of faux that I can think of which invariably has structural intégrité when used in English is when it's combined with pas, as in, _faux-pas. _Typically used in a context, such as: "I made a mistake". Admittedly, not a term particularly prevalent in le duc's lexicon.

Note how any subsequent reply from said poster may well focus on this little side charade but refuse, at all costs, to answer the outstanding questions. As my pal Barnier says, I'm not going into _le tunnel_ until a bit of _fair-play_ is demonstrated. All I ask is for just a bit of _bonne foi_ or as le duc himself would put it, a bit of _bon foi....._


----------



## Duke of Marmalade

MaxGordon said:


> Hi Leo,
> 
> I don't like the sense of being bullied - not by you I hasten to add. I have said before that I am happy (content, not contente for le duc) to answer all questions once the outstanding questions on the other side of the net have been answered. That's fair, non?
> 
> Last week or maybe it was the week before, it literally took multiple posts for the Duke to stop denying the undeniable (have a look - it's on this very thread) and here we go again on a different but similar charade.
> 
> By the way, the only form of faux that I can think of which invariably has structural intégrité when used in English is when it's combined with pas, as in, _faux-pas. _Typically used in a context, such as: "I made a mistake". Admittedly, not a term particularly prevalent in le duc's lexicon.
> 
> Note how any subsequent reply from said poster may well focus on this little side charade but refuse, at all costs, to answer the outstanding questions. As my pal Barnier says, I'm not going into _le tunnel_ until a bit of _fair-play_ is demonstrated. All I ask is for just a bit of _bonne foi_ or as le duc himself would put it, a bit of _bon foi....._


I am sure @tecate is splitting his/her sides at the puerile humour.  I don't accept your _bona fides _but for what its worth please give me a synopsis of the questions that I have not answered.  To the extent that they are _bona fide _I will have no problem in answering them.


----------



## MaxGordon

Thank you, Duke

I choose to ignore the customary reflex swing - leopards will be leopards - and focus on the positive aspects. And this is encouraging. Perhaps, my dignified steadfastness and calm persistence have paid off again - much like they did in our last tête-à-tête. Or maybe it's because Leo has got involved. Whatever the case, this is great as we can now focus on the issues.

In deference to long-suffering Tecate, I believe that it's only fair that he compiles all outstanding questions.  I acknowledge his superior knowledge and I do not wish to spurn this breakthrough.

_Je vous prie de croire, Madame la duchesse/ Monsieur le duc, (comme vous aimez bien) en l’expression des mes plus respectueuses salutations._


----------



## Leo

MaxGordon said:


> I don't like the sense of being bullied - not by you I hasten to add. I have said before that I am happy (content, not contente for le duc) to answer all questions once the outstanding questions on the other side of the net have been answered. That's fair, non?



You can report any posts you feel are bullying via the link on the bottom left of that post. We try to view all reports impartially.



MaxGordon said:


> Last week or maybe it was the week before, it literally took multiple posts for the Duke to stop denying the undeniable



Sorry, I don't understand what that has to do with your claim gold has no utility?


----------



## tecate

Leo said:


> Sorry, I don't understand what that has to do with your claim gold has no utility?


At 7.48%, that industrial utility is so insignificant, I'd imagine it was hardly worth Max' time in responding.


----------



## Leo

tecate said:


> At 7.48%, that industrial utility is so insignificant, I'd imagine it was hardly worth Max' time in responding.



So if someone offered you 7% you'd turn it down in favour of a no-interest account as they're actually the same thing?

For some reason you also omit the 46% demand for jewelry too? (though that is down to around 30% of demand this year as COVID impacts discretionary spending)


----------



## Duke of Marmalade

MaxGordon said:


> Thank you, Duke
> 
> I choose to ignore the customary reflex swing - leopards will be leopards - and focus on the positive aspects. And this is encouraging. Perhaps, my dignified steadfastness and calm persistence have paid off again - much like they did in our last tête-à-tête. Or maybe it's because Leo has got involved. Whatever the case, this is great as we can now focus on the issues.
> 
> In deference to long-suffering Tecate, I believe that it's only fair that he compiles all outstanding questions.  I acknowledge his superior knowledge and I do not wish to spurn this breakthrough.
> 
> _Je vous prie de croire, Madame la duchesse/ Monsieur le duc, (comme vous aimez bien) en l’expression des mes plus respectueuses salutations._


And the questions are?


----------



## tecate

Leo said:


> So if someone offered you 7% you'd turn it down in favour of a no-interest account as they're actually the same thing?


 They're in NO way the same thing (as in, the analogy is totally flawed). It demonstrates that industrial use of gold is peripheral. Its value has little relation to that industrial use and everything to do with  a store of value use case based on the scarcity of gold.



Leo said:


> For some reason you also omit the 46% demand for jewelry too?


How, omit? You never referred to it. Aside from that, its been discussed already. As per the world gold council, they class gold jewelry as an investment category (because they have the experience to know that people worldwide lead with the value of gold as their main rationale in buying it).


----------



## tecate

Never a dull moment...

"Iran Amends Law to Allow Imports to be Funded with Cryptocurrency."

It's the first country to officially look to use bitcoin to facilitate imports/trade finance. It's also making bitcoin miners within the country sell bitcoin to the Iranian Central Bank. Venezuela also put a national crypto mining pool in place. 

This is big news. The reaction could be interesting to say the least (but ultimately, I think it doesn't matter - as there's not going to be any way to stop this).


----------



## Leo

tecate said:


> It demonstrates that industrial use of gold is peripheral.



Is peripheral industrial use @ ~7.48% = 0? If it is not zero, then the statement was factually incorrect. Bitcoin has a market cap 2.5% the size of the investment/reserve gold market. If 7.48% is peripheral, how did this thread get to 25 pages on something of even less consequence?

Is there utility in gold in the production of jewelry? Of course there is, it's a multi-billion dollar industry. 



tecate said:


> As per the world gold council, they class gold jewelry as an investment category (because they have the experience to know that people worldwide lead with the value of gold as their main rationale in buying it).



The Gold Council may have a vested interest in having it regarded as such, but I find no such statement on their site.  Can you point to where the Gold Council made that claim, and the source that confirms that investment is the primary driver for buying gold jewelry? How many people buying a ring in your average high-street retailer consider that purchase as an investment? Most purchasers subsequently give it away, yielding a 100% loss on that investment. In short, anyone buying retail gold jewelry as an investment is a moron.


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## Leo

tecate said:


> It's the first country to officially look to use bitcoin to facilitate imports/trade finance. It's also making bitcoin miners within the country sell bitcoin to the Iranian Central Bank. Venezuela also put a national crypto mining pool in place.



Hardly a surprise when they've been using it for years to bypass international sanctions, even doing so openly . From protecting vulnerable citizens' wealth from seizure under despotic regimes to propping up those self same rulers....it really does provide something for everyone!


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## Brendan Burgess

Leo said:


> Most purchasers subsequently give it away, yielding a 100% loss on that investment. In short, anyone buying retail gold jewelry as an investment is a moron.



Hi Leo 

You are beginning to make it sound like Bitcoin.   

Brendan


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## Duke of Marmalade

tecate said:


> Never a dull moment...
> 
> "Iran Amends Law to Allow Imports to be Funded with Cryptocurrency."
> 
> It's the first country to officially look to use bitcoin to facilitate imports/trade finance. It's also making bitcoin miners within the country sell bitcoin to the Iranian Central Bank. Venezuela also put a national crypto mining pool in place.
> 
> This is big news. The reaction could be interesting to say the least (but ultimately, I think it doesn't matter - as there's not going to be any way to stop this).


This is not an endorsement of bitcoin.  It is just an extension of the criminal use of bitcoin, it is sanctions busting.  Now if they started to hold long term reserves in bitcoin, well that would be news, it would mean a sovereign nation believing in its "store of value".
But rogue nations using bitcoin for any purpose should be seen by enthusiasts as a negative development.  Most such enthusiasts accept that a major threat to the currency would be concerted action by the major nations to suppress it.  So far that hasn't happened as the powers that be don't take crypto seriously - rogue nations avoiding sanctions could change that.


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## Leo

Brendan Burgess said:


> Hi Leo
> 
> You are beginning to make it sound like Bitcoin.
> 
> Brendan



No, not quite. No personal experience thankfully, but I hear you can buy forgiveness with gold jewelry... so it can serve a purpose


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## tecate

Leo said:


> Is peripheral industrial use @ ~7.48% = 0? If it is not zero, then the statement was factually incorrect. Bitcoin has a market cap 2.5% the size of the investment/reserve gold market. If 7.48% is peripheral, how did this thread get to 25 pages on something of even less consequence?


You can take it out of context to support your world view all day long, Leo....but that's precisely what you're doing. 7.48% remains peripheral relative to the other use case of gold - which is as a store of value. Its value is derived from that.



Leo said:


> The Gold Council may have a vested interest in having it regarded as such, but I find no such statement on their site.  Can you point to where the Gold Council made that claim, and the source that confirms that investment is the primary driver for buying gold jewelry? How many people buying a ring in your average high-street retailer consider that purchase as an investment? Most purchasers subsequently give it away, yielding a 100% loss on that investment. In short, anyone buying retail gold jewelry as an investment is a moron.


Go back and read through the thread - I'm not digging up another link to their report - it's here and on record. That's their belief. You can believe that everyone else is a moron all you want. It changes nothing.



Leo said:


> Hardly a surprise when they've been using it for years to bypass international sanctions, even doing so openly . From protecting vulnerable citizens' wealth from seizure under despotic regimes to propping up those self same rulers....it really does provide something for everyone!


A surprise? No.  A significant development? Yes. Remember, if as a state they're going to pay in bitcoin, their overseas counterparts will be trading with them in bitcoin. They're also making efforts to secure more bitcoin so that they can finance more imports/trade.
As regards the moral standpoint, there are no innocents on either side of sanctions. The ones that suffer under sanctions are ordinary people - not either of the government actors implicated.




Brendan Burgess said:


> You are beginning to make it sound like Bitcoin.


You're doing well with your predictions so far, Brendan - keep them coming.



Duke of Marmalade said:


> Now if they started to hold long term reserves in bitcoin, well that would be news, it would mean a sovereign nation believing in its "store of value".


See above re the morals/ethics of sanctions and the weaponising of the international monetary system.
As regards holding reserves, think a little about what you're saying in relation to what Iran and its central bank are doing. That would be my recommendation.


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## WolfeTone

Duke of Marmalade said:


> It is just an extension of the criminal use of bitcoin



Criminal under whose law?


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## Duke of Marmalade

WolfeTone said:


> Criminal under whose law?


Ah Wolfie, so predictable.  I wasn't calling Iran criminal though personally I believe they are but let's agree to differ on that. It is an extension of criminal use in that it is attempting to get around US law, down't matter that you have no respect for US law.


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## tecate

WolfeTone said:


> Criminal under whose law?


Your point stands despite his response


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## WolfeTone

Duke of Marmalade said:


> Ah Wolfie, so predictable.  I wasn't calling Iran criminal though personally I believe they are but let's agree to differ on that. It is an extension of criminal use in that it is attempting to get around US law, down't matter that you have no respect for US law.



 That BOHA that you are so familiar with, do you inhale from it?


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## MaxGordon

I'd said he puffs on it but claims a Clinton.


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## Duke of Marmalade

I'm getting great fun guessing which of the quadumvirate (@tecate , @Gus1970 ,@MaxGordon ,@WolfeTone ) is chosen to echo the "likes" to attacks on me.  I would be flattered except, alas, I don't have much respect for said quadumvirate.  Still waiting for Max's list of questions which he says I don't answer.  Carefully avoiding rabbit holes dug by Wolfie like "US bad, Iran good".


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## Duke of Marmalade

tecate said:


> As regards holding reserves, think a little about what you're saying in relation to what Iran and its central bank are doing. That would be my recommendation.


I couldn't be bothered diving into the thinking of the mad mullahs, but I would bet my bottom Ripple that if they could safely trade in US$ and hold US$ without fear of freeze they would dump bitcoin as quick as they would remove Israel from the map.


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## MaxGordon

Duke of Marmalade said:


> I'm getting great fun guessing which of the Still waiting for Max's list of questions which he says I don't answer.



What part of post 686 are you having problems understanding?


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## WolfeTone

Duke of Marmalade said:


> I'm getting great fun guessing which of the quadumvirate (@tecate , @Gus1970 ,@MaxGordon ,@WolfeTone ) is chosen to echo the "likes" to attacks on me.



Ah, jeez _Duke _don't take it personally. Your latest "bitcoin is for the criminals" post is for the tabloid fillers. I thought it beneath you somewhat, not your usual standard.



Duke of Marmalade said:


> Carefully avoiding rabbit holes dug by Wolfie like "US bad, Iran good".



On second thoughts...having not even mentioned the US or Iran, I'm apparently digging this rabbit hole


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## tecate

Duke of Marmalade said:


> if they could safely trade in US$ and hold US$ without fear of freeze they would dump bitcoin as quick as they would remove Israel from the map.


His Dukeness clearly isn't a follower of world affairs it seems.


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## Duke of Marmalade

MaxGordon said:


> What part of post 686 are you having problems understanding?


#686 leaves it to @tecate to come up with the questions.  Come on _tecate_, I love a quiz.


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## tecate

Duke of Marmalade said:


> #686 leaves it to @tecate to come up with the questions.  Come on _tecate_, I love a quiz.


Surely there must be a latin crossword you can be getting on with your Dukeness?


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## Brendan Burgess

Folks

This has descended into farce and personal abuse which has been deleted. 

I want to promote the discussion and analysis of Bitcoin but not this sort of stuff. 

If any of you would like to write a systemic piece along the lines of "The case for Bitcoin" let me know.
I want a piece which a newcomer could read and understand the main arguments. 
But not a jokey piece. 

The plan would be to have a new thread where both sides would have their say in the first few posts.  I am sure it would deteriorate after that. But if we could get a few good posts on the first page, people would not need to go any further.

Brendan


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