# Price Volatility vs. System Volatility



## tecate

This is an excellent discussion of the topic by Caitlin Long via Forbes.  If anyone is still on the fence as regards the utility of Bitcoin, this should go some way towards clearing things up.











						Bitcoin, The Dollar And Facebook's Cryptocurrency: Price Volatility Versus Systemic Volatility
					

Amid bitcoin's wild price swings, it's worth remembering Bitcoin as a system was designed for systemic stability rather than price stability. In stark contrast, fiat currency systems were designed for price stability--at the cost of periodic instability in traditional financial systems.




					www.forbes.com


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## WolfeTone

Excellent article, succinctly demonstrates the value of bitcoin.
I think at this point it is fair to say that bitcoin is here to stay. I think it has now become, or is hurtling towards becoming, being embedded in the social fabric.
I think I will buy some more.


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## Gus1970

tecate said:


> This is an excellent discussion of the topic by Caitlin Long via Forbes.  If anyone is still on the fence as regards the utility of Bitcoin, this should go some way towards clearing things up.
> 
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> Bitcoin, The Dollar And Facebook's Cryptocurrency: Price Volatility Versus Systemic Volatility
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> Amid bitcoin's wild price swings, it's worth remembering Bitcoin as a system was designed for systemic stability rather than price stability. In stark contrast, fiat currency systems were designed for price stability--at the cost of periodic instability in traditional financial systems.
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> www.forbes.com



That’s a nice angle to use to look at crypto.

Most people that come from traditional finance struggle when trying to give bitcoin value because they try to use old measures that don’t apply.

To be able to assign a value to it,  first we need to be able to recognise the disruptive properties of crypto and blockchain, failing that, at best, you’ll be comparing apples and oranges and getting a summer cocktail of rubbish.

Thanks for sharing


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## NoRegretsCoyote

This is an excellent summary of the issues.

I was a huge sceptic of bitcoin back around 2009 as I thought its inherent volatility was a barrier to regular use as a medium of exchange.

I didn't reckon that demand for a secure medium for illegal transactions is very high. The alternatives - suitcases full of cash - carry lots of risk too, and users will put up with the volatility in exchange for security.

I think it is here to stay.


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## john luc

Quote,
"Most people that come from traditional finance struggle when trying to give bitcoin value because they try to use old measures that don’t apply."

Hmm so it's different this time.


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## Leo

I don't see anything new in that article. Is there really anyone who even had the slightest inclination that Bitcoin had price stability as a goal or in any element of the system design?

There is nothing in there that goes anyway towards assigning Bitcoin value other than 'Bitcoin is valuable to you as an insurance policy. Only in retrospect will it become clear how valuable that choice turns out to be.'

The only other benefit they include is 'a choice to own financial assets outside of the traditional fiat-currency system.' That misses the mark I think.


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## tecate

john luc said:


> Quote,
> "Most people that come from traditional finance struggle when trying to give bitcoin value because they try to use old measures that don’t apply."
> 
> Hmm so it's different this time.


What's your point or do you have one? 


Leo said:


> I don't see anything new in that article. Is there really anyone who even had the slightest inclination that Bitcoin had price stability as a goal or in any element of the system design?


So lack of systemic volatility isn't a feature/benefit, Leo?  And in terms of the existing centralised setup, systemic volatility is a good thing?  Do tell.


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## Leo

tecate said:


> What's your point or do you have one?



Not aimed at you, more the follow on comments that seem to think this is an endorsement of some intrinsic value. It's a nice comparison of an aspect of FIAT Vs Bitcoin, but it shouldn't really be a surprise to anyone with a basic understanding of how Bitcoin works, so I was surprised by the following enthusiasm... 



tecate said:


> So lack of systemic volatility isn't a feature/benefit, Leo?



You'll note I didn't state it was. I've worked in IT a long time, a lack of systemic volatility is a basic assumption in any of the systems I work with. 



tecate said:


> And in terms of the existing centralised setup, systemic volatility is a good thing?  Do tell.



Care to point to where I said it was?


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## NoRegretsCoyote

Leo said:


> There is nothing in there that goes anyway towards assigning Bitcoin value other than 'Bitcoin is valuable to you as an insurance policy. Only in retrospect will it become clear how valuable that choice turns out to be.'
> 
> The only other benefit they include is 'a choice to own financial assets outside of the traditional fiat-currency system.' That misses the mark I think.



True.

It's not in the article, but bitcoin has big demand for use as a medium of exchange in illicit transactions. This means that bitcoin (or a better crypto if it comes along) will always be with us.

I can't see it being part of the investment strategy of a typical AAMer, but that doesn't mean that cryptos don't have long-term value.


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## Leo

NoRegretsCoyote said:


> It's not in the article, but bitcoin has big demand for use as a medium of exchange in illicit transactions. This means that bitcoin (or a better crypto if it comes along) will always be with us.



True, though a lot of the bigger players in illicit trade have been moving away from Bitcoin as the anonymity of transactions has been tested and authorities such as Euopol have tools that have allowed them trace individuals behind transactions with some success.



NoRegretsCoyote said:


> I can't see it being part of the investment strategy of a typical AAMer, but that doesn't mean that cryptos don't have long-term value.



I still agree with the Antonopoulos view that it has more function in dysfunctional or entirely corrupt states. I think crypto will move on, Bitcoin has too many fundamental issues challenging its development, so better solutions will prevail.


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## tecate

Leo said:


> Not aimed at you, more the follow on comments that seem to think this is an endorsement of some intrinsic value. It's a nice comparison of an aspect of FIAT Vs Bitcoin, but it shouldn't really be a surprise to anyone with a basic understanding of how Bitcoin works, so I was surprised by the following enthusiasm...


I don't think its complete implications in terms of lack of systemic volatility are the thing of 'basic understanding' for most who are newly introduced to Bitcoin.  Systemic volatility takes some consideration to grasp in and of itself.



Leo said:


> You'll note I didn't state it was. I've worked in IT a long time, a lack of systemic volatility is a basic assumption in any of the systems I work with.


Exactly the point.  The article acknowledged Bitcoins issue in terms of price volatility.  However, it championed its lack of systemic volatility (by comparison with the conventional systems which are in place).  You rubbished the article but never mentioned or discussed the relevance of a lack of systemic volatility.



Leo said:


> Not aimed at you, more the follow on comments that seem to think this is an endorsement of some intrinsic value. It's a nice comparison of an aspect of FIAT Vs Bitcoin, but it shouldn't really be a surprise to anyone with a basic understanding of how Bitcoin works, so I was surprised by the following enthusiasm...


I don't think its complete implications in terms of lack of systemic volatility are the thing of 'basic understanding' for most who are newly introduced to Bitcoin.  Systemic volatility takes some consideration to grasp in and of itself.



Leo said:


> Care to point to where I said it was?


Careful with this.  You'll recall the back and forth that ensued following similar semantics a while back.  There's a question mark in the sentence of mine that you quote.  It's as per my point above - you rubbished the article yet didn't even mention the primary point or assertion of the article.


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## tecate

NoRegretsCoyote said:


> It's not in the article, but bitcoin has big demand for use as a medium of exchange in illicit transactions. This means that bitcoin (or a better crypto if it comes along) will always be with us.





Leo said:


> True, though a lot of the bigger players in illicit trade have been moving away from Bitcoin as the anonymity of transactions has been tested and authorities such as Euopol have tools that have allowed them trace individuals behind transactions with some success.


Snowden did use it but equally has come out recently and stated that it is the one facet of the cryptocurrency that needs to be worked on.  It's privacy is improving.  Schnorr signatures and the consideration of zero knowledge proofs.  The use of CoinJoin - which was recently implicated in a 100 person transaction (via the Wasabi wallet). 



NoRegretsCoyote said:


> I can't see it being part of the investment strategy of a typical AAMer, but that doesn't mean that cryptos don't have long-term value.


Of the typical AAM'er no.  But nothing ever stays the same.  Jamie Dimon said it was a fraud and later they launched their own crypto.  In recent days, news has emerged that Goldman Sachs are considering the same.  Recent months have seen the first pension funds invest in crypto with Fidelity and many other institutions now getting involved.  And on another thread in this sub-forum last week, I posted 2x links to  Deutsche Bank and Invesco analysts who actively brought up the notion of Bitcoins use as a hedge (something they would have laughed at 12 months ago).  Crypto/Bitcoin/Digital Assets may well be a part of an AAM'ers portfolio before they're conscious of it themselves (through their pensions, etc.).




Leo said:


> I still agree with the Antonopoulos view that it has more function in dysfunctional or entirely corrupt states. I think crypto will move on, Bitcoin has too many fundamental issues challenging its development, so better solutions will prevail.


I agree that crypto has far more utility in developing countries - exactly in terms of Caitlin Long's consideration of Stability Volatility.  Will Bitcoin maintain its relevance?  Difficult to say but right now, it seems to be embedded with a certain use case.  Time will tell.


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## Leo

tecate said:


> I don't think its complete implications in terms of lack of systemic volatility are the thing of 'basic understanding' for most who are newly introduced to Bitcoin.  Systemic volatility takes some consideration to grasp in and of itself.



We're not talking about people new to Bitcoin, I was referring to some others who champion Bitcoin seeming to find that a lack of such volatility somehow attributes value. My point is that there should be nothing new in this article for anyone who is actively pushing Bitcoin. 



tecate said:


> Exactly the point.  The article acknowledged Bitcoins issue in terms of price volatility.



Well, it doesn't call it out as an issue, it just says recent instability has caused some people to conclude Bitcoin is unstable, and then goes on the discuss price Vs systemic stability.  



tecate said:


> However, it championed its lack of systemic volatility (by comparison with the conventional systems which are in place).  You rubbished the article but never mentioned or discussed the relevance of a lack of systemic volatility.



I didn't rubbish it, I said 'It's a nice comparison of an aspect of FIAT Vs Bitcoin, but it shouldn't really be a surprise to anyone with a basic understanding of how Bitcoin works.'  I also mentioned I worked in IT, systemic volatility is simply not tolerated in any of the systems I've been involved with over the years. So I see nothing remarkable about such stability, I've had some involvement in systems procurement over the years, none of the major IT vendors pay on stability in their marketing material, it's assumed a a given.

I would have liked to see them delve more into the perceived systemic stability issues affecting FIAT to make it a meaningful comparison, but they don't unfortunately. 



tecate said:


> Careful with this.  You'll recall the back and forth that ensued following similar semantics a while back.  There's a question mark in the sentence of mine that you quote.  It's as per my point above - you rubbished the article yet didn't even mention the primary point or assertion of the article.



Careful? Perhaps you should stop putting words in my mouth and then just sticking a question mark after it. If you have a question ask it, no need for the doulbe speak...



tecate said:


> And in terms of the existing centralised setup, systemic volatility is a good thing? Do tell.


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## tecate

Leo said:


> We're not talking about people new to Bitcoin, I was referring to some others who champion Bitcoin seeming to find that a lack of such volatility somehow attributes value. My point is that there should be nothing new in this article for anyone who is actively pushing Bitcoin.


Who said we're not talking about people new to Bitcoin.  And other than that - new to Bitcoin or otherwise - you think most people have an appreciation of the inherent systemic instability in our current centralised systems?  I really don't think so.  In that respect the article is important as it gets that message out there and does so with some finesse.  



Leo said:


> Well, it doesn't call it out as an issue, it just says recent instability has caused some people to conclude Bitcoin is unstable, and then goes on the discuss price Vs systemic stability.


Of course it calls it out.



Leo said:


> I didn't rubbish it,


By not even acknowledging the central point of the article, you rubbished it.



Leo said:


> I would have liked to see them delve more into the perceived systemic stability issues affecting FIAT to make it a meaningful comparison, but they don't unfortunately.


Your view of course but I definitely disagree.



Leo said:


> Careful? Perhaps you should stop putting words in my mouth and then just sticking a question mark after it. If you have a question ask it, no need for the doulbe speak...


I did no such thing Leo.  I posed a question - that's why there's a "?" at the end of the sentence.  To suggest anything else is just plain wrong.


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## WolfeTone

Leo said:


> I've had some involvement in systems procurement over the years, none of the major IT vendors pay on stability in their marketing material, it's assumed a a given.



The references to instability are related to financial systems, not the IT systems used to operate financial systems.
Financial systems being anything from Central Bank and Government policies of interference, rule making, rule changing, interpretation,  etc. These are the instabilities built into the financial system - basically centralized control.


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## Leo

tecate said:


> Who said we're not talking about people new to Bitcoin.



I did in the post you responded to...



tecate said:


> Of course it calls it out.



Can you quote that piece?



tecate said:


> By not even acknowledging the central point of the article, you rubbished it.



How so? My not commenting one way or another allows you to assume how I regard the material?



tecate said:


> I did no such thing Leo.  I posed a question - that's why there's a "?" at the end of the sentence.  To suggest anything else is just plain wrong.



Why not ask a simple question then? Suggestive formatting is generally an attempt to put forward an answer as fact. And why the need for the roll eyes if it's just a question? The accepted usage of the roll eyes emoji is to express disbelief. What is it you don't believe if you're just asking a question without suggesting where my thoughts on the matter lie?


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## Gus1970

john luc said:


> Quote,
> "Most people that come from traditional finance struggle when trying to give bitcoin value because they try to use old measures that don’t apply."
> 
> Hmm so it's different this time.



Some people still use horses to move around and light candles to have dinner in the evening, for them, nothing ever changed.

You pick where you want to be


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## Gus1970

Leo said:


> I didn't rubbish it, I said 'It's a nice comparison of an aspect of FIAT Vs Bitcoin, but it shouldn't really be a surprise to anyone with a basic understanding of how Bitcoin works.'  I also mentioned I worked in IT, systemic volatility is simply not tolerated in any of the systems I've been involved with over the years. So I see nothing remarkable about such stability, I've had some involvement in systems procurement over the years, none of the major IT vendors pay on stability in their marketing material, it's assumed a a given.



I’m not sure the article refers to your IT systems, but i’m sure i must be wrong somewhere.


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## tecate

Leo said:


> I did in the post you responded to...


And since when do you set the parameters.  Clearly that article is insightful for anyone that hasn't considered the aspect of systemic volatility.  You'll note from my initial post, it was on that basis that I started this thread.



Leo said:


> Can you quote that piece?


The headline refers to it - then she specifically says as much in the first line.  We can go back and trawl through the rest of the article if you wish ...although I can't see how that is necessary.



Leo said:


> How so? My not commenting one way or another allows you to assume how I regard the material?


In this context, it certainly does.  Everyone who has heard anything about Bitcoin knows that it suffers from price volatility.  The insight came from the consideration of stability volatility.  You said that the article didn't bring anything new - yet it did (with its consideration of stability volatility).  You opened with that and proceeded not to mention anything about that main theme to the article. 



Leo said:


> Why not ask a simple question then?


Respectfully, you now agree that it is a question and don't like the nature of the question?



Leo said:


> Why not ask a simple question then? Suggestive formatting is generally an attempt to put forward an answer as fact. And why the need for the roll eyes if it's just a question? The accepted usage of the roll eyes emoji is to express disbelief. What is it you don't believe if you're just asking a question without suggesting where my thoughts on the matter lie?


Subjective formatting and the correct use of roll eyes emoji's?  This is getting obtuse.  I suggest we focus on the actual discussion.


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## Leo

tecate said:


> And since when do you set the parameters.  Clearly that article is insightful for anyone that hasn't considered the aspect of systemic volatility.  You'll note from my initial post, it was on that basis that I started this thread.



You chose to respond to a point I made about people with a basic understanding of how Bitcoin works, you then tried to dismiss my point by talking about people who were new to Bitcoin. So I've no problem with anyone disagreeing with or challenging my views, but challenge what I said, not some other point entirely.



tecate said:


> The headline refers to it - then she specifically says as much in the first line.  We can go back and trawl through the rest of the article if you wish ...although I can't see how that is necessary.



It doesn't. The headline is: 'Bitcoin, The Dollar And Facebook's Cryptocurrency: Price Volatility Versus Systemic Volatility'.  Nowhere does that even suggest whether such volatility is a good or bad thing. 

The article continues in a similar vein. So again, please quote where they have said or suggested it's an issue?



tecate said:


> In this context, it certainly does.



Context is irrelevant. You cannot conclude what my thoughts are if I have not even hinted at them.

QUOTE="tecate, post: 1617528, member: 96631"]You said that the article didn't bring anything new - yet it did (with its consideration of stability volatility).  [/QUOTE]

And I stand by that, there is nothing new in there. The systemic stability they refer to is a long standing feature of Bitcoin. I have said it as an interesting (if somewhat one sided) FIAT Vs Bitcoin comparison of a feature, but it should be no surprise to anyone who is pushing Bitcoin. 



tecate said:


> Respectfully, you now agree that it is a question and don't like the nature of the question?
> 
> Subjective formatting and the correct use of roll eyes emoji's?  This is getting obtuse.  I suggest we focus on the actual discussion.



I was trying to have an open discussion. You chose to presuppose my view through the use of suggestive formatting, then used the roll eyes in response to your assumption. That doesn't lead to anything constructive.


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## Leo

Gus1970 said:


> I’m not sure the article refers to your IT systems, but i’m sure i must be wrong somewhere.



My point is systemic stability is a basic assumption in modern IT systems. Bitcoin is at its heart, an IT systems, so this feature really shouldn't by anything to get too excited about.


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## WolfeTone

Leo said:


> My point is systemic stability is a basic assumption in modern IT systems. Bitcoin is at its heart, an IT systems, so this feature really shouldn't by anything to get too excited about.



I don't think anybody is getting excited about that? Why bring it up?


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## WolfeTone

"Bitcoin is the opposite of fiat currencies, which generally exhibit price-stability but are susceptible to periodic bouts of _financial system_ instability" - from the article.


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## tecate

Leo said:


> You chose to respond to a point I made about people with a basic understanding of how Bitcoin works, you then tried to dismiss my point by talking about people who were new to Bitcoin. So I've no problem with anyone disagreeing with or challenging my views, but challenge what I said, not some other point entirely.


I disagree entirely.  In my initial post, I referred to people who still hadn't made up their minds on Bitcoin and by inference, if they have not  make up their minds likely they're still in a formative stage in their overall understanding of it (and as the OP, that was my thinking).  Furthermore, regarding Bitcoins price instability , even those who don't in reality understand Bitcoin - they are familiar with (price instability).  They're reminded of the fact constantly in the media.



Leo said:


> It doesn't. The headline is: 'Bitcoin, The Dollar And Facebook's Cryptocurrency: Price Volatility Versus Systemic Volatility'. Nowhere does that even suggest whether such volatility is a good or bad thing.
> The article continues in a similar vein. So again, please quote where they have said or suggested it's an issue?


The headline sets up the discussion.  The clear components of that discussion are Price Volatility and Stability Volatility.
That first line I referred to - *"Bitcoin’s price swung wildly this week, causing many to conclude bitcoin is unstable. "*
This - people who know nothing about Bitcoin go on about all day long.  I''m not saying that it's not a major issue (it is) - but by comparison, very few even know the good that BTC brings to the table in terms of Stability Volatility.  And I disagree completely that this is assumed and everyone knows this.  That's not the case at all - as it gets little in the way of airing in media in any event...and as for comparatively with mentions of Price Volatility, it's not at the races at all.



Leo said:


> Context is irrelevant. You cannot conclude what my thoughts are if I have not even hinted at them.


I disagree vehemently.
Once again, anyone who has ever read a few headlines about Bitcoin and possibly still doesn't even know what it is knows that it suffers from Price Volatility yet the vast majority wouldn't be able to tell you what's significant about Stability Volatility (relative to Bitcoin).  You said the article didn't bring anything new and failed to mention a word about Stability Volatility - which is central to the whole article.



Leo said:


> And I stand by that, there is nothing new in there. The systemic stability they refer to is a long standing feature of Bitcoin. I have said it as an interesting (if somewhat one sided) FIAT Vs Bitcoin comparison of a feature, but it should be no surprise to anyone who is pushing Bitcoin.


Point out to us in your original post on this thread where you found the article to be nothing new *"to anyone pushing Bitcoin'?*



Leo said:


> I was trying to have an open discussion. You chose to presuppose my view through the use of suggestive formatting, then used the roll eyes in response to your assumption. That doesn't lead to anything constructive.


No way in the world do I or will I agree with you on that.  If you were in any way interested in an open discussion, this is not the type of nonsense you'd pursue.  Being deliberately obtuse and persnickety doesn't serve an open discussion.


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## Leo

WolfeTone said:


> I don't think anybody is getting excited about that? Why bring it up?



I wasn't the one who brought it up....


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## Leo

Let's take this one question at a time so...



tecate said:


> Exactly the point. The article acknowledged Bitcoins issue in terms of price volatility.



Please point to where the article states this is an issue?


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## tecate

Leo said:


> Please point to where the article states this is an issue?


To what end?  What point are you trying to make here?


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## Leo

tecate said:


> To what end?  What point are you trying to make here?



To attempt to discuss and challenge a point you have made in this thread.


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## tecate

Leo said:


> To attempt to discuss and challenge a point you have made in this thread.


Feel free to make whatever point you want to make, Leo.


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## WolfeTone

Leo said:


> *My point* is systemic stability is a basic assumption in modern IT systems.





Leo said:


> I wasn't the one who brought it up....



Can you stay on topic and address the central points that the article has raised, or not comment at all?


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## Sunny

tecate said:


> Of the typical AAM'er no.  But nothing ever stays the same.  Jamie Dimon said it was a fraud and later they launched their own crypto.  In recent days, news has emerged that Goldman Sachs are considering the same.  Recent months have seen the first pension funds invest in crypto with Fidelity and many other institutions now getting involved.  And on another thread in this sub-forum last week, I posted 2x links to  Deutsche Bank and Invesco analysts who actively brought up the notion of Bitcoins use as a hedge (something they would have laughed at 12 months ago).  Crypto/Bitcoin/Digital Assets may well be a part of an AAM'ers portfolio before they're conscious of it themselves (through their pensions, etc.).



JPMorgan, Goldman Sachs, Fidelity hedge funds or any other financial institution are not getting involved because they believe in crypto. They are doing it because there is money to be made by the volatility. Trading desks love volatility. It's where they make their money. It is no different to CDO's which then became CDO squared which then became CDO Cubed. Banks saw the money to made and rushed into the product. Didn't make the product any good. Once hedge funds who are supposedly responsible for a lot of the recent price increases got involved, all the main institutions had to get involved to service them. That's very different to actually believing in crypto themselves. Lets see what long positions these banks are holding in crypto.  Even now, there are many institutions staying well the hell away from it. Crypto is not an asset class. It is years away before being even thought of as such if it even gets there.


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## Leo

WolfeTone said:


> Can you stay on topic and address the central points that the article has raised, or not comment at all?



You asked a question, I answered your question.  

If we want to get back to the article, can you elaborate on why you said:



WolfeTone said:


> Excellent article, succinctly demonstrates the value of bitcoin.



What in that article *demonstrates* the value of bitcoin?


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## Leo

tecate said:


> Feel free to make whatever point you want to make, Leo.



So you won't answer my question?

Thanks for allowing me to make my points though, it's nice that I might be able to make a point without others presupposing my opinion to their ends.


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## tecate

Leo said:


> So you won't answer my question?


Pretty selective standards you have there - given that you ignored mine.



Leo said:


> Thanks for allowing me to make my points though, it's nice that I might be able to make a point without others presupposing my opinion to their ends.


Respectfully, I'm not getting dragged down into this nonsense.  You did this once before.  I have no time for your pedantics.


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## WolfeTone

Leo said:


> You asked a question, I answered your question.



You answered with a falsehood. You made a point, and it was your point, about the stability of IT systems taken as a given. This was never doubted or questioned in the article or in any of the comments here, hence my reason for asking you - why bring it up? 
There are two answers, a true answer or a false answer. You have provided a false answer already - "I wasnt the one who brought it up...."

I would hazard a guess that the true answer lies somewhere between you not understanding the article or the question. 

But to answer your question, as a matter of courtesy, the article demonstrates the value of bitcoin by the stability built into its system.


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## tecate

Sunny said:


> JPMorgan, Goldman Sachs, Fidelity hedge funds or any other financial institution are not getting involved because they believe in crypto. They are doing it because there is money to be made by the volatility. Trading desks love volatility. It's where they make their money. It is no different to CDO's which then became CDO squared which then became CDO Cubed. Banks saw the money to made and rushed into the product. Didn't make the product any good. Once hedge funds who are supposedly responsible for a lot of the recent price increases got involved, all the main institutions had to get involved to service them. That's very different to actually believing in crypto themselves. Lets see what long positions these banks are holding in crypto.  Even now, there are many institutions staying well the hell away from it. Crypto is not an asset class. It is years away before being even thought of as such if it even gets there.


In terms of trading desks, all day long - I agree with you.  They don't have to give a fiddlers about what it is or what it does.  If they can trade it, they make money.  No dispute there.   That said, they're seeing demand from their clients who want to gain exposure to it.

Where our views would probably diverge is in terms of Bitcoin not being thought of as an asset class.  It's in the early stages of being recognised as a hedge against the conventional monetary system and is taking its place next to gold as digital gold.


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## Leo

WolfeTone said:


> You answered with a falsehood. You made a point, and it was your point, about the stability of IT systems taken as a given. This was never doubted or questioned in the article or in any of the comments here, hence my reason for asking you - why bring it up?



I said:  Bitcoin is at its heart, an IT systems, so this feature really shouldn't by anything to get too excited about.  You then asked 



WolfeTone said:


> I don't think anybody is getting excited about that? Why bring it up?



So I answered that I didn't bring up the topic of Bitcoin's stability. 



WolfeTone said:


> There are two answers, a true answer or a false answer. You have provided a false answer already - "I wasnt the one who brought it up...."



As above, the answer I provided is demonstrably true, yet you accuse me of lying!



WolfeTone said:


> I would hazard a guess that the true answer lies somewhere between you not understanding the article or the question.



Perfect timing thanks! I'd just been discussing this thread offline, and I made the point that some of the contributions here are very much typical of a lot of discussion on the crypto forums. If anyone challenges the 'cryptos are awsome' viewpoint, even with the most logical of argument, at some point others will accuse the contrary voice of simply not understanding the issue.  



WolfeTone said:


> But to answer your question, as a matter of courtesy, the article demonstrates the value of bitcoin by the stability built into its system.



You already said that, I asked you how it demonstrates that value. It seems you may be equating stability with value value for some reason. What calculation do you use to arrive at that value, and what number does that calculation give you?


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## Leo

tecate said:


> Pretty selective standards you have there - given that you ignored mine.



I asked first.... answer that and I'll then answer any of you questions.



tecate said:


> Respectfully, I'm not getting dragged down into this nonsense.



I answered the question you posed in a respectful manner. If you don't want to answer the question, fine, but don't obfuscate and then accuse me of nonsense.


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## WolfeTone

@Leo

I perhaps over-reacted by labelling your comment as a falsehood, I retract that comment. I do think it more a case of crossed-wires. 

1. Nobody is getting excited about bitcoin as a stable IT system per se. Instead, the excitement is (if any) its stability as an IT system acting as a currency relative to the price stability of fiat currencies operating within global financial systems that are unstable. 
Its this relativity that you appear not to have addressed, thus somewhat taking the topic of course.

2. My own experience is, when the topic is open and the central themes of discussion are kept on track, that discussions in the crypto space are robust and honest.

3. As for value, stable systems - IT, Financial, Mechanical, Ecological, Biological, etc...etc...all hold value. Asking me to put a mathematical calculation on that value is futile, anymore than putting a mathematical calculation on the value of river systems on the environment. 

My propensity to buy more bitcoin derives from that understanding that bitcoin is robust and offers me space outside of the unstable global financial system.


----------



## tecate

Leo said:


> I asked first.... answer that and I'll then answer any of you questions.


It sounds like something you'd hear in a school yard.


Leo said:


> I answered the question you posed in a respectful manner. If you don't want to answer the question, fine, but don't obfuscate and then accuse me of nonsense.


If that's my finding Leo, that's my finding.  You're more than within your rights to disagree.  You took the discussion down this rabbit hole of pedantics previously (and to add, I'm not saying that was deliberate or malicious on your part).  I don't intend to follow you down it a second time - it's simply pernicious to the discussion at hand.   I suggest we just reset at simply this.  I don't agree that Caitlin Long's Forbes article doesn't bring anything new to the table in the sense that the world and it's wife is familiar with Bitcoin in terms of price volatility but considerably less people appreciate the upside it has on the conventional system in terms of stability volatility.  
We don't agree on it - and that's perfectly fine.  Lets park it up at that.


----------



## Leo

WolfeTone said:


> I perhaps over-reacted by labelling your comment as a falsehood, I retract that comment. I do think it more a case of crossed-wires.



Fair enough, appreciated. 



WolfeTone said:


> 1. Nobody is getting excited about bitcoin as a stable IT system per se. Instead, the excitement is (if any) its stability as an IT system acting as a currency relative to the price stability of fiat currencies operating within global financial systems that are unstable.
> Its this relativity that you appear not to have addressed, thus somewhat taking the topic of course.



Yep, my point all along was that anyone familiar with Bitcoin shouldn't regard that article as presenting anything they didn't already know. I did point out earlier that in my opinion the article fell short of a meaningful assessment in that while it mentions systemic instability of FIAT, it doesn't spend any time discussing what they are, their impact, or how Bitcoin or other cryptos could prove to be of benefit. So to me, the title promised a comparison on price versus systemic stability of Bitcoin, Libra, and the Dollar, but it focused almost entirely on Bitcoin, with a little on Libra and didn't go into any detail on the issues with FIAT that might justify investment in cryptos, and so I think it was a missed opportunity. 



WolfeTone said:


> 3. As for value, stable systems - IT, Financial, Mechanical, Ecological, Biological, etc...etc...all hold value. Asking me to put a mathematical calculation on that value is futile, anymore than putting a mathematical calculation on the value of river systems on the environment./QUOTE]
> 
> In IT, engineering, etc., stability is a cost play, not a value one. When we assess investment in IT systems, we evaluate income versus total cost of ownership. Stability is factored in through high availability design models and multiple layers of redundancy, and a cost is associated with that. Against that, we know what a partial or complete system outage is likely to cost in terms of lost business. The greater the potential loss, the more we invest in stability. That stability however doesn't affect the value of the products and services we sell.
> 
> 
> 
> WolfeTone said:
> 
> 
> 
> My propensity to buy more bitcoin derives from that understanding that bitcoin is robust and offers me space outside of the unstable global financial system.
> 
> 
> 
> 
> That's fair enough, that's a valid reason to want to buy crypto. One of the aims of AAM is to help consumers make informed decisions, s owe'd hope people understand that stability aspect of any potential investment before putting any money on the line.
Click to expand...


----------



## Leo

tecate said:


> It sounds like something you'd hear in a school yard.



Or parliament or anywhere grown ups try to engage in debate with someone who refuses to answer a question.


----------



## tecate

Leo said:


> Or parliament or anywhere grown ups try to engage in debate with someone who refuses to answer a question.


That's all dependent on the question(s) centering on the actual topic at hand, not pedantic peripherals.


----------



## Leo

tecate said:


> That's all dependent on the question(s) centering on the actual topic at hand, not pedantic peripherals.



I'll adopt your approach so and assume that means you now acknowledge that the article did not state that price volatility was an issue for Bitcoin.


----------



## tecate

Leo said:


> I'll adopt your approach so and assume that means you now acknowledge that the article did not state that price volatility was an issue for Bitcoin.


As stated a couple of times already,  people who know little (if anything) about Bitcoin know of its price volatility  - as its the item that gets reported about it consistently in the media.   Go out onto the street right now and ask someone what's the relevance of stability volatility to Bitcoin and most likely, they won't have a notion of what you're talking about.  It's in that respect, Caitlin Long's excellent Forbes write-up is relevant.  You don't agree and you're perfectly entitled not to agree.

However, that was and remains my point, Leo.  You can be pedantic about it as much as you wish.


----------



## Leo

tecate said:


> However, that was and remains my point, Leo.  You can be pedantic about it as much as you wish.



I don't think anyone here argued that point! I disagreed with an assertion you made and you refuse to address that.


----------



## tecate

Leo said:


> I don't think anyone here argued that point! I disagreed with an assertion you made and you refuse to address that.


What I want to do Leo is stick with the core discussion and not take the discussion down a cul de sac.  That's why I respectfully suggested we reset and park it up.  However, I guess we all see things from different perspectives.


----------



## Leo

tecate said:


> What I want to do Leo is stick with the core discussion and not take the discussion down a cul de sac.



Fair enough, we'll leave it there. I'd request however that you don't presuppose my position on this or other topics, and I'll happily engage and answer any questions posed as openly and honestly as I can.


----------



## tecate

Leo said:


> Fair enough, we'll leave it there. I'd request however that you don't presuppose my position on this or other topics, and I'll happily engage and answer any questions posed as openly and honestly as I can.


Well, I'd sooner come at it from the other direction, Leo.  I respect completely that you're a detail oriented person.  However, if it's something peripheral to the discussion and you feel that I've misquoted you, maybe that just gets pointed out and we move on.


----------



## Duke of Marmalade

tecate said:


> This is an excellent discussion of the topic by Caitlin Long via Forbes.  If anyone is still on the fence as regards the utility of Bitcoin, this should go some way towards clearing things up.
> 
> 
> 
> 
> 
> 
> 
> 
> 
> 
> 
> Bitcoin, The Dollar And Facebook's Cryptocurrency: Price Volatility Versus Systemic Volatility
> 
> 
> Amid bitcoin's wild price swings, it's worth remembering Bitcoin as a system was designed for systemic stability rather than price stability. In stark contrast, fiat currency systems were designed for price stability--at the cost of periodic instability in traditional financial systems.
> 
> 
> 
> 
> www.forbes.com


I have found myself sucked back into this space in recent days.  Good fun, if not quite as good as watching simultaneously a tie break in the cricket World Cup after a 241 draw and a tie break in Wimbledon after 2 sets all and 12 games all.
Anyway, I digress, as I say I find myself wandering in AAM btc space yet again.  And I find this absolute corker.  What an utter rubbish article from the boul' Caitlin Long.
We are treated to a completely irrelevant discourse on hash power.  We are told more hash power means more security, and bitcoin holders can sleep more soundly at night.  As a bitcoin skeptic let me assure all that I have absolutely no doubts on the security of btc.  It is a security that could be achieved at a miniscule fraction of the hash power now being applied.  The reason for the mega hash power is not a self adjusting security mechanism but an unfortunate consequence of Satoshi's desire to limit the release of blocks to 1 every 10 minutes.  As btc reaches prices which I am sure Satoshi never wildly anticipated the pursuit of btc riches has made mining an enormously over resourced activity compared to what is required to maintain the security of the blockchain.
I freely admit that I would love to see crypto crash and burn.  But reading this piece Caitlin reveals a very thinly veiled desire to see the mainstream financial system crash and burn.  The Donald would likely ask Caitlin to go back where she came from.


----------



## WolfeTone

Duke of Marmalade said:


> But reading this piece Caitlin reveals a very thinly veiled desire to see the mainstream financial system crash and burn.



There is no such "thinly veiled desire" in this article to see the mainstream financial system crash and burn. What the article is pointing out, correctly so, is that central banks interfere in markets to maintain price stability. In doing so, it can cause investors to misallocate capital, in turn fomenting the conditions for systemic volatility further down the road.


----------



## tecate

Duke of Marmalade said:


> What an utter rubbish article from the boul' Caitlin Long.


How utterly embarrassing for you to even say that.  She's one of the most credible people in the space.



Duke of Marmalade said:


> We are treated to a completely irrelevant discourse on hash power.  We are told more hash power means more security, and bitcoin holders can sleep more soundly at night.


If you don't appreciate what increased hash power for the network means, then you lack a basic understanding as to how the bitcoin network works.



Duke of Marmalade said:


> As a bitcoin skeptic let me assure all that I have absolutely no doubts on the security of btc.  It is a security that could be achieved at a miniscule fraction of the hash power now being applied.


It could be Duke - but for networks that have taken a different approach - they don't match the Bitcoin network in terms of security.  In your precious conventional banking system, there is no such system that matches the robustness of the Bitcoin blockchain network.  



Duke of Marmalade said:


> The reason for the mega hash power is not a self adjusting security mechanism but an unfortunate consequence of Satoshi's desire to limit the release of blocks to 1 every 10 minutes.


You really have such a hang up about the mechanism of the proof of stake algorithm.  Again, it belies the fact that you don't understand it.



Duke of Marmalade said:


> As btc reaches prices which I am sure Satoshi never wildly anticipated the pursuit of btc riches has made mining an enormously over resourced activity compared to what is required to maintain the security of the blockchain.


He designed in scarcity - there's no doubt that he would have expected an ever increasing price.



Duke of Marmalade said:


> I freely admit that I would love to see crypto crash and burn.


At least you're honest about it - as there are others.  Whatever about the price speculation, you're going to be sadly wrong on the notion that it will disappear.  



Duke of Marmalade said:


> But reading this piece Caitlin reveals a very thinly veiled desire to see the mainstream financial system crash and burn.  The Donald would likely ask Caitlin to go back where she came from.


22 years on Wall Street?  Is that where the Donald would send her?  She worked your precious conventional system.  Other than that, I don't see any such 'thinly veiled desire' - please quote the sections of text that belie that claim.  She has identified flaws in the conventional system in that article.  I know that's an inconvenient truth for you but so be it.


----------



## Duke of Marmalade

tecate said:


> If you don't appreciate what increased hash power for the network means, then you lack a basic understanding as to how the bitcoin network works.


I see that later on you change this assessment.



> You really have such a hang up about the mechanism of the proof of stake algorithm.  Again, it belies the fact that you don't understand it.


The double negative states that I do understand the mechanism of mining.  Though I must humbly admit to not being a nerd and that I am relying on my interpretation of what _fpalb _said in these parts and she certainly seemed to know her onions.  I also suspect that moderator _Leo _is a nerd (he also has demonstrated impressive knowledge of all things blockchain) and I am encouraged by his "like".




> He designed in scarcity - there's no doubt that he would have expected an ever increasing price.


I will ignore the sexist presumption.  Central Banks target a low but steady inflation of fiat values.  This is based on the vast bulk of economic thought in this space as to what serves society best.  Money after all is there to serve society's economic needs.  If Satoshi was targeting persistent deflation she certainly did not have the best economic interests of society at the forefront. 




> 22 years on Wall Street?  Is that where the Donald would send her?  She worked your precious conventional system.  Other than that, I don't see any such 'thinly veiled desire' - please quote the sections of text that belie that claim.  She has identified flaws in the conventional system in that article.  I know that's an inconvenient truth for you but so be it.





			
				the boul Caitlin said:
			
		

> Yet, clear signs of underlying systemic instability are again showing up—because central bank actions not only interfere with price signals in markets, thereby causing investors to misallocate capital unintentionally, but they also gut balance sheets. We can see signs of systemic instability brewing yet again in esoteric but critical corners of money markets, which is usually where the next round of systemic instability shows up first. ​


Don't tell me she wouldn't be delighted to see the next round of systemic instability so that she can say "I told you so"​


----------



## tecate

Duke of Marmalade said:


> I see that later on you change this assessment.
> 
> The double negative states that I do understand the mechanism of mining.  Though I must humbly admit to not being a nerd and that I am relying on my interpretation of what _fpalb _said in these parts and she certainly seemed to know her onions.  I also suspect that moderator _Leo _is a nerd (he also has demonstrated impressive knowledge of all things blockchain) and I am encouraged by his "like".


I'm not sure that I do change the assessment.  Taking the hash rate in isolation, I don't think you appreciate the feature/benefit that belies that.  As regards the Proof of Stake based mechanism generally, you've continually come back to this and referenced it as if its a bad thing.  I can't see how you're reaching that conclusion. 

Otherwise, I'm glad Leo's 'Like' has served you up with a dopamine hit 




Duke of Marmalade said:


> I will ignore the sexist presumption.


That's quite sporting of you.  I have on other occasions used "he/she/they" but it gets a bit longwinded.  Happy to use an abbreviated term if you have one? I guess I can use "it" if that is sufficiently politically neutral for you?



Duke of Marmalade said:


> Central Banks target a low but steady inflation of fiat values.  This is based on the vast bulk of economic thought in this space as to what serves society best.  Money after all is there to serve society's economic needs.  If Satoshi was targeting persistent deflation she certainly did not have the best economic interests of society at the forefront.


I will ignore the sexist presumption.   And yet central bank decisions are make by people.  They can often be politically motivated or have come about due to political pressures.  To err is human and so at some stage or other, mistakes can and will be made.

As regards a deflationary system, I'm no economist but I can't see why we have to stick with these boom and bust economic cycles.  I can't see why its necessary to rob every citizen by devaluing the economic worth of the FIAT they hold year in, year out.  There is a smattering of you here that it seems are soo much against BOHA - yet we have those  very cycles in economies based on conventional centralised economic models.



Duke of Marmalade said:


> Don't tell me she wouldn't be delighted to see the next round of systemic instability so that she can say "I told you so"


And what is that based on, your dukeness?  Other than that, I don't think its in any way likely that she would feel any need to gloat (not that I think that's her mindset anyway) given that it's hardly rocket science.  Everyone accepts with centralised systems, there will be systemic instability from time to time - it's inevitable.

I think you've misunderstood the background she comes from also.  She's not an anti establishment cypherpunk (you love those, right?).  She's a wall street veteran of some 22 years standing.


----------



## Duke of Marmalade

tecate said:


> Otherwise, I'm glad Leo's 'Like' has served you up with a dopamine hit


Had to look that one up
Leaving the banter aside for a moment I really was gobsmacked by Caitlin's discourse on the interplay between hash power and security.  The idea that the security of the system is heavily reliant on the mining resources applied would make me very insecure.  She argues some virtuous mechanism whereby as prices go up the btc become more secure and vice versa.  Presumably this is a function of the incentive to mine btc.  So when the halvings come along will the security see a significant drop? And what about the security levels when the only incentives are the transaction fees?  From what I understood from _fpalb, _she is way, way overplaying this reliance of security on the hash power and thus on the incentive to mine.

Of course, I understand that a level of hash power is needed to secure the system. But at these levels btc has gone way past the point of diminishing returns in that front.  I am in fact more bullish than Caitlin on the future security of btc, I think it will be maintained through halvings and the ultimate phasing out of btc incentives altogether.


----------



## Gus1970

Duke of Marmalade said:


> The idea that the security of the system is heavily reliant on the mining resources applied would make me very insecure.



What does make you insecure?


----------



## tecate

Duke of Marmalade said:


> I really was gobsmacked by Caitlin's discourse on the interplay between hash power and security.  The idea that the security of the system is heavily reliant on the mining resources applied would make me very insecure.  She argues some virtuous mechanism whereby as prices go up the btc become more secure and vice versa.  Presumably this is a function of the incentive to mine btc.  So when the halvings come along will the security see a significant drop? And what about the security levels when the only incentives are the transaction fees?  From what I understood from _fpalb, _she is way, way overplaying this reliance of security on the hash power and thus on the incentive to mine.


Sure - the incentive gets handed off to the transaction fees.  I don't share your concern here.  I know that on a 'consumer' level, you may feel that there are no transactions being carried out but overall there are plenty.  Furthermore, Bitcoin has scarcity built in.  It's logical that there will be some upward pressure on the price with less BTC in circulation.  Therefore, the miners receive less reward but it's more valuable.  




Duke of Marmalade said:


> Of course, I understand that a level of hash power is needed to secure the system. But at these levels btc has gone way past the point of diminishing returns in that front.  I am in fact more bullish than Caitlin on the future security of btc, I think it will be maintained through halvings and the ultimate phasing out of btc incentives altogether.


Additional hashrate makes it more and more robust.  Other networks have not been road tested to the extent that BTC has.  That said, there's no need for complacency so more hashrate is always welcome.


----------



## Duke of Marmalade

tecate said:


> Sure - the incentive gets handed off to the transaction fees.  I don't share your concern here.


Read my post.  I am arguing that it is Caitlin who, by her obsessing on the virtuous effect of rewards on hash power and therefore on security, should be concerned when the rewards get halved and halved again until eventually it is only transaction fees.  I specifically said that I don't share that implied concern as the hash power is currently well in excess of what is needed for security purposes.


----------



## tecate

Duke of Marmalade said:


> Read my post.  I am arguing that it is Caitlin who, by her obsessing on the virtuous effect of rewards on hash power and therefore on security, should be concerned when the rewards get halved and halved again until eventually it is only transaction fees.  I specifically said that I don't share that implied concern as the hash power is currently well in excess of what is needed for security purposes.


Obsessing?  Where's the obsession?   Either way, why should she be concerned?  As per my post above, there will be sufficient 'reward' in the system to maintain  a functioning network.  Not sure where you're going with that.


----------



## Leo

Duke of Marmalade said:


> by her obsessing on the virtuous effect of rewards on hash power and therefore on security



The current demands for hash power are also having the effect of centralising control to a small number of players producing mining ASICs. North Korea have been putting significant effort into going after BitCoin. A small number of producers of mining rigs weakens the overall security posture. There's a mining ROI calculator here, interesting to see how low you need to get your electricity costs to make it profitable. Is there a point where the halvings mean it's no longer profitable to run anywhere?


----------



## tecate

Miners are just one stakeholder.  They can't act in isolation.  It's a point that's often forgotten.


----------



## Gus1970

Leo said:


> Is there a point where the halvings mean it's no longer profitable to run anywhere?



The bitcoin network It is a self regulating system. 

Until now every halving has caused a raise in the price and made what was non profitable before profitable after. The ecosystem is a complex adaptive system and as such there is no way of predicting its future behaviour.


----------



## Leo

Gus1970 said:


> The ecosystem is a complex adaptive system and as such there is no way of predicting its future behaviour.



That's not really correct though. The operational parameters of the system are very well defined and understood. As a result, modelling any number of scenarios isn't actually all that complex. The linked calculator is a useful tool in that regard.


----------



## Gus1970

Leo said:


> That's not really correct though. The operational parameters of the system are very well defined and understood. As a result, modelling any number of scenarios isn't actually all that complex. The linked calculator is a useful tool in that regard.



The bitcoin ecosystem is a complex adaptive system and as such one of its characteristics is that a perfect understanding of the individual parts does not automatically convey a perfect understanding of the whole system’s behaviour. Don’t trust what i say, trust complex systems theory that is science.


----------



## Leo

Gus1970 said:


> The bitcoin ecosystem is a complex adaptive system and as such one of its characteristics is that a perfect understanding of the individual parts does not automatically convey a perfect understanding of the whole system’s behaviour.



It's not really clear what you're trying to say there, but the controls that govern how Bitcoin functions and the whole system's behaviour is very tightly governed via open source software. As a result, the rules are published for all to see, making modelling of various scenarios eminently possible. 

What is it about the system that you feel precludes modelling? 



Gus1970 said:


> Don’t trust what i say, trust complex systems theory that is science.



So trust science that is science!


----------



## Gus1970

Leo said:


> the controls that govern how Bitcoin functions and the whole system's behaviour is very tightly governed via open source software. As a result, the rules are published for all to see, making modelling of various scenarios eminently possible.



The ecosystem is not limited to the software, the people that interact with it make it complex adaptive. 




Leo said:


> What is it about the system that you feel precludes modelling?


You are free to model all you want, science tells us that the behaviours are unpredictable



Leo said:


> So trust science that is science!



I’d rather trust science than random people on the internet, hence i suggested you go read about it instead of trusting me


----------



## Leo

Gus1970 said:


> The ecosystem is not limited to the software, the people that interact with it make it complex adaptive.



People who use the system are outside the system, they interact with it strictly according the the rules of the system. That does not preclude modelling in any way.



Gus1970 said:


> You are free to model all you want, science tells us that the behaviours are unpredictable



No, science through numerous studies tells us quite the opposite! There's a whole field of science dedicated to behavioral analytics, Google for example have made billions from it. In fact, one of the compelling facets of Bitcoin is the obvious deep understanding of human behaviour patterns and game theory that went into designing the mining/reward structure.  



Gus1970 said:


> I’d rather trust science than random people on the internet, hence i suggested you go read about it instead of trusting me



Don't worry, I don't trust you.


----------



## Gus1970

Leo said:


> People who use the system are outside the system


According to systems theory they are agents of the system, but only according to science





Leo said:


> No


Feel free to disagree with science



Leo said:


> I don't trust you.


That’s allowed, i’m happy for you to follow your personal path of discovery. Best of luck


----------



## Leo

Gus1970 said:


> According to systems theory they are agents of the system, but only according to science



Systems theory is a pretty loose multi-disciplinary approach to analysing complex systems. It's not really of much value when looking at an IT based system with very well defined rules, Regardless, if you want to call the users agents, that still does not preclude modelling. User modelling is applied on IT systems all the time.



Gus1970 said:


> Feel free to disagree with science



This isn't the first time on these pages where you have resorting to suggesting people just don't understand something when they point out an error in what you say. 

Feel free to quote some of this science.


----------



## Gus1970

Leo said:


> Systems theory is a pretty loose multi-disciplinary approach to analysing complex systems. It's not really of much value when looking at an IT based system with very well defined rules


Do you have any source for this distinction, i’m interested



Leo said:


> User modelling is applied on IT systems all the time.


True and it has been proven unable to predict the future, unless you have some source which i would be very interested in





Leo said:


> This isn't the first time on these pages where you have resorting to suggesting people just don't understand something when they point out an error in what you say.


Should i stop talking about things i know? 



Leo said:


> Feel free to quote some of this science.


I happily oblige


----------



## Duke of Marmalade

Caitlin said:
			
		

> Bitcoin is the opposite of fiat currencies, which generally exhibit price-stability but are susceptible to periodic bouts of financial system instability. By extension, stablecoins that track fiat currencies, such as Facebook’s new cryptocurrency (Libra), fall into the same category as fiat currencies—they’re designed for price stability, not systemic stability, and are exposed to the same risk of periodic instability of traditional financial systems.


This is nonsense!  I have no axe to grind for Libra; it is not for me, and I have no idea whether it will live up to the aims of its promoters.  But there is no _a priori_ reason at all why Libra should not be every bit as secure and systemically stable as bitcoin.  I will allow her to call fiat systemically unstable and so by extension Libra's *price *has potential instability (vis a vis the price of eggs for example) but of course nothing in the same league as the instability of the price of bitcoin.
So what Caitlin should really be arguing is that bitcoin was designed to have stability of *supply*, that's what differentiates it from Libra not systemic stability.  Stability of supply is not quite as sexy as systemic stability.  

There is an Uncertainty Principle at work in prices determined by supply and demand (as opposed to diktat).  The more certain you are of the price the more uncertain you are of the supply and vice versa.  Since with bitcoin the supply is 100% certain its price is doomed to be highly unstable.  Bitcoin price will never, ever be stable unless it reaches its true worth of zero.


----------



## Gus1970

Duke of Marmalade said:


> But there is no _a priori_ reason at all why Libra should not be every bit as secure and systemically stable as bitcoin.



From a systemic point of view, Libra is centralised and susceptible to problems with the owner (facebook) similarly to Lehman Brothers.
Also it is susceptible to change of laws in any of the 195 countries.

These 2 issues do not affect the bitcoin network.

From a security point of view, the bitcoin network has proven with 10 years unbroken history to be quite resilient to attacks. Thousands of Facebook accounts get hacked daily as far as i can see


Libra will compete with the banks, not with bitcoin

My 2 cent


----------



## Leo

Gus1970 said:


> Should i stop talking about things i know?



You haven't been able to back up your assertions here yet...



Gus1970 said:


> True and it has been proven unable to predict the future, unless you have some source which i would be very interested in



Are you deliberately misunderstanding what I said? I never suggested we predict the future, simply analyse and model the behaviour of the Bitcoin system based on a number of possible scenarios. If you don't understand that, and IT capacity & performance testing methodology, then why comment on my post in the first place?



Gus1970 said:


> I happily oblige



Let's stick with this one.... Please quote your sources. Once we sort that out, we can move on to the other aspects and I'll post research articles for UBA and references for IT systems performance testing.


----------



## Leo

Gus1970 said:


> Thousands of Facebook accounts get hacked daily as far as i can see



There's a very significant difference between hacking an account, and hacking a system!! I'm aware of one successful attack on the system.  When '123456' is still the most commonly used password, the hacking of an account on many systems is a pretty trivial matter.


----------



## WolfeTone

Duke of Marmalade said:


> But there is no _a priori_ reason at all why Libra should not be every bit as secure and systemically stable as bitcoin.



Libra will be backed by a reserve basket of fiat currencies. Themselves, subject to price manipulation, in turn systemic instability.
Im only assuming that the Euro, for instance, is to be in this basket? The euro of sovereign state bankruptcy.
Its not me that is saying this, im only relaying the views of numerous economists that have warned against fundamental flaws inherent in the mechanics of the euro ever since its inception - which incidentally can be traced back as far as the 1960's.


----------



## WolfeTone

Duke of Marmalade said:


> Since with bitcoin the supply is 100% certain its price is doomed to be highly unstable. Bitcoin price will never, ever be stable unless it reaches its true worth of zero.



But it will never, ever reach its "true worth of zero", because it is doomed to be highly unstable. 
It cant be both? Both stable and doomed to be highly unstable?


----------



## Gus1970

Leo said:


> You haven't been able to back up your assertions here yet...



My assertion are backed up by research and science, you can find them within complex adaptive systems literature



Leo said:


> Are you deliberately misunderstanding what I said?



No. That seems to be your strength. Give caesars what’s caesars.



Leo said:


> I never suggested we predict the future, simply analyse and model the behaviour of the Bitcoin system based on a number of possible scenarios.



Well, you got short memory, in fact my answer to your message only quoted this question you asked: 

<leo\>Is there a point where the halvings mean it's no longer profitable to run anywhere?</leo>

To which i replied it can’t be known



Leo said:


> If you don't understand that, and IT capacity & performance testing methodology, then why comment on my post in the first place?



Wasn’t me the one that implies other people don’t understand things? Kettle/pot?



Leo said:


> Let's stick with this one.... Please quote your sources. Once we sort that out, we can move on to the other aspects and I'll post research articles for UBA and references for IT systems performance testing.


You can start from here and follow the references 






						Complex adaptive system - Wikipedia
					






					en.m.wikipedia.org


----------



## Duke of Marmalade

WolfeTone said:


> But it will never, ever reach its "true worth of zero", because it is doomed to be highly unstable.
> It cant be both? Both stable and doomed to be highly unstable?


_Wolfie_ I am going to bully you with a bit of math.
Fishers Equation:
MV = PT
Here M is the supply of money and P is the price of goods in that money. V and T constitute demand. 
If M is fixed then as demand varies, as it always will, P has to take up the slack.  Central banks target a stable devaluation of the price, they do so by tampering with the supply of money and its demand.
When M is fixed there is only one possibility for stability of the price and that is zero, when of course the demand attributes also become zero and Fishers Equation becomes M x 0 = 0 x 0

Of course Fishers Equality is in the context of money as a medium of exchange.  Bitcoin is 99% a medium of speculation, which only serves to make the price even more unstable until it reaches ultimate RIP at zero.


----------



## Leo

Gus1970 said:


> My assertion are backed up by research and science, you can find them within complex adaptive systems literature



You are misunderstanding your own weak references so. You suggest Bitcoin is 'a complex adaptive system'. I'm not arguing that point, but you go on to claim that means 'as such there is no way of predicting its future behaviour.'  It is here you are mistaken. Bitcoin in its entirely is governed by strict rules, that makes if very easy to model how that system will function.

Such modelling and testing of complex IT systems is commonplace, tools like LoadRunner, NeoLoad, jMeter, etc. are used in large development houses every day to test various load scenarios for the software they produce. Various scenarions for user behaviour patters are all configured via scripts and input parameters. 

Your Wiki reference states complex adaptive system 'is a system in which a perfect understanding of the individual parts does not automatically convey a perfect understanding of the whole system's behavior.'  I don't see how that is relevant? The entire Bitcoin system is very well understood, go to GitHub and look at the source code for yourself. 

You also suggested that science says human interaction with systems like Bitcoin is unpredictable. You haven't backed that claim up with anything. 




Gus1970 said:


> Well, you got short memory, in fact my answer to your message only quoted this question you asked:
> 
> <leo\>Is there a point where the halvings mean it's no longer profitable to run anywhere?</leo>
> 
> To which i replied it can’t be known



Hint, take a look at the calculator I linked to previously. That'll give you a good indication.


----------



## WolfeTone

Thanks Duke. But would I be correct in saying that bitcoin supply is not fixed until 2140? 
Arguably, the supply of oil and gas is fixed, or at least along way short of being replenished to levels that would in anyway adequately meet current demand. Hence the "true value" of oil and gas must be zero. Correct?



Duke of Marmalade said:


> If M is fixed then as demand varies, as it always will, P has to take up the slack. Central banks target a stable devaluation of the price, they do so by tampering with the supply of money and its demand.



Nobody is disputing the tampering with the supply of money and its demand. What is being relayed to you, is that such tampering is obviously artificial and is set to a series of changeable rules that basically are in the hands of a few dozen decision makers at best.  
In turn, the bauld Caitlin, pointing out that this will result in investor misallocation of capital, serving to destabilize the system at future points. Such misallocation is, from my perspective is at an all time high, given the level of frequency in which banks throughout the developed world are being caught with their pants down in some shady and fraudulent activities. 
So central banks can target price stability all they want, the inevitability of their shortcomings is system instability. This system instability is easily recognizable in a number of ways. House price inflation v wages stagnation, bond yields and negative interest rates, all time record high stock markets in the US, sluggish or moderate growth rates, increasing debt levels - sovereign, personal, corporate. 
The CB's traditionally use the interest rate as a tool to control the inflation rate. These days however, CB's are trying to manage inflation in order to control the interest rate. 
Its all a bit back-to-front these days, but I don't make the rules.


----------



## Gus1970

Leo said:


> You are misunderstanding your own weak references so. You suggest Bitcoin is 'a complex adaptive system'. I'm not arguing that point, but you go on to claim that means 'as such there is no way of predicting its future behaviour.'  It is here you are mistaken. Bitcoin in its entirely is governed by strict rules, that makes if very easy to model how that system will function.
> 
> Such modelling and testing of complex IT systems is commonplace, tools like LoadRunner, NeoLoad, jMeter, etc. are used in large development houses every day to test various load scenarios for the software they produce. Various scenarions for user behaviour patters are all configured via scripts and input parameters.
> 
> Your Wiki reference states complex adaptive system 'is a system in which a perfect understanding of the individual parts does not automatically convey a perfect understanding of the whole system's behavior.'  I don't see how that is relevant? The entire Bitcoin system is very well understood, go to GitHub and look at the source code for yourself.
> 
> You also suggested that science says human interaction with systems like Bitcoin is unpredictable. You haven't backed that claim up with anything.
> 
> 
> 
> 
> Hint, take a look at the calculator I linked to previously. That'll give you a good indication.



I am happy for you to stick to your certainties, I'll stay with my doubts. Have a great day


----------



## Leo

Knowledge is a great thing, it can go some way towards eliminating doubt.


----------



## Duke of Marmalade

WolfeTone said:


> Thanks Duke. But would I be correct in saying that bitcoin supply is not fixed until 2140?


Jayz, do I need a lawyer to vet my posts    I understand that there are c.17m btc now that they are on a certain trajectory to be 21m at some stage in the future.  To all practical intents M is fixed so far as Fishers Equation is concerned.


> Arguably, the supply of oil and gas is fixed, or at least along way short of being replenished to levels that would in anyway adequately meet current demand.


 No argument about it and so the price follows demand despite the efforts (e.g. OPEC) to manage supply. 





> Hence the "true value" of oil and gas must be zero. Correct?


Where on earth is this non sequitur coming from? I have pointed out that according to Fishers Equation (which is common sense) the only stable price when the supply is fixed is when the price is zero and demand is zero (fixed non zero demand, in which case supply, demand and price are all fixed, is theoretically possible, but this is wholly unrealistic for a currency.) Oil et al does have intrinsic value and therefore will always be in demand (barring step changes in technology) and I am afraid its limited supply does imply price volatility.  If bitcoin has intrinsic value then its limited supply destines its price to be for ever unstable.  However, if the satoshi drops and folk recognise it has no value its price will stabilise at zero.



> Nobody is disputing the tampering with the supply of money and its demand. What is being relayed to you, is that such tampering is obviously artificial and is set to a series of changeable rules that basically are in the hands of a few dozen decision makers at best.
> In turn, the bauld Caitlin, pointing out that this will result in investor misallocation of capital, serving to destabilize the system at future points. Such misallocation is, from my perspective is at an all time high, given the level of frequency in which banks throughout the developed world are being caught with their pants down in some shady and fraudulent activities.
> So central banks can target price stability all they want, the inevitability of their shortcomings is system instability. This system instability is easily recognizable in a number of ways. House price inflation v wages stagnation, bond yields and negative interest rates, all time record high stock markets in the US, sluggish or moderate growth rates, increasing debt levels - sovereign, personal, corporate.
> The CB's traditionally use the interest rate as a tool to control the inflation rate. These days however, CB's are trying to manage inflation in order to control the interest rate.
> Its all a bit back-to-front these days, but I don't make the rules.


These are all Shortie points which are debated elsewhere but it is a complete non sequitur (again) to infer that because Libra is tied to fiat it is systemically unstable.


----------



## Gus1970

Leo said:


> Knowledge is a great thing, it can go some way towards eliminating doubt.


I'm the smartest man in Athens because i know that I know nothing


----------



## tecate

Duke of Marmalade said:


> Jayz, do I need a lawyer to vet my posts


Eh, if yer going to be rolling out Fischers Equation on a regular basis, then you'll need 2 seniors, 2 juniors, a gaggle of garden variety lawyers and I'd throw in a security detail just to be on the safe side, your dukeness.



Duke of Marmalade said:


> but it is a complete non sequitur (again) to infer that because Libra is tied to fiat it is systemically unstable.


No it's not.  Systemically, Bitcoin is set.  It's as clear as night and day how it's set for years to come.  At a given moment, you don't know what the story is with FIAT currency.  CB's tinker with it on an ongoing basis.  It's logical to believe that over time, FIAT currency will face a systemic crisis.  We know this from past performance.


----------



## WolfeTone

Duke of Marmalade said:


> I understand that there are c.17m btc now that they are on a certain trajectory to be 21m at some stage in the future. To all practical intents M is fixed so far as Fishers Equation is concerned.



Yes, like oil and gas. Of course that streaming of that supply is not fixed today, which adds a variable to the equation you have endorsed, because both supply and demand are fluctuating at all times, and will do for the foreseeable future. Making Fishers equation an efficient tool to determine a stable price of zero when demand is zero, but inefficient to determine a stable price of zero at all other times.



Duke of Marmalade said:


> I have pointed out that according to Fishers Equation (which is common sense) the only stable price when the supply is fixed is when the price is zero and demand is zero



You needed Fishers equation to figure that out? 




Duke of Marmalade said:


> Oil et al does have intrinsic value and therefore will always be in demand (barring step changes in technology) and I am afraid its limited supply does imply price volatility. If bitcoin has intrinsic value then its limited supply destines its price to be for ever unstable. However, if the satoshi drops and folk recognise it has no value its price will stabilise at zero.



Back to the 'intrinsic value' argument. I'm sure this has been trashed out to the death at this point. But notably you offer up the prospect "If bitcoin has intrinsic value...." which differs from earlier comment of "its true value which is zero". Ok, I'm being pedantic, but sometimes it is the nuances that shed light for discoveries to be found.



Duke of Marmalade said:


> These are all Shortie points which are debated elsewhere but it is a complete non sequitur (again) to infer that because Libra is tied to fiat it is systemically unstable.



That is just opinion, and you are of course entitled to it. Myself, and the bauld Caitlin and others, will have to disagree with you on that.


----------



## Leo

Gus1970 said:


> I'm the smartest man in Athens because i know that I know nothing



A mistranslation at best. Vert apt.


----------



## Duke of Marmalade

tecate said:


> No it's not.  Systemically, Bitcoin is set.  It's as clear as night and day how it's set for years to come.  At a given moment, you don't know what the story is with FIAT currency.  CB's tinker with it on an ongoing basis.  It's logical to believe that over time, FIAT currency will face a systemic crisis.  We know this from past performance.


We are trying to grab ownership of "systemically" here and maybe we should set out a ground set of definitions.  I took Caitlin's interpretation to mean that it's system was stable meaning secure and well defined and all that.  No reason why Libra qua system cannot be equally secure and well defined.  Libra is tied to fiat which has systemic difficulties from time to time.  Bitcoin is tied to Hot Air.
Caitlin thought she had come up with a smartass trophy for bitcoin:  in the blue corner representing quasi price stability fiat and Libra, in the red corner our hero representing systemic stability, no less, is bitcoin.  Turnips versus Gold.


----------



## tecate

Duke of Marmalade said:


> We are trying to grab ownership of "systemically" here and maybe we should set out a ground set of definitions.  I took Caitlin's interpretation to mean that it's system was stable meaning secure and well defined and all that.  No reason why Libra qua system cannot be equally secure and well defined.  Libra is tied to fiat which has systemic difficulties from time to time.  Bitcoin is tied to Hot Air.
> Caitlin thought she had come up with a smartass trophy for bitcoin:  in the blue corner representing quasi price stability fiat and Libra, in the red corner our hero representing systemic stability, no less, is bitcoin.  Turnips versus Gold.


Ok, well here's one for you, your dukeness.  All FIAT currencies fail - it's just a question of when.  Turnips vs. Gold indeed.


----------



## WolfeTone

Duke of Marmalade said:


> No reason why Libra qua system cannot be equally secure and well defined. Libra is tied to fiat which has systemic difficulties from time to time.



So you apply value (prospective, at least) to Libra?
You may not see any usage for it for yourself, but you can at least see how it may have usage in developing countries?


----------



## Duke of Marmalade

WolfeTone said:


> So you apply value (prospective, at least) to Libra?
> You may not see any usage for it for yourself, but you can at least see how it may have usage in developing countries?


Libra has potential and that's why the authorities seem to be more scared of it than of bitcoin.  Libra is potentially unregulated fiat despite their commitment to co-operate with regulators.  It is a genuine product with intrinsic value and devoid of any speculative significance.  If I was a duke in Venezuala I would love to be able to stash away some in Libra, though I would probably prefer dollars.  I would be scared stiff of bitcoin - even enthusiasts do not dismiss the possibility that it could drop 80% over the next 12 months.


----------



## WolfeTone

Im starting to think that the Duke & co have given themselves a 120yr window (2140) to be proven correct about bitcoins price returning to its "true value" of zero.

Ah, cmon, say it ain't so? When I told everybody that Marc Kenny (who?) would be the next Liam Brady, it was under the premise that it would occur in 5 to 10yrs. He is 46 now. Its still a possibility, but I have consigned myself to the realisation that its not going to happen, and that I was wrong.

But we have definite assertions, backed up with mathematical equations that bitcoin has no value, and will return to zero.
Surely there is a reasonable timeframe in which this will manifest itself? Surely we are not relying on technological advances to replace bitcoin, in the same way as the CD replaced vinyl? Or Libra to replace bitcoin, as it itselfs asserts that it can provide price stability and scalability that bitcoin and others have failed to do.
If Libra answers the questions that bitcoin has thus far failed to do (I dont think it will, it will compliment bitcoin) and fulfills its vision, then it will replace bitcoin as a global cryptocurrency that has given the masses of unbanked and on the fringes of the financial system real autonomy over their financial affairs. And all because, before it, bitcoin was invented. That it, bitcoin, has no value is surely a redundant argument?


----------



## tecate

Duke of Marmalade said:


> Libra has potential and that's why the authorities seem to be more scared of it than of bitcoin.  Libra is potentially unregulated fiat despite their commitment to co-operate with regulators.  It is a genuine product with intrinsic value and devoid of any speculative significance.  If I was a duke in Venezuala I would love to be able to stash away some in Libra, though I would probably prefer dollars.  I would be scared stiff of bitcoin - even enthusiasts do not dismiss the possibility that it could drop 80% over the next 12 months.


I watched the House Committee on Finance session earlier today when they hauled in David Marcus of Libra/Facebook.  We're talking about politicians so it's to be expected that there were some of them that were totally clueless (like the guy that had to google "FIAT" in the middle of proceedings to find out what it meant).  There were many of them grandstanding (just wanted to present a certain optic by flaming him about Facebook's previous misdemeanors).  However, there were quite a few forward thinking congressmen who understand the innovative proposition that both Bitcoin and Libra bring.  The immediate urgency is with Libra as Facebook has an immediate market of 2.4 Billion customers to pimp it to.

However, whilst they'll want it on their terms, I didn't find them stuck in the past.  Here's a couple of them..









						Congressman Tom Emmer Damns Libra, Supports Bitcoin - 07/17/2019
					

This channel is mostly dedicated to Cryptocurrency related video`s. Tip address: 34oFq3wNcs7wHMmhvCZBkiZh7AjfVNS12x -------------------------original clip fr...




					youtu.be
				












						Rep. Patrick McHenry: 'There's no capacity to kill Bitcoin'
					

Rep. Patrick McHenry (R-N.C.), ranking member of the Financial Services Committee, joins "Squawk Box" to discuss the tech hearing on Capitol Hill.




					youtu.be
				




Tech and innovation wait for no-one.



			
				WolfeTone said:
			
		

> Im starting to think that the Duke & co have given themselves a 120yr window (2140) to be proven correct about bitcoins price returning to its "true value" of zero.


They may as well - but it won't matter.  One of those two congressmen that I've referred to above (McHenry) had this to say earler today:

_“The world that Satoshi Nakamoto, author of the Bitcoin white paper, envisioned is an unstoppable force. We should not attempt to deter this innovation. And those that have tried have already failed.”_


----------



## Duke of Marmalade

tecate said:


> I watched the House Committee on Finance session earlier today when they hauled in David Marcus of Libra/Facebook.  We're talking about politicians so it's to be expected that there were some of them that were totally clueless (like the guy that had to google "FIAT" in the middle of proceedings to find out what it meant).  There were many of them grandstanding (just wanted to present a certain optic by flaming him about Facebook's previous misdemeanors).  However, there were quite a few forward thinking congressmen who understand the innovative proposition that both Bitcoin and Libra bring.  The immediate urgency is with Libra as Facebook has an immediate market of 2.4 Billion customers to pimp it to.
> 
> However, whilst they'll want it on their terms, I didn't find them stuck in the past.  Here's a couple of them..
> 
> 
> 
> 
> 
> 
> 
> 
> 
> Congressman Tom Emmer Damns Libra, Supports Bitcoin - 07/17/2019
> 
> 
> This channel is mostly dedicated to Cryptocurrency related video`s. Tip address: 34oFq3wNcs7wHMmhvCZBkiZh7AjfVNS12x -------------------------original clip fr...
> 
> 
> 
> 
> youtu.be
> 
> 
> 
> 
> 
> 
> 
> 
> 
> 
> 
> 
> 
> Rep. Patrick McHenry: 'There's no capacity to kill Bitcoin'
> 
> 
> Rep. Patrick McHenry (R-N.C.), ranking member of the Financial Services Committee, joins "Squawk Box" to discuss the tech hearing on Capitol Hill.
> 
> 
> 
> 
> youtu.be
> 
> 
> 
> 
> 
> Tech and innovation wait for no-one.
> 
> 
> They may as well - but it won't matter.  One of those two congressmen that I've referred to above (McHenry) had this to say earler today:
> 
> _“The world that Satoshi Nakamoto, author of the Bitcoin white paper, envisioned is an unstoppable force. We should not attempt to deter this innovation. And those that have tried have already failed.”_


Not sure this post is in the right thread.  Anyway, you might take solace from a random congressman seeking cheap coverage for his passion for innovation.  I personally prefer to listen to those who actually understand the subject.


			
				Bitcoin magazine said:
			
		

> The vast majority of economists seem to have a serious distaste for Bitcoin. Whenever an economist who has received a Nobel Prize, teaches at an Ivy League school or works at a central bank comments on Bitcoin, they always seem to have something negative to say about the technology. Some of these individuals simply say that Bitcoin has no future whatsoever, while others go as far as to claim it is pure evil.


 Of course Bitcoin magazine is a big evangelist of said currency and sees this consensus of the economics community as tantamount to persecution.

The second YouTube link had a very relevant observation.  The guy was pointing out that if Bitcoin ever gained escape velocity (and became a true global currency) the authorities would shoot it down, and oh yes it would still have an existence in the Dark Web.  Several takeaways from this.
1.  Yes indeed, if the authorities act they can severely curtail internet activity.  I should know, I spend a lot of time in France and find it nearly impossible to get a bet on the internet without using the State run PMU.
2.  That there has been 10 years and no real attention paid by the authorities to bitcoin, shows that they are quite complacent about bitcoin ever achieving escape velocity.  It is the bigger threat of Libra that is grabbing their attention.
3.  But as the commentator pointed out if it ever showed signs of achieving that breakthrough the authorities (representing you and me) would shoot it down.
4.  With less than 1% of transactions actually buying things I would say bitcoin has scarcely reached the top of Hill 16, never mind achieving escape velocity.


----------



## WolfeTone

Shutting down the internet, or curtailing activities in order to inhibit bitcoin does not amount to bitcoin having no value. It merely reduces its value to zero or next to it, being the reason to curtail its activities.
The same could be said if authorities revoked banking licences, blocked trading between banks and ordered shutdown of ATMS. How much would would your money be worth then if you couldn't access it to buy stuff?


----------



## Duke of Marmalade

WolfeTone said:


> Shutting down the internet, or curtailing activities in order to inhibit bitcoin does not amount to bitcoin having no value. It merely reduces its value to zero or next to it, being the reason to curtail its activities.
> The same could be said if authorities revoked banking licences, blocked trading between banks and ordered shutdown of ATMS. How much would would your money be worth then if you couldn't access it to buy stuff?


_Wolfie_ I find your logic to be in a parallel universe from mine. Of course, I might be the outlier but I hope you will accept my apology for giving up the challenge of addressing the points in your universe.


----------



## WolfeTone

That is perfectly fine Duke. I can summarise your reasoning as to why bitcoin has no value;




Using mathematical equations such as the Fisher equation, inappropriately.
That, bizarrely imo, the opinions of economists must be elevated above the expert opinions of anyone else.
New technologies are not to be considered as having any value until such time as it can be shown that it is the finished product. Would Libra (which you admit has prospective value) exist if it weren’t for bitcoin? Page 1 of the Libra Whitepaper.
“_Blockchains and cryptocurrencies have a number of unique properties that can potentially address some of the problems of accessibility and trustworthiness. These include distributed governance, which ensures that no single entity controls the network; open access, which allows anybody with an internet connection to participate; and security through cryptography, which protects the integrity of funds.”_
That if bitcoin does ever gain significant traction into the world of commerce, US authorities will start shooting down satellites to bring it to heel.
The price afforded to the value of new emerging technologies (if any) should not be determined by traditional methods of supply and demand.
But Im ok with this disengagement. Like I said before, you only have to be right once (about bitcoins value and its associated price), the years of being wrong about its demise will evaporate into hot air. The window of opportunity you have afforded to yourself to calling it right is yours to define.


----------



## tecate

Duke of Marmalade said:


> Anyway, you might take solace from a random congressman seeking cheap coverage for his passion for innovation.  I personally prefer to listen to those who actually understand the subject.


Random?  I watched the whole hearing.  There were quite a few that were extremely knowledgeable on the subject.  As regards innovation, you misunderstand completely.  If it wasn't for the innovative angle, they'd have shut this down long since.  Say what you might about the yanks but they are savvy enough never to stymie innovation.



Duke of Marmalade said:


> Of course Bitcoin magazine is a big evangelist of said currency and sees this consensus of the economics community as tantamount to persecution.


You quoted something from 2016?  2016 your dukeness?  You realise this space moves fast right?  I've seen attitudes change considerably over the past 12-18 months - never mind 3 years.



Duke of Marmalade said:


> The second YouTube link had a very relevant observation.  The guy was pointing out that if Bitcoin ever gained escape velocity (and became a true global currency) the authorities would shoot it down, and oh yes it would still have an existence in the Dark Web.


This is the guy (McHenry) who said that Bitcoin was unstoppable?  I made the point that they find the greater urgency with Libra as Facebook has the 2.4 Billion users that they can pimp this to.  But there was also an understanding that to ban it will mean that innovation moves off shore.   



Duke of Marmalade said:


> 1.  Yes indeed, if the authorities act they can severely curtail internet activity.  I should know, I spend a lot of time in France and find it nearly impossible to get a bet on the internet without using the State run PMU.


And you arent savvy enough to use a $3/month vpn?  Curtailed, yes.  Stopped - no.  They recognised that it's "unstoppable".  They also recognised that they would be throwing the baby out with the bathwater (i.e. doing away with innovation in the process).


Duke of Marmalade said:


> 2.  That there has been 10 years and no real attention paid by the authorities to bitcoin, shows that they are quite complacent about bitcoin ever achieving escape velocity.  It is the bigger threat of Libra that is grabbing their attention.


There's a couple of things here.  First, I made this point myself - i.e. that Libra becomes the more immediate concern as Facebook have the 2.4 billion users to onboard with this.  Isn't that the whole point?   Second, yes they've been complacent.  Congressman Enmer said exactly that - that they were both complacent and behind the times.  They got the message that Switzerland was the choice for the Libra Foundation because the U.S. is behind in putting in train up to date and fit for purpose regulation.  Securities laws from the 1940's are not going to be fit for purpose for a technology and fintech innovation that has come along decades later.  Many of them get this as some of them are backing legislation to address this.


Duke of Marmalade said:


> 3.  But as the commentator pointed out if it ever showed signs of achieving that breakthrough the authorities (representing you and me) would shoot it down.


'Shoot it down' appear to be your words.  How would that commentator come up with that when he actually said that Bitcoin was 'unstoppable'?  Sure, there's going to be a level of a battle on this KYC/AML nonsense but not to the extent that they will ban it.  They know that will be an own goal.



Duke of Marmalade said:


> 4.  With less than 1% of transactions actually buying things I would say bitcoin has scarcely reached the top of Hill 16, never mind achieving escape velocity.


Over the past month, it has achieved a trading volume of $770 billion.  In terms of consumer transactions, sure its a drop in the ocean.  That is but one use case.  Secondly, as needs to be mentioned with you in every instance, because it can't do it today doesn't mean that it won't and isn't getting there (overall - in terms of a number of use cases).  It's been widely understood that applications wouldn't be built on the Bitcoin network which makes sense as its programming language is very limited in that respect.  And yet, technologists are finding a way to do exactly that too.  A recent example is Microsoft's project to develop a digital identity system on top of the Bitcoin blockchain network.  

AI has been a coming force for years and years.  If we were to take your view with it, then it would have been killed off at birth.  Yet, right now - there are nothing but profound life changing use cases emerging right now - implicating the use of that technology.   Technology needs a certain time and space to develop in - something that you're not prepared to allow it - it seems.  That's a mistake on your part.

My takeaway from that hearing is very bullish and that's the view right throughout the sector.


----------



## Duke of Marmalade

tecate said:


> Random?  I watched the whole hearing.  There were quite a few that were extremely knowledgeable on the subject.  As regards innovation, you misunderstand completely.  If it wasn't for the innovative angle, they'd have shut this down long since.  Say what you might about the yanks but they are savvy enough never to stymie innovation.


Fair enuff.




> You quoted something from 2016?  2016 your dukeness?  You realise this space moves fast right?  I've seen attitudes change considerably over the past 12-18 months - never mind 3 years.


Yes, I just Googled this morning.  I have to admit that one of my greatest confirmations that bitcoin is BOTHA has been the consensus of the vast majority of economic thinking.  I would till be in the BOTHA camp if it shifted to 50/50 but if it swung the other way to the vast majority supporting it, I would have to rethink.  Have you any sense were the spectrometer of mainstream economic thinking is today? Can you point to any significant converts to the faith?



> This is the guy (McHenry) who said that Bitcoin was unstoppable?  I made the point that they find the greater urgency with Libra as Facebook has the 2.4 Billion users that they can pimp this to.  But there was also an understanding that to ban it will mean that innovation moves off shore.


Fair enuff




> And you arent savvy enough to use a $3/month vpn?


 Actually, this very day Express VPN are looking for a $13 monthly renewal    I don't think I'll bother, its BBC coverage is awful (fits and starts) but I digress.  Of course, there is much worse activity on the internet than betting and I think such activity is kept very fringe, but like everything else illegal never completely eradicated.  If bitcoin achieved escape velocity it would be a threat to monetary management (in yours and mine interests) so I agree with the implication (possibly unintended) of the commentator that it is doomed never to be allowed to get escape velocity.





> Over the past month, it has achieved a trading volume of $770 billion.  In terms of consumer transactions, sure its a drop in the ocean.  That is but one use case.  Secondly, as needs to be mentioned with you in every instance, because it can't do it today doesn't mean that it won't and isn't getting there (overall - in terms of a number of use cases).


The point of my particular comment was to take up the observation of the commentator that it could be stopped by the authorities if it ever looked like taking off.



> AI has been a coming force for years and years.  If we were to take your view with it, then it would have been killed off at birth


 That sounds like _Wolfie _logic.  Oh dear, maybe I am the outlier.  There have in fact been over 7,000 innovations in crypto space.  In general the authorities couldn't give a damn, let the nerds have their fun is the attitude, and also they are confident it is very unlikely to ever threaten mainstream monetary systems and if it ever did it can easily be effectively closed off.  Libra is a different kettle of fish, this does give them concern, for the reasons you have explained.

The crypto community are a resilient lot indeed.  Libra, to me, runs contrary to mainstream crypto orthodoxy but it is interesting that in an attempt to see the silver lining they all seem to herald Libra as a boost for the real deal which is bitcoin (or Ripple or Ethereum or Grandson of Bitcoin or anything you like from the over 7,000 true blood cryptos).


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## tecate

Duke of Marmalade said:


> Yes, I just Googled this morning.  I have to admit that one of my greatest confirmations that bitcoin is BOTHA has been the consensus of the vast majority of economic thinking.  I would till be in the BOTHA camp if it shifted to 50/50 but if it swung the other way to the vast majority supporting it, I would have to rethink.  Have you any sense were the spectrometer of mainstream economic thinking is today?


I know that there are economists on either side of that fence.  Quantifying it is difficult.  However, what's more difficult still is to figure out to what extent they understand the technology.  As an example, Paul Krugman himself admitted whilst slating Bitcoin last year that he didn't know much about it and knew nothing about any other cryptocurrency project.  
Secondly, if you are thinking about central bankers in terms of 'mainstream economic thinking' then you will be following that 'confirmation' until the bitter end - turkeys don't have a good view of Christmas.  I'm not saying central banking is finished by the way - but I am saying that decentralised crypto runs outside of that system  - and for that reason, they're never going to have a good feeling about it.



Duke of Marmalade said:


> Actually, this very day Express VPN are looking for a $13 monthly renewal    I don't think I'll bother, its BBC coverage is awful (fits and starts) but I digress.


Yer being robbed.  I guess mine is an NSA approved service but it works fine for much less.



Duke of Marmalade said:


> If bitcoin achieved escape velocity it would be a threat to monetary management (in yours and mine interests) so I agree with the implication (possibly unintended) of the commentator that it is doomed never to be allowed to get escape velocity.


Which of them said it was 'doomed'?  McHenry said that it was 'unstoppable' - and that many attempts had been made to stop it in its tracks and had failed miserably.  



Duke of Marmalade said:


> The point of my particular comment was to take up the observation of the commentator that it could be stopped by the authorities if it ever looked like taking off.


My take on that is that they will not stop it.  They understand that it brings with it innovation.  They understand that its going offshore if they try and stymie it.  They understand that attempts have been made to stymie it already and those attempts have failed.



Duke of Marmalade said:


> That sounds like _Wolfie _logic.  Oh dear, maybe I am the outlier.  There have in fact been over 7,000 innovations in crypto space.  In general the authorities couldn't give a damn, let the nerds have their fun is the attitude, and also they are confident it is very unlikely to ever threaten mainstream monetary systems and if it ever did it can easily be effectively closed off.


That's not what I heard.  They realise that this is disrupting technology.  



Duke of Marmalade said:


> Libra is a different kettle of fish, this does give them concern, for the reasons you have explained.


Libra has the opportunity to springboard off of 2.4 billion users, a hat full of money and a federation of companies that are in a strong position to pimp it.



Duke of Marmalade said:


> The crypto community are a resilient lot indeed.  Libra, to me, runs contrary to mainstream crypto orthodoxy but it is interesting that in an attempt to see the silver lining they all seem to herald Libra as a boost for the real deal which is bitcoin



It's not just 'silver lining'.  It's tangible.  This week has brought discussion of Bitcoin and (actual) cryptocurrency  front and centre - via The Donald, Treasury Secretary Stevie Munchkin's press conference, a full days hearing in the Senate and a full days hearing in Congress.  

Libra was the catalyst and Libra was the actual subject for discussion - yet no discussion was had without consideration of Bitcoin/actual crypto.  So - whilst anyone who has been involved with crypto doesn't see Libra as anything other than  a sh1tcoin (another term that became part of House of Congress records), it's serving its purpose quite nicely.  They can fail and it would still have been useful for actual crypto.  They won't fail though - they'll get the go ahead in the end.  Anyone who is onboarded and gets comfortable with Libra is just as likely to make the leap to actual crypto.  
In the meantime, very few are laughing at crypto anymore.


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## noproblem

Could it be that the NYSE is trying to put a value on Bitcoin?  Maybe, just maybe, the people who continue to believe that Bitcoin has and never will have a value may be proved wrong and the "ahem" fools who bought a piece of the action might get a return? 
There's a little piece in the corner of a page of today's Indo Business supplement under Cryptocurrency that makes interesting reading.


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## tecate

noproblem said:


> Could it be that the NYSE is trying to put a value on Bitcoin?  Maybe, just maybe, the people who continue to believe that Bitcoin has and never will have a value may be proved wrong and the "ahem" fools who bought a piece of the action might get a return?
> There's a little piece in the corner of a page of today's Indo Business supplement under Cryptocurrency that makes interesting reading.


Yes, that's in relation to Bakkt.  They've finally gotten the green light from the regulator - with Bitcoin futures to be traded towards the end of September.  There has been a Bitcoin futures market for some time (CME) but the difference in this instance is that these will be physically settled Bitcoin futures.

There are also some interesting tie-ups with Microsoft and Starbucks as part of the initiative so it will be interesting to watch as it develops.  Bakkt is owned by ICE (intercontinental exchange) - the owners of the NYSE.  It will add considerable legitimacy to the trading aspect of cryptocurrency.  Due to regulators messing about, the launch of this product has been delayed by 9 months +.  It's a shot in the arm for the sector to finally have it launch.

In terms of speculation, it is going to remain high risk for many years to come.  However, in the current climate, I also think it's foolish not to have 5% of funds in crypto (so long as the individual does their due diligence and gets a basic grasp of what's involved beforehand).  As regards the stage it's at, many people thought they had missed the boat when it went to 1 dollar, 100 dollars and 1000 dollars.  The reality is that this is still very very early.

The Chinese are preparing to launch their own digital currency having effectively banned Bitcoin (at least, the exchanges...yet Chinese related trading is still significant).  Facebook are launching their own and Walmart has patented its own.  All good activity in the space - even though these are not decentralized cryptos.  I expect a decent percentage of people will see that as they come to use them.


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