# Major fall in BTC price (16th Jan)



## jhegarty

Looks like the crash has arrived.

Currently 25% off of the day ($13607 opening to $10250).


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## Brendan Burgess

Hi J

I wouldn’t be so sure yet.  It’s vollatility is extreme. It could recover tomorrow. 

Brendan


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## fpalb

The bull case: January often has a dip, people sell after holding off until a new tax year, people sell for Chinese new year. If 10k can hold this could be one of the usual 50% retraces bitcoin has from local tops and the bull market resumes in Feb or March.

The bear case: we've had a series of lower lows and lower highs since mid -December, if 10k breaks with conviction we'll probably fall quickly to the 5k-8k range, if there's no bounce from there the bull market is over and 20k was the top of this 'bubble'.

Don't be surprised by either scenario playing out.


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## BreadKettle

About time really, writing on the wall for this correction for ages.


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## TheBigShort

Never a dull moment...


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## Sarenco

So are you guys still arguing that BTC is a reliable store of value?

Do you think this is just a short term dip?


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## TheBigShort

Its a volatile store of value, for sure. Im not sure who argued it was 'reliable'?
The price fluctuations are there for everyone to see.


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## BreadKettle

Sarenco said:


> So are you guys still arguing that BTC is a reliable store of value?
> 
> Do you think this is just a short term dip?



There's nothing unusual about what happened today (well some alts got destroyed but for BTC). It's actually almost unsatisfying, as I was expecting 8k.


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## Sarenco

I didn't think anything unusual happened today.

I just wondered if you still thought BTC was a reliable store of value.  

Do you?


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## MrEarl

Incredibly volatile over the last 24 hours.

At about 10.25pm on 16th, it was €8.3k on Coinbase and I was expecting it to then drop below €8k, but it made a bit of a recovery.  Approx 6 hours later, it's €9k.

No doubt some of the gamblers made big money over the last 24 hours, but others have probably taken a bath (assuming they had to crystalise losses) ....

Not for widows and orphans, as they say


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## Leo

This drop is linked to China's announcements of plans to block all domestic access to cryptocurrency platforms and exchanges. Given how large a part China has played up to now in this market, there are some fears users there will look to offload their holdings while they still can.


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## galway_blow_in

i dont think id sleep a wink at night if i owned something as volatile ,add to that not having a clue how to fairly value it


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## Brendan Burgess

galway_blow_in said:


> add to that not having a clue how to fairly value it



Many of us have told you how to value it.

It’s worth nothing.  This is clear to anyone not caught up in the mania.

Brendan


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## TheBigShort

From my perspective I have no idea what the 'true' value of bitcoin is. But I'm pretty confident it is not going to go away anytime soon. My understanding of bitcoin is that it stands outside of the 'regulated' financial system and uses the blockchain technology to provide  trustless transactions - i.e it doesn't need regulation.

So it is somewhat ironic that stories of 'crackdowns' and 'regulations' have spooked at lot of buyers. To me, it indicates that they 1) they don't understand what it is and 2) they were in it for the speculative ride.

For me, I see it as an alternative store of value outside of traditional stores such as gold, art, antiques etc. Notwithstanding its current volatility, that potential remains despite the current sell-off.


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## Sarenco

TheBigShort said:


> a volatile store of value


Surely that's a contradiction in terms.


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## TheBigShort

Sarenco said:


> Surely that's a contradiction in terms.



Perhaps, but I would consider it early days in the life span of bitcoin. Despite all of its historic price fluctuations, a 4 yr graph of its price level would now suggest that it has had a relatively stable store of value up until the summer of this year.

Its all relative.

If you think that bitcoin has potential for a lot more adoption, then expect more volatility.


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## Firefly

Price seems to be hovering around 10-11k. I wonder if there are supports at this level and once exhausted will the price drop further and suddenly?

A few players are said be the largest holders. Rather than dump everything on the market and bring about a crash, I would expect them to drip feed their holdings. Who is to know whether this is coordinated or not, but surely at some stage, the Prisoner's Dilemma will kick in and it will be each man for himself...


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## galway_blow_in

Brendan Burgess said:


> Many of us have told you how to value it.
> 
> It’s worth nothing.  This is clear to anyone not caught up in the mania.
> 
> Brendan



Glad I don't own or want any so


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## Firefly

Price now $9,790 - I believe this is the first time that the 10k price has been breached...since Nov.

Price now 50% down in the last month. 

Some store of value!


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## Firefly

Leo said:


> Yep, where the issues arise is in transferring money into or attempting to take it out of Bitcoin. Those transactions need to comply with whatever anti-money laundering legislation is in place in the local market, and that's causing some problems now. Also, US regulations cover the operation and management of crypto exchanges as evidenced in the Silk Road take down. So while money already in Bitcoin can move regulation free, putting it in, or getting it out is facing increasing hurdles.



I wonder if any of those with holdings here are having any difficulties in buying  / selling  at the moment?


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## Firefly

Firefly said:


> Price now $9,790



$9,594 now - another $200


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## Firefly

Firefly said:


> $9,594 now - another $200



$9,517 now. Looks to be in a free fall


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## jhegarty

Some free fall once it hit $10k was to be expected.


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## Firefly

jhegarty said:


> Some free fall once it hit $10k was to be expected.



Yip. Just gone below 9,500 now too so it could probably fall to 9k fast enough


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## landlord

The analysts I have been listening to warned last month of a major correction being on the cards. I feel fortunate partly due to my strategy mentioned on another thread and partly due to these analysts that I sold a chunk near the highs.... I have not bought any more since. Corrections of more than 50 percent have occured many times in the past with Bitcoin and I don’t see anything fundamentally different this time. I would expect a fall to around $7000-$8000 where there is more support.
I am now diversified into other alt coins too, although they have been hit harder.

BS  I am in a similar position to you. Because I sold a chunk the price would have to drop below around 2000 Euro for me to start making a loss on what I have left.


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## TheBigShort

Bitcoin showing signs of stabilising, very little change in the last 8 minutes...is this a buying opportunity?


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## Firefly

Price now back above 10k. Wild swings today. 1am in South Korea & China though so it could be an interesting evening here...


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## RETIRED2017

TheBigShort said:


> Bitcoin showing signs of stabilising, very little change in the last 8 minutes...is this a buying opportunity?



Provided you don't mind having a sleepless night,


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## Firefly

RETIRED2017 said:


> Provided you don't mind having a sleepless night,



I'll sleep like a baby


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## TheBigShort

RETIRED2017 said:


> Provided you don't mind having a sleepless night,



Absolutely. Not a game for the faint-hearted, bitcoin is obviously highly volatile. If you are not prepared to accept steep drops in the price stay away.


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## azerogo

Firefly said:


> I'll sleep like a baby



 waking up every 2 hours crying?


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## landlord

TheBigShort said:


> Bitcoin showing signs of stabilising, very little change in the last 8 minutes...is this a buying opportunity?



It’s interesting they say “when there is fear on the streets that is the time to buy”. 

Sounds easy on paper but in reality  when there is fear on the streets everyone is selling.  Whether it stocks bonds or crypto it’s the same principle.  Climbing that psychological hurdle for most average investors including myself is extremely difficult.  Technically speaking and going from the last several 50 percent corrections in Bitcoin now would be an opportunity to buy.  However even if my strategy was to buy after a 50 percent correction I don’t think I could overcome that psychological hurdle.


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## cremeegg

landlord said:


> Corrections of more than 50 percent have occured many times in the past with Bitcoin and I don’t see anything fundamentally different this time.



The difference, wether it is fundamental or not I don't know, is that a broader pool of investors were pulled in after each successive slump and rebound. Eventually there will not be any further investors to be pulled in.

Have we reached that point now. I dont know. 

If your break even is €2k, and you can sell now for €8k, !!!!


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## RETIRED2017

azerogo said:


> waking up every 2 hours crying?


no point in crying over spilt milk,


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## TheBigShort

cremeegg said:


> If your break even is €2k, and you can sell now for €8k, !!!!



My break-even is just under €3,000. If it falls to less than €2,000 I will start to ponder whether to bailout or not. 
Im actually in bitcoin for the long haul, not as a get rich quick scheme. 
I expect more to be buying again once there is a levelling off on the price.


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## RichInSpirit

IG showing the lowest price hit today 9164. Don't know how accurate their prices are for bitcoin?


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## Gordon Gekko

Perhaps old news for some, but I note the following:

- Coinbase was the most downloaded app in the US in 2017

- The IRS have, to date, received only 800 returns of income or gains in respect of cryptocurrencies

- The IRS have subpoenaed Coinbase for details of all individuals who have transacted cryptocurrencies at a level of $20k or more

#onlyamatteroftime


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## ant dee

IRS is going after tax evaders.
Is that a headline?


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## TheBigShort

Thats an interesting stat about the app download.


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## TheBigShort

jhegarty said:


> Looks like the crash has arrived.
> 
> Currently 25% off of the day ($13607 opening to $10250).



Recovered 10% in 24hrs to$11,294


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## RETIRED2017

TheBigShort said:


> Recovered 10% in 24hrs to$11,294


Good if you are not working go and have a good sleep


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## TheBigShort

RETIRED2017 said:


> Good if you are not working go and have a good sleep



Watching the snooker. I was thinking of cuting my losses on John Higgins earlier but held firm. Still a bit of work to do, but looking good for a win now.


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## RETIRED2017

TheBigShort said:


> Watching the snooker. I was thinking of cuting my losses on John Higgins earlier but held firm. Still a bit of work to do, but looking good for a win now.


Well the best of luck


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## Firefly

Currently at $11,850. Whether this is a dead-cat bounce or a permanent recovery I must say I am surprised people are buying in at this price..


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## Firefly

Interesting graph here : https://www.coindesk.com/price/


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## RETIRED2017

Firefly said:


> Interesting graph here : https://www.coindesk.com/price/
> 
> Click on "All"


Someone making a few euro/Pound now and again every day,


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## Brendan Burgess

RETIRED2017 said:


> Someone making a few euro/Pound now and again every day,



There are traders who are buying and selling for short periods of time thinking that they can predict short term movements. 

No one can. We can predict the long term price of it. But we don't know when it will reach that or the path it will take. 

Brendan


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## RETIRED2017

Brendan Burgess said:


> There are traders who are buying and selling for short periods of time thinking that they can predict short term movements.
> 
> No one can. We can predict the long term price of it. But we don't know when it will reach that or the path it will take.
> 
> Brendan


Thanks I already know   , What is interesting  people who have 400000 in the stock markets growing slowly over several generations panic faster than people who built  up 400000 in bitcoins which has grown by 1500% over a very short time frame may be slower to panic ,


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## jman0war

In fairness people that have been in Bitcoin since 2010 to 2013 will have been very well accustomed to drastic price movements.


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## Brendan Burgess

RETIRED2017 said:


> people who have 400000 in the stock markets growing slowly over several generations panic faster than people who built up 400000 in bitcoins which has grown by 1500% over a very short time frame may be slower to panic



Interesting point, but is it based on any evidence?   It does seem that way, but I am not sure if it is or not. 

Most long term stock market investors don't panic during falls. 

There doesn't seem to be a sense of panic among Bitcoin owners. There should be, though.

Brendan


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## RETIRED2017

Brendan Burgess said:


> Interesting point, but is it based on any evidence?   It does seem that way, but I am not sure if it is or not.
> 
> Most long term stock market investors don't panic during falls.
> 
> There doesn't seem to be a sense of panic among Bitcoin owners. There should be, though.
> 
> Brendan


 A person who bought 20000K worth of bitcoin in January 2017 the same  bitcoin still worth   200000K  today lots still think of it as a 20000K investment  they are not going to sell unless there 20000K is in trouble,


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## Brendan Burgess

It's about $9,500 now which is 50% of its peak of $19.343.

Brendan


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## MrEarl

Brendan Burgess said:


> It's about $9,500 now which is 50% of its peak of $19.343.
> 
> Brendan



That's true Mr. Burgess,

But it's also worth a massive multiple of what it was "worth" when it was first launched.

What's really important is not the current price, but the price that someone paid when they bought their Bitcoin, and the price they get when the sell it, just like buying and selling any other currency (albeit, Bitcoin is far more volatile than most other established currencies, and doesn't have governments supporting it's price etc.).


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## Firefly

My gut tells me there was significant resistance at the 10-11k mark but I think this is now coming to an end. $9,324 at the moment.


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## Firefly

The price has dropped, momentarily, below 9k twice in the past hour. Me thinks 9k is a new resistance point..


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## Brendan Burgess

Firefly said:


> Me thinks 9k is a new resistance point..



With respect, this is a meaningless concept used by technical analysts to explain what happened yesterday. It has no predictive validity


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## Gordon Gekko

It’s below $9k now ($8,800).

I have encountered some morons over the last number of weeks who have borrowed to buy this garbage and whose entire wealth is tied up in it.

Madness, but they’re like a cult and think that nobody “gets it”.

Guess what? That Kool Aid was actually poison.


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## Firefly

Brendan Burgess said:


> With respect, this is a meaningless concept used by technical analysts to explain what happened yesterday. It has no predictive validity


You must be right... $8,600 now so not much resistance it seems.


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## tecate

Gordon Gekko said:


> I have encountered some morons over the last number of weeks who have borrowed to buy this garbage and whose entire wealth is tied up in it.


Anyone who borrows money to 'invest' or 'speculate' is a moron - full stop.  That isn't an exclusive deal related solely to cryptocurrency.  Paddy Power sees 'investments' on a daily basis in Ireland. The same people exist in conventional stocks.  Bear in mind these companies who's share price has gone up because they changed the name and included some buzzword related to cryptocurrency.  That's some research that goes into stock picks by those individuals!

The segment of people you're talking about exist in every space where someone can 'take a punt'.  The media have hyped up these outliers - like the guy in Holland that had remortgaged everything and gone 'all in' on bitcoin, similar example in Australia, yada, yada.  I visited Vegas twice and spent about $1 on the slots - it really didn't interest me (and only went back to show it to some relatives that were visiting me).  That said, I cashed out the other day having made a 4275% gain on a modest initial investment.


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## Brendan Burgess

tecate said:


> That said, I cashed out the other day having made a 4275% gain on a modest initial investment.



Well done.

Would you be prepared to tell your story in a new thread. Why you bought? When you bought? How much you decided to spend? What caused you to get out? 

It could be very interesting generally for people reviewing this mania after the bubble bursts completely.
Brendan


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## tecate

Sure, Brendan - If you think it would be helpful.


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## azerogo

Now at $8500 and continuing to drop.

Bloomberg believe it will drop to $7500 over the next few days, looks like bubble is bursting.


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## Brendan Burgess

azerogo said:


> Bloomberg believe it will drop to $7500 over the next few days,



But they really have no idea. None of us has any idea. We know the destination, but we don't know the route there or the timing. 

It has staged recoveries in the past and could well do so again before it crashes to zero.

Brendan


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## azerogo

Presume they are basing it on crack down on its use in Asia, as well as Facebook banned cryptocurrency adverts and US regulators began investigating Tether, a cryptocurrency that some fear has been used to inflate the value of bitcoin.

Indians finance minister also said this week that the Indian government "does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system."


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## TheBigShort

The basis upon which the Indian finance ministry is to take measures against crypto is “_Late last year, the finance ministry dubbed them a ponzi scheme. “There is a real and heightened risk of investment bubble of the type seen in ponzi schemes which can result in sudden and prolonged crash exposing investors, especially retail consumers losing their hard-earned money,_” the ministry had said. “_Consumers need to be alert and extremely cautious to avoid getting trapped in such ponzi schemes.”_


“_The government will now either come out with a legislative mechanism or make suitable amendment in existing legislation to ensure that dealing and trading in cryptocurrency is made illegal and to penalise entities and individuals who are involved in their trade and circulation,_” said Monish Panda, founder of Monish Panda & Associates law firm. “_We will have to wait and watch as to what will be the final framework of such legislation.”_

So if considering my own situation, it would appear from the Indian governments perspective, that I as an individual I should be penalized for engaging in the trade and circulation, through buying and selling, of bitcoin?

On the other hand, perhaps I am one of those 'investors' that could be exposed to losing their hard-earned money?

It would be interesting to know what am I? A perpetrator of crime or a potential victim of crime? Hardly both?


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## jman0war

About 2 weeks ago one of the price forecasters i follow said to expect to see a full pull back of December's price rise.
Which looks to be what is occurring.

It's pretty impressive, Bitcoin.
What other open source project, coded by mere volunteers, creates a $416,224,385,082 market and has the most powerful nations and banks fretting.


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## MrEarl

Gordon Gekko said:


> .....I have encountered some morons over the last number of weeks who have borrowed to buy this garbage and whose entire wealth is tied up in it....



Completely nuts !

Having borrowed and gone to Vegas to play cards, would have made more sense to me (as worst case, they'd have had a holiday and probably been comped a few drinks etc )


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## TheBigShort

Gordon Gekko said:


> It’s below $9k now ($8,800).
> 
> I have encountered some morons over the last number of weeks who have borrowed to buy this garbage and whose entire wealth is tied up in it.
> 
> Madness, but they’re like a cult and think that nobody “gets it”.
> 
> Guess what? That Kool Aid was actually poison.




Who was the idiot that lent out the money? 
I mean I can only imagine it was a recognised financial institution that could lend amounts to the value of an individual's 'entire wealth'? 

As foolish as you think those are who borrow to invest in Bitcoin (I agree, borrowing to invest in Bitcoin is foolish), it can't be as stupid as actually lending the money to invest in it, could it?


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## TheBigShort

MrEarl said:


> Completely nuts !
> 
> Having borrowed and gone to Vegas to play cards, would have made more sense to me (as worst case, they'd have had a holiday and probably been comped a few drinks etc )



I agree, but I would consider the lender even nuttier, wouldn't you? 

Who is in control of these lenders? Is there any oversight at all?


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## Brendan Burgess

TheBigShort said:


> it can't be as stupid as actually lending the money to invest in it, could it?



That is a very good point. I presume it was secured on their home?


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## tecate

MrEarl said:


> Having borrowed and gone to Vegas to play cards, would have made more sense to me (as worst case, they'd have had a holiday and probably been comped a few drinks etc )


And the same grouping of morons would just as easily do that - or sign up to whatever the next get rich quick plan is marketed at them.  That is not the fault of cryptocurrency.

A couple of weeks ago, a work colleague contacted me having clicked on some click-bait or other that was packaged with the 'bitcoin' buzzword implicated in it.  She must have made contact in some way and there was some boiler-room sales guy on the phone to her in no time.  She knew I had invested in Bitcoin and asked my advice....which was to stay the hell away!

These vermin feed off of peoples lack of knowledge.  It has nothing to do with bitcoin or cryptocurrency - that's just the manner in which they packaged their scam on this occasion.  No doubt they are remodelling that already to something else now that there has been a major price correction in the cryptocurrency world. 

The news this week that facebook were prohibiting bitcoin related adverts was presented as bad news.  How the hell was it bad news!  All those ads were to do with scams like the one above.  It doesn't reflect poorly on bitcoin or cryptocurrency generally.


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## TheBigShort

Brendan Burgess said:


> That is a very good point. I presume it was secured on their home?



Brendan

We came out of our fixed mortgage last September. We decided to switch lender to avail of preferential 'new business' rates offered by lenders. We didnt do anything it about it until January.
We are going with the bank account that holds our joint a/c for last 18yrs and holds my current a/c that my wages are paid in to for 20yrs odd.
Our loan to value ratio is 35%. Our mortgage to income is almost 1:1.

For this, the bank which we have been customers with want us to verify our identity (in fairness I think it is a newish regulatory requirement to re-verify id after _x _amount of years).
They require, passports, payslips, bank statements of all other active accounts, mortgage statements, credit card statements, life assurance details, salary certs etc.

We are not even borrowing any money!

How anyone could enter a financial institution and borrow their entire wealths worth to invest in bitcoin is beyond me?

Either the banks are back to their reckless, feckless ways and should be shut down before we all have to pay, again, or... Im missing something in these stories?


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## jman0war

Isn't there is a transfer of wealth occurring right now, by keeping interest rates artificially low?
It's basically transferring from savers to borrowers.

incentivizing people to pursue credit while punishing savers.


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## tecate

jman0war said:


> Isn't there is a transfer of wealth occurring right now, by keeping interest rates artificially low?
> It's basically transferring from savers to borrowers.
> 
> incentivizing people to pursue credit while punishing savers.


That - and currency debasement on steriods - is another reason why I went down the road of placing some savings in BTC.


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## TheBigShort

My jitters are over.

 Didnt take long, but admittedly I got somewhat spooked at the rate of price decline coupled with the ramping up of the negative media stories. 

I had to remind myself what I understood bitcoin to be and why it is here. 
As soon as my profits are delivered I expect to start buying in again.


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## tecate

I'm also considering buying in again - but at a sane proportion this time - no more than 10-15%..and with that, I'm thinking in terms of diversifying 50/50 between bitcoin and ethereum.  I simply don't know enough about any other coins to consider them (albeit that whilst folks here think that btc is rubbish, most altcoins are complete pump n dump material).  I'm waiting for the whole tether situation to be clarified / dealt with first though.  

The rest of my earnings I'm going to try and figure out how to invest in stocks.  That's a whole new ballgame for me - as I've never dabbled in that - will have to get up to speed.  Hopefully I'll do a better job with stock picks than those that selected them recently because they had 'blockchain' in the name!


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## MrEarl

tecate said:


> I'm thinking in terms of diversifying 50/50 between bitcoin and ethereum. ...



I'm far more of a fan of Ether than Bitcoin tbh.  I've zero funds in Bitcoin and don't see myself ever buying Bitcoin again, while I currently have a small holding in ETH, which I am now very tempted to increase.  (Anyone interested in a little background in Ethereum might like to have a read of  this ).

I also hold a small monetary amount in about a dozen _alt currencies_, it's very small in financial terms, and I intend just let it sit for 6-9 months and see how they go.



tecate said:


> The rest of my earnings I'm going to try and figure out how to invest in stocks.  That's a whole new ballgame for me - as I've never dabbled in that - will have to get up to speed.  Hopefully I'll do a better job with stock picks than those that selected them recently because they had 'blockchain' in the name!



I find investing in equities quite interesting, and while I don't claim to know it all, I have put some time into it and enjoyed learning a little, then trying to profit from what I was learning.

My understanding of the rules on AAM is that we cannot discuss individual shares, but I think we are okay to discuss the principals of investing (hopefully Mr. Burgess or one of the Mods might confirm here in due course).  Assuming that I am correct, would be delighted to participate in a discussion on same over on a new thread.


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## TheBigShort

MrEarl said:


> I find investing in equities quite interesting, and while I don't claim to know it all, I have put some time into it and enjoyed learning a little, then trying to profit from what I was learning.



I like that. I lost a considerable sum of money on shares during the crash, it was a bad time. But in the long-run it opened my eyes to learning as much as I can about finance and economics.
Im certainly no expert, but I find it more fullfilling now to decide my own financial strategy rather than pay someone to decide it for me.


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## MrEarl

TheBigShort said:


> ....Im certainly no expert, but I find it more fullfilling now to decide my own financial strategy rather than pay someone to decide it for me.



Agreed, and like you I also took some pain late last decade, although I continue to pay professionals to assist with some investments (part of my pension for example).


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## TheBigShort

MrEarl said:


> Agreed, and like you I also took some pain late last decade, although I continue to pay professionals to assist with some investments (part of my pension for example).



Agreed. It would be folly to dismiss all expertise as there are complexities to understanding all of finance that are simply beyond me.
But the scope for independent research and self analysis now is huge. It opens alot options.


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## Brendan Burgess

TheBigShort said:


> But the scope for independent research and self analysis now is huge. It opens alot options.



There is simply no evidence that researching equities and trying to pick winners confers any value whatsoever.

The stock market is efficient or, at least, more efficient than 99.99% of people.

If you want to invest in the stock market, buy a fund or buy a diverse portfolio of blue chip shares and hold them for the long-term.

Brendan


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## TheBigShort

Brendan Burgess said:


> There is simply no evidence that researching equities and trying to pick winners confers any value whatsoever.





Brendan Burgess said:


> If you want to invest in the stock market, buy a fund or buy a diverse portfolio of blue chip shares and hold them for the long-term.



I find that somewhat bizarre. I recall a sales rep trying to sell me Additional Voluntary Contributions to invest in my pension. The investments would be put into blue chips known to most in Ire & UK. He showed me the top ten - two of which were prominent Irish banks. Another was a well known British airline. All of which have performed poorly over the last decade. The rep assured me at the time that my funds were to be managed by mathematical experts!

I really dont get that sentiment of not researching? Had I done my research on Waterford Wedgewood, instead of listening to biased commentary from Independent News, it would have saved me a few €K.

However, my research of Irish food companies is gaining quite nicely lately. And now that I have a few bob extra spare, tech companies engaged in energy solutions is where my focus will be at (albeit, a long way to go before im comfortable dipping my toe in that pond).


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## Brendan Burgess

TheBigShort said:


> I find that somewhat bizarre.



Most people do and indeed I did, when I came across it first. 

In short, the price of the share today, reflects all that is known about it and the combined analysis of thousands of professionals world wide. You are unlikely to be able to spot a mis-priced share. 



TheBigShort said:


> The investments would be put into blue chips known to most in Ire & UK. He showed me the top ten - two of which were prominent Irish banks. Another was a well known British airline. All of which have performed poorly over the last decade.



It is very likely that your fund was a well diversified fund whose performance reflected the performance of the stock market generally. So while you lost on a few shares, the fund overall should have done well. Of course, you probably got crucified by fees.

I have had big losses in a few shares, but they have been compensated for many times over by the other shares in my portfolio. 

Brendan


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## TheBigShort

Brendan Burgess said:


> short, the price of the share today, reflects all that is known about it and the combined analysis of thousands of professionals world wide. You are unlikely to be able to spot a mis-priced share.



I agree. Dont get me wrong, I dont have the time or resources or knowledge to trade frequently or go bargain hunting.
Im a small investor, I look at companies, what they produce, their history, their balance sheet and their outlook.
After that, if my gut sentiment has a good feeling I take a punt.


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## ant dee

I agree with what Brendan is saying our individual research is unnecessary, since the market price already adjusted for it and countless other things we are not aware of.
The stock market is a very very efficient market.
We might as well pick shares at random.


----------



## TheBigShort

ant dee said:


> I agree with what Brendan is saying our individual research is unnecessary, since the market price already adjusted for it and countless other things we are not aware of.
> The stock market is a very very efficient market.



I agree the market is efficient, but it is not wholly efficient. My research does not involve intricate forensic analysis, it broadly based on sentiment using derived from a number of factors listed above. 
No rocket science about it, it just ensures I cant blame anyone else if it all goes pear-shaped. 



ant dee said:


> We might as well pick shares at random.



You could do that, and I believe there are blind monkeys that have out-performed financial analysts in the stock picking stakes.
But im interested in finance and economics etc. Why would I hand over to somebody else what I enjoy doing myself?


----------



## Firefly

The decline in Bitcoin continues. Looking at the 1yr graph below, it looks to me like the end of July / start of Aug seemed to represent a stable value for Bitcoin of around $3k. 

https://www.coindesk.com/price/


----------



## Brendan Burgess

Firefly said:


> Looking at the 1yr graph below, it looks to me like the end of July / start of Aug seemed to represent a stable value for Bitcoin of around $3k.



What? 






It looks to me as if the stable price is zero, which it was for the first three years. 

In any event, the fundamental value is zero, which it will reach eventually. 

Brendan


----------



## ant dee

One can make the SnP500 chart look as bad just as easily...
[broken link removed] 
[broken link removed]


----------



## MrEarl

Hi,

For what it's worth, I don't think the crypto currencies have been around long enough, for us to be paying too much attention to graphs (and that is not to say that I have not looked at graphs for price performance quite a few times myself, over the last few months).

There is absolutely no disputing the fact that there's been a massive drop in the price of almost all cryptos in recent months. 

People that I speak with who have invested in cryptos (including some who are very active in the markets, albeit trading on their own accounts), are generally of the view that things are going to remain extremely volatile until after the Chinese new year, but they expect things to settle down from the end of February an investors to begin to push prices up again thereafter. 

I think what's going on in Asia (be it people withdrawing cash to spend on New Year celebrations, or be it concerns regarding regulatory changes in South Korea etc.) is only part of the issue, as I also think there is pressure being placed on the cryptos by world regulatory authorities, certain banks refusing to process transactions across their credit cards, or in some instances process transfers to and from the crypto exchanges.  For me, it could well be the summer before things settle down in the crypro currency markets and at that stage, prices may look extremely cheap compared to what we've been looking at for much of the last six months.  Between now and then, there's probably potential decent profits to be made if you are prepared to take big risks and watch the screens 24/7, but lets not forget there's also the risk of massive losses.


----------



## Firefly

Brendan Burgess said:


> It looks to me as if the stable price is zero, which it was for the first three years.
> In any event, the fundamental value is zero, which it will reach eventually.



I think Bitcoin could have some value in the future. At the moment the demand seems to be reserved for illicit activity and speculating, but I don't think it's inconceivable to see more users for the currency and technology over time. A natural price point for me would be the price of gold or a multiple/division of.


----------



## Brendan Burgess

Firefly said:


> A natural price point for me would be the price of gold or a multiple/division of.



Why? 

There is absolutely no comparison between Bitcoin and Gold as has been shown in the other thread. 

Why not a multiple of 20,000 times the $? 

Or 1/100th of the $? 

And why Bitcoin? Why not something else? Why Bebo when Facebook is much better? 

Brendan


----------



## Firefly

Brendan Burgess said:


> Why?
> 
> There is absolutely no comparison between Bitcoin and Gold as has been shown in the other thread.
> 
> Why not a multiple of 20,000 times the $?
> 
> Or 1/100th of the $?
> 
> And why Bitcoin? Why not something else? Why Bebo when Facebook is much better?
> 
> Brendan



Well, as you know I am no expert!

However, my gut is telling me Bitcoin will stick around as I think crypto currencies will stick around and Bitcoin is the best known, most used and the incumbent. One of the main selling points of Bitcoin is that the supply is limited so I can't see how it could be pegged to any FIAT currency. If it was going to be pegged to something that is also limited in demand, Gold would be an obvious choice to me.


----------



## jman0war

Brendan Burgess said:


> And why Bitcoin? Why not something else? Why Bebo when Facebook is much better?


Because Bitcoin has the longest running blockchain with the most accumulated proof of work, which gives it the most trust.
The immutability of the data in that blockchain becomes increasingly assured.

The data in the Ethereum blockchain on other hand, is changeable by direction from it's founder and leader Vitalik Butterin.
They have changed data to roll back transactions before, and are currently planning on doing it again.
How much trust can be placed in that?


----------



## Gordon Gekko

I’m not sure who I should listen to...an angry mob of millenial zealots ranting about how it’s different this time...or Charlie Munger:

“Bitcoin represents total insanity; avoid it like the plague. You know it is one thing to think gold has some marvelous store of value because man has no way of inventing more gold or getting it very easily, so it has the advantage of rarity. Believe me, man is capable of somehow creating more Bitcoin; they tell you there are rules and they can't do it. Don't believe them! When there is enough incentive, bad things will happen.
I think it is perfectly asinine to even pause to think about cryptocurrencies; it’s bad people, crazy bubble, bad idea, luring people into the concept of easy wealth without much insight or work; that’s the last thing on earth you should think about!”

If digital currencies are analagous to the internet in terms of potential, then Bitcoin is this era’s WorldofFruit.com.


----------



## jman0war

Gordon Gekko said:


> “Bitcoin represents total insanity; avoid it like the plague. You know it is one thing to think gold has some marvelous store of value because man has no way of inventing more gold or getting it very easily, so it has the advantage of rarity. Believe me, man is capable of somehow creating more Bitcoin; they tell you there are rules and they can't do it. Don't believe them! When there is enough incentive, bad things will happen.
> I think it is perfectly asinine to even pause to think about cryptocurrencies; it’s bad people, crazy bubble, bad idea, luring people into the concept of easy wealth without much insight or work; that’s the last thing on earth you should think about!”


I agree that in future, some companies in the space will exert their influence to try and inflate bitcoin.
https://medium.com/@rusty_lightning/the-three-economic-eras-of-bitcoin-d43bf0cf058a
But I highly doubt that will be successful as the bitcoin community have already thwarted an attempt at changing consensus rules that were backed by the major companies in the space, and inflating the supply would be a major departure from original rules.

That's the benefit of running a Full Node.
You decide what rule changes you want to recognize.


----------



## jman0war

Wollie said:


> Agreed 100%. 500 years ago, Bitcoin was unheard of but everyone knew that gold had a value. The same will be true 500 years from now, or even 50 years from now. I doubt if any of your great grandchildren will recognise what Bitcoin is, or more correctly was, by the time they get to adulthood.


In 500 years the supply of Gold in the market will be so astronomical, it will be uninteresting and unremarkable.


----------



## azerogo

Now under $6000 a lot of late buyers have to be hurting now.


----------



## MrEarl

azerogo said:


> Now under $6000 a lot of late buyers have to be hurting now.



Not if the only bought this morning 

More seriously, it depends on their source of funds and what their investment strategy was when they bought. 

If funds are borrowed, then it's just madness !  

However, if funds were invested as a small part of a person's overall investment strategy, then it may make perfect sense to have a little exposure to an extremely volatile, high risk but potentially high reward, investment.  Is it really that different (from an investors risk perspective) to investing in a privately owned start up for example ?


----------



## Brendan Burgess

MrEarl said:


> Is it really that different (from an investors risk perspective) to investing in a privately owned start up for example ?



Absolutely. 

In a privately owned start up, there is a possibility that it might succeed.

There is no possibility whatsoever that Bitcoin will be worth anything at the end of the day. It is worthless.  100%. 

You can only make money on it if you get in and out again before it collapses completely.

Brendan


----------



## Firefly

Brendan Burgess said:


> There is no possibility whatsoever that Bitcoin will be worth anything at the end of the day. It is worthless.  100%.


Hi Brendan,

Would that not imply zero demand for the currency, as in, nobody will ever use Bitcoin to buy anything? I think Bitcoin will stick around and even if only used to support illegal activity, it will have some value as somebody will need to buy it with something else (FIAT)


----------



## MrEarl

Brendan Burgess said:


> Absolutely.
> 
> In a privately owned start up, there is a possibility that it might succeed.
> 
> There is no possibility whatsoever that Bitcoin will be worth anything at the end of the day. It is worthless.  100%.
> 
> You can only make money on it if you get in and out again before it collapses completely.
> 
> Brendan




Sorry, but we disagree here.

There is an extremely high risk of failure with a start up, so the investment is very high risk in either case. 

The absence of a liquid market where an investor can exit their investment in a start up at any time, cannot be ignored.  An investor in a crypto currency can exit their investment at any time, so could exit at a point in time when the price of their currency is above what they paid for it.

Finally, I note that you refer to Bitcoin.  Is that intentional, or just force of habit ?  My reason for asking is because there are numerous crypto currencies and not all should be considered to have the same level of risk (albeit, all are either high risk, extremely high risk, or just plane nuts, imho).


----------



## jman0war

Brendan Burgess said:


> Absolutely.
> 
> In a privately owned start up, there is a possibility that it might succeed.
> 
> There is no possibility whatsoever that Bitcoin will be worth anything at the end of the day. It is worthless.  100%


It sounds like wishful thinking.
If bitcoin didn't collapse in 2013 after Mt. Gox and Silk Road, it won't collapse now.
The network is much bigger now and as robust as ever.
Sure, Banks and government can collude to try and freeze bitcoin out and will undoubtedly affect price; but bitcoin is censorship resistant.
It will always have utility on the dark web and now there are more people than ever in the same limited space.


----------



## TheBigShort

Brendan Burgess said:


> There is no possibility whatsoever that Bitcoin will be worth anything at the end of the day




That’s a big call. Its currently trading around €5,000. My guess is it will still be worth something this time tomorrow. 

On a more serious note, while I respect your view that it will return to zero and you may be right, you have also admitted that you don’t know when it will return to zero. The fact is everything returns to zero once it has been fully utilised, consumed, destroyed, or becomes obsolete.

So as much as you constantly proclaim bitcoin to return to zero, you aren’t actually stating anything new that cannot be said of practically everything else that can be utilised, consumed, destroyed or become obsolete.


----------



## Brendan Burgess

TheBigShort said:


> The fact is everything returns to zero once it has been fully utilised, consumed, destroyed, or becomes obsolete.



No, not at all.  Companies tend to reinvest their profits and grow. Of course, some go to zero, but enough go on to make lots of money.

Most houses, or the land they are on, increase in value over time.

Bitcoin has no value. Just a price which will revert to zero, in time.

Brendan


----------



## TheBigShort

Brendan Burgess said:


> Companies tend to reinvest their profits and grow



Then they haven't been fully utilized, consumed, destroyed or have become obsolete.



Brendan Burgess said:


> Most houses,



return to zero in the long-run (unless money is invested into them to keep them suitable for habitation).



Brendan Burgess said:


> or the land they are on



Land is rarely (if ever) fully utilized, consumed, destroyed or obsolete.


----------



## ant dee

All houses and the land they are on will return to zero once our sun becomes a red giant!

I know this is silly, but seriously Brendan...
Many have said, in different ways that an open ended prediction is meaningless.
Surely you can agree with that?


----------



## Brendan Burgess

I expect Bitcoin will be gone by the end of this year, but it might not.

It will definitely be gone in a couple of years. 

It might be doing something on the Dark Web at that stage - but even that is probably unlikely. 

Normal citizens who have bought Bitcoin will not be able to realise any cash for them legitimately within a few years.

Is that precise enough? 

From a practical point of view, I am simply trying to stop people losing money. I am also trying to help those of you who have been lucky enough to make money, to preserve your wealth.   If you lose 98% of your money but get some satisfaction by coming back to me at the end of 2020 saying "Ha, ha, Brendan - you were wrong. Bitcoin is still worth 10 cents per unit on the Dark Web" so be it.

Bitcoin is worth nothing. No one should be buying it. Those of you who have should sell it as soon as you can. 

Brendan


----------



## jman0war

What's so unique about this year or the next couple of years, that makes it different this time?

Bitcoin didn't have nearly the same censorship resistance in 2013, and only like a couple of places where one could buy it with Fiat.
SilkRoad and Mt.Gox should have been the knockout blow?


----------



## Brendan Burgess

Bitcoin was worth nothing at the start. 
It was worth nothing a few years ago.
It's worth nothing now. 

Bubbles grow slowly and then burst.  So what is unique about this year is that it's 5 years later.  A lot of people will have seen the bubble rising and then deflating. 

Brendan


----------



## jman0war

Brendan Burgess said:


> Bitcoin was worth nothing at the start.
> It was worth nothing a few years ago.
> It's worth nothing now.
> 
> Bubbles grow slowly and then burst.  So what is unique about this year is that it's 5 years later.  A lot of people will have seen the bubble rising and then deflating.
> 
> Brendan


People in 2013 bought Bitcoin using Fiat currency; people in each year since then right up to today also bought Bitcoin using Fiat currency.
This indicates that people believe that Bitcoin is worth something.
That is the only measure of anythings worth : people's subjective valuation of it.


----------



## TheBigShort

Brendan Burgess said:


> Bitcoin was worth nothing at the start.
> It was worth nothing a few years ago.
> It's worth nothing now.



Again your views are contrary. Recently you were telling me about the efficiency of the market. I assume you accept their is a market for bitcoin? But somehow you cannot accept the efficiency of its market.
To use my record collection analogy, my collection is worth €10,000 to me, a record dealer will offer me €150 fot it, my wife will pay you €50 to get rid of it.
How can my record collection be worth €10,000, €150 and -€50 at the same time?
Surely that is what the market is efficient for? Price discovery at any given time?

Bitcoin is trading @€5,500 at the moment. That is what it is worth.


----------



## Brendan Burgess

TheBigShort said:


> Recently you were telling me about the efficiency of the market.



The _stock _market is, more or less efficient, is I hope what I told you. 

But bubbles develop as did the dot.com bubble.  But the markets for tulips in 17tch Holland or pyramid schemes WEW in Ireland or crypto currencies today are definitely not efficient.  There is no contradiction. 

Brendan


----------



## Brendan Burgess

TheBigShort said:


> Bitcoin is trading @€5,500 at the moment. That is what it is worth.



No, that is its price.  They are fundamentally different concepts.


----------



## TheBigShort

Brendan Burgess said:


> From a practical point of view, I am simply trying to stop people losing money



No you are not.



Brendan Burgess said:


> Bitcoin is worth nothing. No one should be buying it. Those of you who have should sell it as soon as you can.



Following that advice, if I sell my bitcoin - who should buy it? No-one?


----------



## TheBigShort

Brendan Burgess said:


> No, that is its price.  They are fundamentally different concepts.



It is the price at which the market sets its value or worth. You may think it is worth zero, or next to zero, someone else may think it is worth €150, someone else may think it is worth €10,000.


----------



## jman0war

I'm pretty sure this will have 'value'
Should have called it FedCoin

https://pbs.twimg.com/media/DVXJy8XXcAA-_Mx.jpg:large


----------



## Brendan Burgess

TheBigShort said:


> who should buy it? No-one?



Correct. 

It's not worth anything.  

The price will fall to zero to reflect its value.

But while there are people prepared to pay $7,500 for it, you should sell it. 

Brendan


----------



## TheBigShort

Brendan Burgess said:


> The price will fall to zero to reflect its value.



Only if people stop buying it. But in order to sell it (to stop losing money) I need a buyer. If there are buyers then it wont return to zero.

So your claim that you are trying to stop people losing their money is false. In order for your prediction of bitcoin to return to zero, some people will have to lose their money. In order for your bets to come through on PP or Betfair, others will have to lose their money.

You are not interested in trying to stop people losing their money, in fact the opposite. It is in your interest that people lose their money via bitcoin going to zero.


----------



## RETIRED2017

TheBigShort said:


> No you are not.
> 
> 
> 
> Following that advice, if I sell my bitcoin - who should buy it? No-one?


The will be mining up to 2040 I suspect the need your money to mine what they cant sell,

It will come back down over time some people will hold on until there bitcoin is worth less than the gave for it,

There are a lot of people up money reading some of the posts on hear the are not going to sell until bitcoin makes them a loss,

I suspect bitcoin has a undercover value to move money around the World for now,

It was set up to look like it will last until 2040  for a reason ,


----------



## Brendan Burgess

TheBigShort said:


> You are not interested in trying to stop people losing their money, in fact the opposite. It is in your interest that people lose their money via bitcoin going to zero.



Hi Shortie 

I am strongly advising the people who listen to me that they should not buy Bitcoin. If they have it that they should sell it. 

I have also drawn people's attention to very generous odds on Betfair and Paddy Power. That is not in my interest as it drove the odds down. 

But you are right. I have shorted Bitcoin and I am delighted to see it falling. 

But what I say or do will have no impact on the price. 

Brendan


----------



## Flybytheseat

Couldn't agree more with Brendan. Bitcoin is a lightly cloaked ponzi scheme. Just because my nasal hair is of limited supply and can be mined if I'm lucky enough to live until 2040 doesn't mean it has inherent value. Also Bitcoin fails as a currency due to extreme volatility. Who accepts payment in BTC when by the time it hits your account it could have dropped 30% in value?


----------



## ant dee

Flybytheseat said:


> my nasal hair


----------



## jman0war

Bitcoin is an open source project with a public ledger.
Literally anybody in the world can scrutinize the code and the actual transactions and many (millions?) do.
It would be quite remarkable if so many eyeballs on such an open project would somehow fail to spot the scam.

The volatility of price does not come from anything within Bitcoin's rules; it appears to follow-on from the actions and statements of government regulators and banking cartels.


----------



## Duke of Marmalade

Flybytheseat said:


> Just because my nasal hair is of limited supply and can be mined if I'm lucky enough to live until 2040 doesn't mean it has inherent value.


It's actually 2140.  All the same if you could work on transferring your NH anywhere in the world within 10 mins you are worth $100bn give or take $25bn depending what time of day it is.


----------



## TheBigShort

Flybytheseat said:


> Just because my nasal hair is of limited supply and can be *mined*



 Jaysus, have you not heard of a trimmer?


----------



## Brendan Burgess

jman0war said:


> it appears to follow-on from the actions and statements of government regulators and banking cartels.



Surely that is irrelevant to Bitcoin which is independent of all countries and regulators?  Why would they let them affect the price?


----------



## jman0war

Brendan Burgess said:


> Surely that is irrelevant to Bitcoin which is independent of all countries and regulators?  Why would they let them affect the price?


That statement makes no sense.

If say, a government bans all gold or decrees some new onus regulation around holding and trading of gold; i'm sure you can imagine that will effect the relationship between those ounces of gold and the dollars and euros people are prepared to exchange it for.

Let's put this another way.
Can you cite any reasons within the bitcoin protocol, that result in price volatility?


----------



## tecate

RETIRED2017 said:


> It was set up to look like it will last until 2040  for a reason ,


I don't follow.  What reason?


----------



## MrEarl

Hi,

Despite Tulipmania back in the 1600s, Tulips still have a value today.  Sure, they have a physical presence, but in reality are they anything more than a colourful plant (or even a weed, in some peoples eyes) ?

During the DotCom Bubble, all sorts of tech companies were launched and floated.  Many of them went bust, or lost a large percentage of their value and investors lost billions as a result.  Most had no tangible assets, no long term contracted cashflows, many were making massive losses and were little more than a dream of what the world might offer consumers or businesses in the future.  However, despite all of the negative stories from the DotCom bubble, today we have companies like Amazon, Ebay, Priceline etc. all worth billions.  These companies are here today because investors speculated and backed them.

No more than the survival and success of some DotCom companies, or people still being willing to pay for Tulips, I believe that some crypto currencies will survive and even increase in value. As I've said elsewhere, I'm not entirely convinced that these future successes will include Bitcoin, but I do believe that there is justification for investing in them as some will ultimately retain or increase their current value.  My reasoning for this is simple - it will be down to supply and demand for the individual crypto currency, where the crypto will offer a convenient medium of exchange that can be used instantly, at very low cost, anywhere across the globe and have become popular, hence the demand will have increased.  

Obviously, there is more justification for putting speculative investment into some of the companies behind the cryptos or the exchanges themselves, but they are independent of the currencies.

None of the above takes from the fact that investing in crypto currencies is very high risk.


.


----------



## jman0war

The stock market is back up and so is Bitcoin (and all cryptos).  
Coincidence?


----------



## Fella

You guys got great value out of talking about Bitcoins non value ! I was done to death talking about Bitcoin in December took January off mentioning it I wonder how many more years this thread will exist I doubt we see the end of Bitcoin any time soon.


----------



## RichInSpirit

Bitcoin up nearly 40% from it's recent lowest point. ☺


----------



## Flybytheseat

RichInSpirit said:


> Bitcoin up nearly 40% from it's recent lowest point. ☺


Good job I didn't buy and pay for something with Bitcoin as I'd have overpaid by 40%.....highlights why this is not a runner as a currency to pay for goods or services so has no real value whatsoever.


----------



## Gordon Gekko

The comparisons with internet companies or indeed the internet itself are misguided to say the least.

The characteristics that one would expect to see are:

- A store of value, e.g. gold.

- Backed by something or someone.

- Generally accepted in exchange for goods and services.

I agree with Charlie Munger and Warren Buffett who know a thing about investing; this scam will have 21 million units in circulation...until it doesn’t.

It is backed by nothing and, despite the protests of disgruntled millenials, Bitcoin and other cryptocurrencies will be crushed by governments and regulatory authorities.

Other than the odd publicity hungry crackpot and criminals/terrorists, nobody will accept this rubbish. And how could they, given the volatility? If I am a tulip seller, how can I run my business and price my bunches of flowers if I accept Bitcoin.

This stuff is the con-job of the ages.


----------



## jman0war

The volatility is not Bitcoin's doing.

_"Backed by something or someone"_ sounds like an appeal to authority.


----------



## tecate

Gordon Gekko said:


> The comparisons with internet companies or indeed the internet itself are misguided to say the least.


Why is it misguided?  Plenty of people were not early adopters of the internet - as it didn't fulfil their needs.  It was work in progress.  People are judging btc and cryptocurrency generally based on where it's at in it's development right now....as if to suggest those parameters are fixed - when most likely they're not.

The internet had scaling issues.  Remember those dial-up modems - when it was called the World Wide Wait?  ...when you'd have to wait for it to display a very simple image or deliver an email?  When so many applications either had not been developed for it OR simply couldn't be run as the infrastructure wasn't there - whether that be bandwidth or certain protocols, etc.



Gordon Gekko said:


> - Backed by something or someone.


The USD or Euro is not backed by jack.  They're pieces of paper in the same way as bitcoin is a line of code. Sentiment dictates - and if there's enough will to give BTC (or other crypto's) a certain value, then that's all there is to it.  Perhaps that may go down to zero or perhaps it won't.



Gordon Gekko said:


> - Generally accepted in exchange for goods and services.


It had made modest in-roads in this regard...but the momentum has gone into reverse as bitcoin hit scaling issues (resulting in prohibitive tx fees and times).  If that gets resolved by Lightning Network, then it can move forward again in this respect.



Gordon Gekko said:


> It is backed by nothing and, despite the protests of disgruntled millenials, Bitcoin and other cryptocurrencies will be crushed by governments and regulatory authorities.


We've covered the 'backing' business.  As regards regulation, that may well be - but we're going to find out very soon how that pans out -as regulatory frameworks are on the way in all jurisdictions.



Gordon Gekko said:


> This stuff is the con-job of the ages.


 A 'con-job' would suggest that someone has pimped this at the consumer when no such thing has happened.  Early on, people took to it as they believed in the concept.  The crowd that got involved in the last few months did so on a purely speculative basis.

With regard to volatility, I agree that it's an issue in terms of the 'store of value' angle and also use as a transactional currency.  However, the very regulation which you say will kill btc (and it might well do so...we'll have to see) could play a very healthy role in addressing this.  Furthermore, it would be plausible to believe that over time, volatility will dissipate.


----------



## jman0war

Bitcoin actually has the lowest volatility of any crypto.
That volatility is due to perception, that perception follows government statements and actions.
Government basically creates the volatility.

Methods by which that volatility can be lowered, such as Futures and ETF's are a work in progress.
By denying the market's desire for bitcoin ETF's, the government prevents bitcoin from reducing volatility.

Personally i believe that this is in part fecklessness by government, but mostly i think it's collusion with Banks as both they and banks don't like the competition.


----------



## Gordon Gekko

tecate, Bitcoin is allegedly a currency, the internet is a network. We may end up using digital currencies, but my best guess is that we’d be using crypto-Dollars (for example) and not 21 million units of unregulated nonsense dreamed up by some fella in his bedroom.

The US Dollar is most certainly backed by something: the largest and most powerful military force ever assembled.


----------



## TheBigShort

Gordon Gekko said:


> The US Dollar is most certainly backed by something: the largest and most powerful military force ever assembled.



Championing the 'free' world.


----------



## Gordon Gekko

TheBigShort said:


> Championing the 'free' world.



I was not commenting on the rights or wrongs of that, merely pointing it out. If governments work in tendem to destroy Bitcoin, nothing will happen. If they tried it with the Dollar, something would most definitely happen.


----------



## TheBigShort

Gordon Gekko said:


> I was not commenting on the rights or wrongs of that, merely pointing it out. If governments work in tendem to destroy Bitcoin, nothing will happen. If they tried it with the Dollar, something would most definitely happen.



I agree. Threaten the US dollar position as the worlds reserve currency and the consequences can be dire - Libya, Iraq for instance.
China, Russia and Iran are also considered threats but not as easy to target. But NK is a valuable pawn to be played. 

Im not sure who would be targeted for bitcoin though? The internet?


----------



## ant dee

Gordon Gekko said:


> tecate, Bitcoin is allegedly a currency, the internet is a network. We may end up using digital currencies, but my best guess is that we’d be using crypto-Dollars (for example) and not 21 million units of unregulated nonsense dreamed up by some fella in his bedroom.
> 
> The US Dollar is most certainly backed by something: the largest and most powerful military force ever assembled.



Err, of course Bitcoin is a network!
Dollars and Euros are digital enough already, it has little to do with Bitcoin adoption.


----------



## tecate

Bitcoin is networked money.  As regards someone 'dreaming something up in their bedroom', you mean someone had an idea and it led to something significant?...how many examples do you need?....or can that Eureka moment only happen in a corporate office somewhere?

In terms of a nation state crypto, do you understand the distinction between a centralised cryptocurrency being hacked and a decentralised crypto being hacked?  Good luck with the fallout in those circumstances!


----------



## Leo

Gordon Gekko said:


> this scam will have 21 million units in circulation...until it doesn’t.



Well nearly, somewhere between 2.8 & 3.8 million bitcoin have already been lost forever. Over enough time, the probability of all bitcoin being lost approaches certainty.


----------



## Leo

ant dee said:


> Err, of course Bitcoin is a network!



Being pedantic it's an open ledger system and associated software running on nodes that rely on the internet for its network


----------



## ant dee

Leo said:


> Well nearly, somewhere between 2.8 & 3.8 million bitcoin have already been lost forever. Over enough time, the probability of all bitcoin being lost approaches certainty.


I don't think so.

An estimated of 1 million is rumoured to be Satoshi's coins. We do not know if and why Satoshi lost those but I doubt it was an accident.
Then you got the old hard drives back when it was worth pennies.
And pretty much all the coins were lost when they were cheap. Hundreds of bitcoin in the old hard drive in the attic?? Thats not happening anymore!

With Bitcoin becoming more valuable people secure it properly. They make backups, they inform their next of kin. Not to mention custodians like Coinbase holding a lot of it anyway!
I believe coins being lost nowadays are approaching zero.
Of course dementia or sudden death accidents will still cause coins to be lost but nothing that will significantly add to those 3-4 million already lost.

Add to all that the 8 decimal point divisibility...


----------



## ant dee

Leo said:


> Being pedantic it's an open ledger system and associated software running on nodes that rely on the internet for its network


Ah well...
Ill be pedantic also and suggest it can work without the internet  

Come to think of it... oh the amount of forks there would be without broadband...
Maybe that's why they keep the blocksize limit low!


----------



## Leo

ant dee said:


> An estimated of 1 million is rumoured to be Satoshi's coins. We do not know if and why Satoshi lost those but I doubt it was an accident.



True, but Chainalysis took those into account in their 2.8-3.8M estimate. Ultimately, is just that, an estimate, but they



ant dee said:


> Of course dementia or sudden death accidents will still cause coins to be lost but nothing that will significantly add to those 3-4 million already lost.



That will indeed be the most likely cause of more significant losses while they retain significant value, but you will still have occurrences of people losing access to their private keys on a small scale. It's human nature afterall.


----------



## jman0war

Technically speaking, there isn't anything that would prevent rule changes that nix all of Satoshi's holdings.

Or to stretch it out a little more, rules that would nix all bitcoins that have not moved since X date (that's what FAIT currency does when new notes are issued).

Very unlikely that the rest of the network would agree; but technically possible.


----------



## jman0war

Gordon Gekko said:
			
		

> The US Dollar is most certainly backed by something: the largest and most powerful military force ever assembled.


I think that's the gist of it too.
As to why the USD would have more value than say, the Chinese Yuan.
But _brute force_ is an anachronism in today's world.

Countries, companies and individuals just need to switch to something else, some of the time; like open source digital currency, to bypass and undermine US hegemony.

It's like an entirely peaceful way to turn the lion into a household kitty.


----------



## jman0war

Looks like Stocks are going down again, so too bitcoin?


----------



## Gus1970

jman0war said:


> Technically speaking, there isn't anything that would prevent rule changes that nix all of Satoshi's holdings
> 
> Or to stretch it out a little more, rules that would nix all bitcoins that have not moved since X date (that's what FAIT currency does when new notes are issued).
> 
> Very unlikely that the rest of the network would agree; but technically possible.



That’s why for a change in the protocol hash power consensus is necessary or the network will fork, hence without the consensus of the network nobody can “nix” anything at all


----------



## landlord

BTC passed a key level of resistance 9,090 USD earlier today. It is comfortably holding above this. This is technically very bullish. 
HODL....
Hold
On (for)
Dear
Life


----------



## Brendan Burgess

Reminder: No one shown why Bitcoin has any monetary value at all or what that value should be.

The blind faithful will see this eventually.

The only resistance point is zero.

Brendan


----------



## Gus1970

Brendan Burgess said:


> Reminder: No one shown why Bitcoin has any monetary value at all or what that value should be.



You purposefully skipped my reply to this question in the other thread, care to elaborate on the point?


----------



## ant dee

Brendan Burgess said:


> Reminder: No one shown why Bitcoin has any monetary value at all or what that value should be.
> 
> The blind faithful will see this eventually.
> 
> The only resistance point is zero.
> 
> Brendan



Ah this reminds me, I came accross this a few days ago.
https://ftalphaville.ft.com/2018/02/01/2198292/nobody-puts-bitcoin-in-the-corner/

_"Suppose for a moment bitcoin never existed. And ethereum never existed. And the whole crazy world of cryptocurrencies never happened.

Someone comes along and tells you to imagine an electronic network, for moving money anywhere in the world, that no-one owns. It’s an intriguing idea. It’s an unprecedented idea. In the entirety of human history such a thing has literally never existed.

Would your response really be: ‘lol the true value of bitcoin is zero’?"
_


----------



## Sunny

ant dee said:


> Ah this reminds me, I came accross this a few days ago.
> https://ftalphaville.ft.com/2018/02/01/2198292/nobody-puts-bitcoin-in-the-corner/
> 
> _"Suppose for a moment bitcoin never existed. And ethereum never existed. And the whole crazy world of cryptocurrencies never happened.
> 
> Someone comes along and tells you to imagine an electronic network, for moving money anywhere in the world, that no-one owns. It’s an intriguing idea. It’s an unprecedented idea. In the entirety of human history such a thing has literally never existed.
> 
> Would your response really be: ‘lol the true value of bitcoin is zero’?"_



But bitcoin isn't the network. I still haven't heard anyone confirm what drives the value of bitcoin other than pure speculation. If someone comes along and creates a cryptocurrency that is actually better than bitcoin, can be used for small transactions, have faster confirmation times, use less energy, remove the need for large mining operations etc etc, then what value does Bitcoin have? It will be defunct.


----------



## MrEarl

Hello,

I'd love if we could split the debate more clearly across a few independent discussion threads, so as to more clearly discuss:

Bitcoin
Other coins such as ETH, LTC, XRP, XLM etc.
The Blockchain and other infrastructure and technology being developed or used by the cryptos

Not only would it make things a little more clear for those trying to learn, or follow ongoing discussions, but it might also help people find clarity and even agreement on the potential for some of the technology, or that there may well be a value in certain crypto coins (not specifically BTC) for a particular reason etc.

As things stand, I think there's occasional confusion and even unnecessary mild conflict appearing in this thread, which could be avoided if we had separate discussion threads.





Now, getting back to Bitcoin....


BTC is worth whatever someone is willing to pay for it.  As long as there are willing buyers and it's available for sale, it's got a value.  The fact that it's not regulated, backed by gold or government, heavily contributes to the volatility in it's price, and the risk that some day no one will want to buy it - so it would then be worthless.  We don't know if that day will ever come given it's popularity and potential uses, but it's a possibility, and one that none of us can ignore or completely dismiss.

Hopefully that's something that most of us can agree on 


.


----------



## jman0war

Sunny said:


> But bitcoin isn't the network. I still haven't heard anyone confirm what drives the value of bitcoin other than pure speculation. If someone comes along and creates a cryptocurrency that is actually better than bitcoin, can be used for small transactions, have faster confirmation times, use less energy, remove the need for large mining operations etc etc, then what value does Bitcoin have? It will be defunct.


Unlikely.
Bitcoin has the longest mathematically prove-able, secure chain.
Companies can and probably will start hashing say, their own database state, then anchor that information into the bitcoin blockchain.
That would be a great way to securely store critical information off-site, nearly free of charge into a decentralized network that is resistant to take-down orders or attackers.


----------



## Sunny

jman0war said:


> Unlikely.
> Bitcoin has the longest mathematically prove-able, secure chain.
> Companies can and probably will start hashing say, their own database state, then anchor that information into the bitcoin blockchain.
> That would be a great way to securely store critical information off-site, nearly free of charge into a decentralized network that is resistant to take-down orders or attackers.



So?? It doesn't matter how secure the chain is if there limited real life uses. And that is the problem with Bitcoin. It has severe scalability problems. Look at how long it can take a transaction to be verified currently. That problem won't be solved. All that Bitcoin has going for it is that it was the first to grab the worlds attention. Blockchain technology will develop. Other crypto-currencies will come on the market that will allow scalability and faster transaction times and where does that leave Bitcoin. Are we honestly saying that all the value in Bitcoin is that is has the longest mathematically provable secure chain??


----------



## tecate

Sunny said:


> And that is the problem with Bitcoin. It has severe scalability problems. Look at how long it can take a transaction to be verified currently. That problem won't be solved.


How can you say with certainty that it wont be solved?
Here's a recent demo of a LN transaction - 
https://www.youtube.com/watch?v=UtXe-wQyrWw&feature=youtu.be


[broken link removed]


----------



## jman0war

Sunny said:


> So?? It doesn't matter how secure the chain is if there limited real life uses. And that is the problem with Bitcoin. It has severe scalability problems. Look at how long it can take a transaction to be verified currently. That problem won't be solved. All that Bitcoin has going for it is that it was the first to grab the worlds attention. Blockchain technology will develop. Other crypto-currencies will come on the market that will allow scalability and faster transaction times and where does that leave Bitcoin. Are we honestly saying that all the value in Bitcoin is that is has the longest mathematically provable secure chain??


How long does it take?  Mempool looks totally fine these days.
Coinbase probably stopped spamming.
https://dedi.jochen-hoenicke.de/queue/#3m


Skimp on security at your peril.
Additionally, bitcoin's decentralization is what make it censorship resistant.
We haven't had a nation state try to take down the network yet, but it's probably coming.

How censorship resistant are other blockchains?


----------



## Duke of Marmalade

ant dee said:


> _"Someone comes along and tells you to imagine an electronic network, for moving *money *anywhere in the world, that no-one owns. It’s an intriguing idea. It’s an unprecedented idea. In the entirety of human history such a thing has literally never existed.
> 
> Would your response really be: ‘lol the true value of bitcoin is zero’?"_


That would be a useful network and this thought experiment precisely puts the finger on the illusion of bitcoin.  Because it is of course not what bitcoin is.  Bitcoin *does not transfer money* it transfers digital entries on a blockchain.  Can I ask Brendan's question in a different way.  What makes an entry on a blockchain signifying nothing more than it is such an entry have any value?

Getting back to that network, yes it does seem useful but very hard to see how to make money out of it.  It would not in any way increase the value of the money it transfers.  It would have to charge for its usefulness through transaction fees but since no-one owns the network how are these fees divvied out?  I suppose it goes to those who verify the transfers, call them miners or whatever.  But there is nothing there that would sore from a price of 1 to 20,000 and back to 7000 etc.

It is worth repeating the question in a different guise.  Imagine a network which transfers dollars  anywhere in the world, a network that no-one owns.  What would that do for the value of the dollar?


----------



## TheBigShort

Duke of Marmalade said:


> Imagine a network which transfers dollars anywhere in the world, a network that no-one owns. What would that do for the value of the dollar?



Are you talking about US issued dollars that are owned by the Federal Reserve or US Government? 
Dollars issued on a network that nobody owns, I imagine, could possibly collapse the value of the US Dollar, depending on its fundamental characteristics e.g. limited supply.


----------



## jman0war

Duke of Marmalade said:


> That would be a useful network and this thought experiment precisely puts the finger on the illusion of bitcoin.  Because it is of course not what bitcoin is.  Bitcoin *does not transfer money* it transfers digital entries on a blockchain.


Duke, seriously.
What is money. 
Bitcoin has brought forth a whole generation re-thinking that concept.
Those paper notes don't have any value at all. They just represent digits on some private ledgers, that is all.


----------



## jman0war

All 50 flats listed in bitcoin, sold out in Dubai.

http://cryptocoin123.com/all-50-apartments-listed-in-bitcoin-sold-out-in-dubai/


> In accordance with their previous announcement regarding putting an offer for real estate trade in Bitcoin, the UK billionaire entrepreneurs sold out 50 luxurious apartments. These apartments are located in Dubai’s Science Park and their development is scheduled to be completed by 2020


----------



## jman0war

Do you think maybe these types of data leaks are more of a concern than bitcoin?

Centralized systems are a security hole.

http://www.theregister.co.uk/2018/02/15/fedex_aws_s3_leak/
[broken link removed]

BTW, the US government quietly dropped an inquiry into the Equifax hack.


----------



## Gordon Gekko

Interesting to see Charlie Munger call Bitcoin “a noxious poison”.

“I regard the Bitcoin craze as totally asinine. I expect the world to do silly things from time to time because everyone wants easy money. It’s just disgusting that people are taken in by something like this. Our Government’s lax approach to it is wrong. The right answer with stuff that bad is to step on it hard.”


----------



## Duke of Marmalade

jman0war said:


> All 50 flats listed in bitcoin, sold out in Dubai.
> 
> http://cryptocoin123.com/all-50-apartments-listed-in-bitcoin-sold-out-in-dubai/


The article states that the crypto is immediately converted into USD because of the volatile nature of crypto.  And you can bet the crypto price of the apartments is determined by its current USD exchange rate and is not a fixed figure on a brochure. Same for the Canadian KFC.  This is pure gimmickry. Is anything at all on this planet truly priced in crypto?


----------



## TheBigShort

Gordon Gekko said:


> Interesting to see Charlie Munger call Bitcoin “a noxious poison”.
> 
> “I regard the Bitcoin craze as totally asinine. I expect the world to do silly things from time to time because everyone wants easy money. It’s just disgusting that people are taken in by something like this. Our Government’s lax approach to it is wrong. The right answer with stuff that bad is to step on it hard.”



Did he propose any suggestions as to how to "step on it hard"?


----------



## Brendan Burgess

Gordon Gekko said:


> Charlie Munger: "The right answer with stuff that bad is to step on it hard.”



I don't know that this is the right approach.

Bitcoin will fall, in time, to its correct value, zero.

Will it do much damage along the way?

There was a huge loss of wealth and there was huge public disorder in Albania after a similar irrational craze about a pyramid scheme swept the country.

But Bitcoin is not really sweeping any country except perhaps Japan and South Korea.  They might want to do something about it.  But even still, is it really a threat to the Japanese or Korean financial system?

And it's not a systematic fraud, even if the effects are the same.  A few people make a lot of money and a lot of late entrants lose everything.

I think that the Central Banks should warn people about their stupidity, but the problem is that one of the selling points is the Shortie Syndrome so such warnings probably won't be listened to - they might even boost it.

If they regulate it, it gives it a credibility which makes it worse.

Sure, update money laundering rules to account for Bitcoin.

And sure, clamp down hard on the guys who are deliberately defrauding people as you would with any other fraud.

Brendan


----------



## TheBigShort

Brendan Burgess said:


> I don't know that this is the right approach.



Until some actual measures or steps are proposed its not an 'approach' of any kind. Its just verbals. It provides some comfort value to those who share the outlook of wanting to destroy what they dont understand. But without any concrete measures or proposals it quickly returns to its true value - zero.



Brendan Burgess said:


> And it's not a systematic fraud



So what is it then? If its not a systematic fraud why the dogmatic 'return to zero' view?





Brendan Burgess said:


> I think that the Central Banks should warn people about their stupidity,



This would in imply that you believe central banks share your views?



Brendan Burgess said:


> but the problem is that one of the selling points is the Shortie Syndrome so such warnings probably won't be listened to - they might even boost it.



You are giving me, and people who share my views, too much credit. 
You are still too indoctrinated to the church of  Central Bank authority.



Brendan Burgess said:


> If they regulate it, it gives it a credibility which makes it worse.



So I take it steps to regulate it are ruled out in terms of the desires to 'step on it'?



Brendan Burgess said:


> And sure, clamp down hard on the guys who are deliberately defrauding people as you would with any other fraud.



This implies that there is systematic fraud. Which is it?


----------



## Brendan Burgess

TheBigShort said:


> So what is it then? If its not a systematic fraud why the dogmatic 'return to zero' view?



You are making many logical errors here.  The fact that something is not a fraud, does not mean that it is worth something. 

It is worth nothing. No one has shown any case for why it's worth anything. If you believe it's worth €50,000 and someone else who owns it believes it's worth €5,000 , it is not a fraud for him to sell it to you for €50k.

Just as if I own a property which I believe to be worth €100k but you offer to buy it for €200k, I am not defrauding you.




TheBigShort said:


> This implies that there is systematic fraud. Which is it?



Bitcoin itself is not a systematic fraud as far as I can see. 

But when there is a mass hysteria around, fraudsters will move in and rob people.  So it's the frauds around Bitcoin and other cryptos which should be stopped.

Brendan


----------



## TheBigShort

Brendan Burgess said:


> No one has shown any case for why it's worth anything.



There have been plenty of examples provided to you as to why some people _believe _it has value. What that value is anyones guess. You _believe_ it is worth zero.

Your previous post demonstrates how that belief system can work with property.
It shows how value is interpreted differently between different people. When lots of people are engaging in trading that value a market is formed and a price is set. Simples.

Because you see no value in bitcoin does not mean that it has no value to others.
Personally, I still have some doubts about bitcoin and crypto but I also consider it intriguing at this point. This is supported by the fact that I am conscious that so many intelligent, tech heads, have put forward reasoned detail as to how it all works and to date, no-one has put forward any rationale as to why it will fall flat on its face. Not only that, nobody ever approached me, through email, post, door-to-door, advertisements etc trying to sell me any bitcoin.



Brendan Burgess said:


> But when there is a mass hysteria around, fraudsters will move in and rob people. So it's the frauds around Bitcoin and other cryptos which should be stopped.



I agree. The Panorama programme the other evening purported, in its trailer, to expose a scam behind bitcoin. It didnt - it exposed a scam behind 'onecoin'? These alt coin scams, and tv programmes misleading viewers from the outset should be stopped.


----------



## tecate

Brendan Burgess said:


> Bitcoin will fall, in time, to its correct value, zero.


I don't really have a big problem with this anymore.  At the end of the day, people will decide it's value in the long run.  You could well be right - perhaps it's zero or closer to zero...or perhaps it's more.  Time will tell.



Brendan Burgess said:


> Sure, update money laundering rules to account for Bitcoin.


We have KYC (Know Your Customer) and AML (Anti Money Laundering) regulations already in place.  I'm not sure where someone could go to circumvent this right now (aside from peer to peer)?  If the on and off-ramps are regulated in this way, what other step is there to be taken in this regard?



Brendan Burgess said:


> And sure, clamp down hard on the guys who are deliberately defrauding people as you would with any other fraud.


There isn't anyone in crypto who wouldn't want this.  These sort of scams have nothing to do with crypto and are being run by Jordan Belfort types.



Brendan Burgess said:


> If they regulate it, it gives it a credibility which makes it worse.


Now that's the thought process of a banker! What a statement.  We have this ongoing stream of newsfeeds all pointing to the lack of regulation of bitcoin yet we won't regulate it because that would give it legitimacy?  Price speculation aside, I thought you accepted that this technology has a certain value (i.e. there is a use case for it - even if we were to both agree that it's future price would be near zero)?  I have no problem with regulation that does not stymie innovation.  The kind that Munger is looking for is to crush it completely. 
And by the way, whilst that would burn anyone who held any bitcoin (or other crypto), they'd want to be careful how they proceed.  Who's to say what will happen if a hard line is taken and they push it underground.  It could come back to bite them - well and truly.


----------



## jman0war

Charlie Munger, does he even have a cell phone?

I generally take the view that severe statements spewed from the mouths of snakes like him is an indicator of how threatened by the concept they are.


----------



## jman0war

Duke of Marmalade said:


> The article states that the crypto is immediately converted into USD because of the volatile nature of crypto.  And you can bet the crypto price of the apartments is determined by its current USD exchange rate and is not a fixed figure on a brochure. Same for the Canadian KFC.  This is pure gimmickry. Is anything at all on this planet truly priced in crypto?


I don't see the problem there.
Is it the expectation that every material and production line from concrete pouring to finishing, should be denominated and paid in bitcoin before it's counted as money?

The owners probably have to pay in the currency their suppliers accept.
There's probably a range of currencies involved like USD and AED.


----------



## Duke of Marmalade

jman0war said:


> The owners probably have to pay in the currency their suppliers accept.
> There's probably a range of currencies involved like USD and AED.


I'm sure you are right, why else did they drop the bitcoins like they were hot potatoes as soon as they received them?

The article says the apartments were "listed in bitcoin".  That is really hard to believe if the owners are so reluctant to hold on to the bitcoin. If indeed their costs were in fiat they were running an enormous pre-sale risk.

The real price they want is as you say some combination of fiat.  Let's say they want $200,000 for an apartment. How on earth do they set the bitcoin list price?  Do they decide at the moment the print run of the brochure is done?  Let's say they priced it when bitcoin was $20,000 that is the list price was 10 BTC.  Sure they would have been snapped up. Unfortunately the owners would have made a substantial loss by the time the sale went through and they immediately converted to USD.

I stand to be ejected, but I doubt very much that these were "listed in bitcoin" in the conventional sense of that word.  My guess is that they were listed in USD with a caption "Bitcoin most welcome".  This is fake news.

The real moral of this story is the eagerness of the writers of the article to claim this as evidence of the attainment by bitcoin of viability as a currency, further endorsed by the fact that a Canadian KFC also accepts bitcoin.  This is a cult indeed.


----------



## jman0war

There's actually a growing list of property listed in Bitcoin, and it's not even a new thing.
But maybe this is the first time your hearing of this?

On Craigslist they've also added an option to accept crypto currencies.


http://www.businessinsider.com/bitcoin-priced-apartment-in-miami-2017-12


----------



## Gordon Gekko

jman0war said:


> Charlie Munger, does he even have a cell phone?
> 
> I generally take the view that severe statements spewed from the mouths of snakes like him is an indicator of how threatened by the concept they are.



Your comments are disgraceful.


----------



## tecate

Duke of Marmalade said:


> I stand to be ejected, but I doubt very much that these were "listed in bitcoin" in the conventional sense of that word.  My guess is that they were listed in USD with a caption "Bitcoin most welcome".  This is fake news.


Clearly, they are listed in Bitcoin.  It's there to see.  However, your issue is that they have based pricing off of the USD.  Big deal. What many here (and elsewhere) fail to bear in mind is that this is a technology and a currency that is in a fluid state of development.  It took a couple of hundred years to move from coin to paper, 40 years to move from paper to plastic.  Clearly, there is a volatility issue with Bitcoin (and all crypto's) right now.  Over time, it's expected that this will dissipate. People recognise that this is an issue right now and whilst they may want to list in BTC, you can't blame them for basing pricing off the USD.  You say this means it's a failure.  You can't call that until the whole thing plays out.



Gordon Gekko said:


> Your comments are disgraceful.


  I don't think that's the case.  Munger's Berkshire Hathaway colleague - the esteemed Warren Buffett - got it wrong on Google and Amazon.  He has stated that he didn't understand them and that he doesn't invest in things he doesn't understand.  I'd imagine it's from that point of view 'jmanOwar' is coming from.  Munger calling for BTC to be wiped out is out of order.


----------



## jman0war

Pegging a price in bitcoin to the current exchange rate for USD seems reasonable enough.
Since Bretton Woods 1945 the major currencies of the world have been pegged to the USD.

The main stream media don't seem to have issue with this.
For example:  someone in the western world uses Bitcoin to purchase some illegal drug from the dark web.
The media have no problem at all citing Bitcoin as money in this scenario.
A closer look at the transactions may reveal:
The drug was farmed and produced in Columbia -> farmers paid in Peso -> drug cartel smuggled drugs into US or Europe and were paid in USD or EUR -> local dealers bought drugs in USD or EUR -> someone buys drug from dark web (local dealer) and paid in Bitcoin.
Since Bitcoin was that last currency used in this transaction, i guess that's what really counts here.
Yet if it's property, then it doesn't count?


----------



## Duke of Marmalade

jman0war said:


> There's actually a growing list of property listed in Bitcoin, and it's not even a new thing.
> But maybe this is the first time your hearing of this?
> 
> On Craigslist they've also added an option to accept crypto currencies.
> 
> 
> http://www.businessinsider.com/bitcoin-priced-apartment-in-miami-2017-12


I was unwilling to deactivate my ad blocker for that link, so I have been unable to put my finger in that wound.

Maybe it is "listed" in bitcoin but I would like to see the small print.  We have established that the Dubai guys want USD not bitcoin and having received their bitcoin they immediately convert to USD, being shrewd businessmen.  So why would they run the enormous risk in pricing and listing in bitcoin?  If BTC falls from $20K at time of the print run the apartments get snapped up and the entrepeneurs make huge losses.  If they get priced at $7K and BTC rises to $10k no sane person would touch them.

I understand that 50 of 1300 apartments were listed in bitcoin the rest presumably listed in dollars.  Assuming these are comparable apartments the list prices will need to be consistent, this would even be true for listings in different fiat.  With the BTC/$ exchange rate gyrating violently on an hourly basis the owners must have some mechanism for adjusting the list price.  My guess is that the small print indicates that  the list price is in fact a guide price and the true price is USD and the BTC price will be adjusted at the exchange rate at time of sale.


----------



## Duke of Marmalade

tecate said:


> Over time, it's expected that this (volatility) will dissipate.


I think we have 100% agreement on that


----------



## jman0war

Duke of Marmalade said:


> I was unwilling to deactivate my ad blocker for that link, so I have been unable to put my finger in that wound.
> 
> Maybe it is "listed" in bitcoin but I would like to see the small print.  We have established that the Dubai guys want USD not bitcoin and having received their bitcoin they immediately convert to USD, being shrewd businessmen.  So why would they run the enormous risk in pricing and listing in bitcoin?  If BTC falls from $20K at time of the print run the apartments get snapped up and the entrepeneurs make huge losses.  If they get priced at $7K and BTC rises to $10k no sane person would touch them.
> 
> I understand that 50 of 1300 apartments were listed in bitcoin the rest presumably listed in dollars.  Assuming these are comparable apartments the list prices will need to be consistent, this would even be true for listings in different fiat.  With the BTC/$ exchange rate gyrating violently on an hourly basis the owners must have some mechanism for adjusting the list price.  My guess is that the small print indicates that  the list price is in fact a guide price and the true price is USD and the BTC price will be adjusted at the exchange rate at time of sale.


I assume they have to pay the bank in USD


----------



## jman0war

By the way, you can download free apps for your cell phone to calculate current price of bitcoin to USD or EUR or GBP or whatever.


----------



## jman0war

In your rationale Duke, when drugs are purchased on the dark web using bitcoin, is that just a gimmick and in reality they are purchased using USD?


----------



## Duke of Marmalade

jman0war said:


> Since Bitcoin was that last currency used in this transaction, i guess that's what really counts here.
> Yet if it's property, then it doesn't count?


If the final reason for dealing in bitcoin was because that was genuinely the preferred "currency" then yes that is bitcoin acting as a currency.  Following on your example that reason may be a desire for concealing criminality.  And indeed that may be behind the listing of apartments in bitcoin. 

I remember the old days when life companies, the banks, nay even An Post advertised for funds with the caption "complete confidentiality guaranteed".  We all know what that was a euphemism for.  So possibly listing apartments for sale in bitcoin is a euphemism for "hot money welcome".  That's fair enough, I am not joining the moral/eco crusade against bitcoin but if this is its ultimate destiny as a currency that would not justify anything near current price levels which are based on a speculation that it will eventually become mainstream.


----------



## jman0war

Duke of Marmalade said:


> If the final reason for dealing in bitcoin was because that was genuinely the preferred "currency" then yes that is bitcoin acting as a currency.


I think imaging their reasons is immaterial.
They could accept sea shells for the apartments and that means they've used sea shells as a currency.


----------



## Fella

Why can clearly clever people like Duke etc not accept that Bitcoin will be worth whatever people are willing to pay for it ? I am just confused by this , I think Bitcoin is a joke but clearly others don't and I realise I can't convert these people and I can't lower the value of Bitcoin for them , if people want to accept and use Bitcoin to buy things then they will , all these arguments are pointless its worthless , it will eventually be worthless , nobody knows other than it will be worth what people are willing to pay for it like lots of other worthless things in life that people value.


----------



## Brendan Burgess

Hi Fella

Bitcoin is worthless today. 

It is priced at $10,000. It's price is $10,000 more than it is worth. 

Eventually its price will fall to its worth. 

Or to put it in your language, people will only be prepared to pay nothing or close to nothing for it.

Brendan


----------



## Fella

Brendan Burgess said:


> Hi Fella
> 
> Bitcoin is worthless today.
> 
> It is priced at $10,000. It's price is $10,000 more than it is worth.
> 
> Eventually its price will fall to its worth.
> 
> Or to put it in your language, people will only be prepared to pay nothing or close to nothing for it.
> 
> Brendan



Saying the same thing over and over doesn't make it any more correct though. The longer it goes on like it is the less chance your prediction will come true , at what stage are you going to admit your wrong? 
How can you make the world see sense Brendan ? I can tell everyone in the world don;t bother reading horoscopes or paying a fortune teller its worthless they won't change there mind and its a multi billion pound industry. 

Me saying " Fortune telling is worthless and eventually everyone will see so and no one will ring them 2 euro a minute lines " I could repeat that for my life but i'd be right and be wrong , your right and your wrong also.


----------



## tecate

Duke of Marmalade said:


> We have established that the Dubai guys want USD not bitcoin and having received their bitcoin they immediately convert to USD, being shrewd businessmen.


You've 'established' no such thing.  They facilitated payment in BTC because clearly there are customers out there that want to pay in BTC.  Being 'shrewd businessmen', they may have converted to USD (if that's the case?) as it's accepted by all that there is a price volatility issue with Bitcoin currently.  So what? 



Duke of Marmalade said:


> I think we have 100% agreement on that


You can rolly eyes away all you want.  Establishing a global currency doesn't happen overnight.  You'll baulk at the suggestion but there are strong indications that BTC is less volatile than it used to be (and yes, you'll use the recent months example - and in spite of that, it's true).  You can continue to judge an unfinished currency that has as yet not come even close to reaching maturity at this stage in its development.  However, to do so is inaccurate in my view....but each to their own.

@Brendan / Fella :  I'm onboard with the idea that it can go down to zero...i'm not stating that it will - I'm just open to the possibility that it might.  However, must it play out this way?  If we've established that it's all related to market sentiment, can you not envisage a scenario where such sentiment doesn't fall by the way-side?


----------



## Brendan Burgess

Fella said:


> I can tell everyone in the world don;t bother reading horoscopes or paying a fortune teller its worthless they won't change there mind and its a multi billion pound industry.



You are right. It is very difficult to change people's mind with logic. 

Remember the Women Empowering Women?  It's not unlike Bitcoin. They claimed it was a way to empower women and that men wanted to close it down because it wasn't male dominated.  There was no talking to them. 

Likewise there is no talking to people who would exchange a house for a tulip or $20,000 for a bag of hot air, even if it's based on blockchain technology. 

But bubbles burst and this will burst. 

It is important to repeat it though - it's not going to convert Shortie or FP or any of the others. But it may well help someone who is considering it. And it may help Shortie.  He has reduced his position and maybe the discussion on AAM has helped him making this decision. 

Brendan


----------



## Brendan Burgess

tecate said:


> If we've established that it's all related to market sentiment, can you not envisage a scenario where such sentiment doesn't fall by the way-side?



I might undervalue a house at €100k and you might overvalue it at €200k. But it's worth something. Its worth can be estimated by the rent saved over my life-time or some other financial calculation.   Sentiment may be optimistic for many years or pessimistic for many years.

But Bitcoin is worth nothing.  Sentiment and greed has given it a price for which there is simply no financial basis. That will collapse at some stage. 

Brendan


----------



## Fella

Brendan Burgess said:


> You are right. It is very difficult to change people's mind with logic.
> 
> But bubbles burst and this will burst.
> 
> It is important to repeat it though - it's not going to convert Shortie or FP or any of the others. But it may well help someone who is considering it. And it may help Shortie.  He has reduced his position and maybe the discussion on AAM has helped him making this decision.
> 
> Brendan



The more people come out and talk down Bitcoin publicly the higher the price seems to get , what if it ends up been valued at 100k a coin we may not be helping shortie at all . 

I was thinking about bubbles I think people are too quick to point to bubbles that burst after the event , there are lots of things that bubbled but never burst then people never call them a bubble in the first place , so do all bubbles burst probably not , i think its some kind of bias to say " bubbles burst" that is generally said in hindsight.

I think it would be fair to say if you couldn't of envisioned Bitcoin ever going from 0 to 20k then you are not in the position to point to its future direction, thats the way I judge myself.


----------



## tecate

Brendan Burgess said:


> But Bitcoin is worth nothing.  Sentiment and greed has given it a price for which there is simply no financial basis. That will collapse at some stage.
> Brendan


I keep an open mind.  Perhaps you're right.  However, latent greed arrived in November.  For most before that, it wasn't such a speculative item.  I myself didn't get involved in BTC with a view towards making fast money.  I believed in the idea of it - as did most way back then - as a transactional currency that was out from under the thumb of the banking elite.  It's fair to say I think - that most didn't see this major rise in value coming pre-2013/4.  I did get caught up in it - and can't complain about that but it wasn't the pretext for my initial involvement.

If everything works on sentiment and greed, can a FIAT currency not fall then...?


----------



## Sunny

tecate said:


> I keep an open mind.  Perhaps you're right.  However, latent greed arrived in November.  For most before that, it wasn't such a speculative item.  I myself didn't get involved in BTC with a view towards making fast money.  I believed in the idea of it - as did most way back then - as as transactional currency that was out from under the thumb of the banking elite.  It's fair to say I think - that most didn't see this major rise in value coming pre-2013/4.  I did get caught up in it - and can't complain about that but it wasn't the pretext for my initial involvement.



Problem is that Bitcoin was always speculative. It's not a currency. It's simply an asset that people own. They might be able to exchange it for something (unlikely at the moment) so all they can do is buy and sell it just like any other unproductive asset like a limited edition picture. Mightn't always be the case but it is now. The whole area of Bitcoin and other crypto-currencies has been taken over by speculators and complete fraudsters. Of course, there are people like yourself who genuinely believe in the concept and with good reason but there is still no reason for all this hype around something like this. Other than it has turned into a complete irrational bubble.

Out of curiosity, does anyone know what the breakeven cost of Bitcoin is? At what price, does it stop being cost effective to mine as I would imagine the mining costs are huge.


----------



## tecate

Sunny said:


> Problem is that Bitcoin was always speculative.


I don't agree with that. That wasn't the reason it was established in the first instance.  I've just told you I didn't get involved in btc for speculative reasons (at the outset).



Sunny said:


> It's not a currency. It's simply an asset that people own.


It's recognised as a currency in many countries. 



Sunny said:


> They might be able to exchange it for something (unlikely at the moment) so all they can do is buy and sell it just like any other unproductive asset like a limited edition picture. Mightn't always be the case but it is now.


It can be used to purchase goods and services.  Is that function severely curtailed at the moment given that BTC has hit a scaling issue? Absolutely.  Can that issue be overcome? - the signs are that it can and it will...and most likely before the year is out, we will see signs of that.



Sunny said:


> The whole area of Bitcoin and other crypto-currencies has been taken over by speculators and complete fraudsters.


Yes, fickle money came into play from November onwards - no doubt.  As regards the fraudsters, anyone can see that they are just using 'bitcoin' as a cover.  Previously, it was penny stocks.  Next year, they will cloak their scam in something else.  They have nothing to do with cryptocurrency in reality.



Sunny said:


> Of course, there are people like yourself who genuinely believe in the concept and with good reason but there is still no reason for all this hype around something like this. Other than it has turned into a complete irrational bubble.


In the earlier years, I wanted people to know about it and understand it.  This sensationalising of it ...I agree that it's unhelpful....and it's not helping it to be understood properly either.  I've benefited from it - but that's just happenstance.


----------



## jman0war

Sunny said:


> Problem is that Bitcoin was always speculative. It's not a currency. It's simply an asset that people own. They might be able to exchange it for something (unlikely at the moment) so all they can do is buy and sell it just like any other unproductive asset like a limited edition picture.


I don't follow this line of thought.
Bitcoin was designed to be a currency and since it's inception right up to this very day, people use it as such.
In fairness I would say the majority of holders of bitcoin are not using it as a transaction medium every day, but that doesn't mean they are unable to.

Certainly since 2017 when blocks became full we've seen bitcoin use cases change.
But it's a work-in-progress and since Layer2 solutions are basically coming online now, i would expect to see that transactional use case start getting more common.


----------



## Duke of Marmalade

Sunny said:


> Out of curiosity, does anyone know what the breakeven cost of Bitcoin is? At what price, does it stop being cost effective to mine as I would imagine the mining costs are huge.


The breakeven cost is I guess a few cents.  That is the minimum of effort that would be necessary to secure the blockchain.  Securing the blockchain is no big deal but what Satoshi decreed in the protocol was that a block could only be added every 10 mins.  There is a reward in bitcoin (I think currently 12.5 bitcoin) for winning the puzzle race to add the next block to the chain.  That is $125K to the winner.  So naturally gone are the days when anyone with a home laptop could win the race.  The difficulty of winning the puzzle race is automatically adjusted to target that 10 mins objective.  With the rewards so high the puzzle has become a staggering trial and error "find the hashkey" task which can only be realistically tackled by mega computing power.


----------



## tecate

Duke of Marmalade said:


> The breakeven cost is I guess a few cents.





Duke of Marmalade said:


> The breakeven cost is I guess a few cents.  With the rewards so high the puzzle has become a staggering trial and error "find the hashkey" task which can only be realistically tackled by mega computing power.


I'm not sure how you balance those two statements.  I've heard figures bandied about - I don't have a link to same right now but breakeven is currently a considerable amount.  Again this (energy use) is something that will evolve.  The addition of level 2 solutions may mean that the mean electricity usage may drop considerably.  Otherwise, miners are getting creative and partnering with energy producers who simply waste energy at the point of source (energy that can't go onto the energy network at that time) by co-locating.  There are also other crypto's that are not as energy hungry...and perhaps in the future btc may lose ground to them (if mean energy usage doesn't fall back some).


----------



## jman0war

In my opinion the energy-use 'cost' of bitcoin is simply market economics at work.
If bitcoin was not profitable to mine than miners wouldn't do it.
Less miners means the difficulty adjustment lowers so less computations are required to solve the puzzle (less energy used).

The "problem" if there is one, I guess is how that electricity generation occurs.
But this is not a bitcoin problem.

Additionally what i think is occuring here, is that some people would rather that electricity be used for other things.
But that's not really how markets work, unless you want to distort the market via dictates and interference.


----------



## TheBigShort

Brendan Burgess said:


> And it may help Shortie. He has reduced his position and maybe the discussion on AAM has helped him making this decision.



It was the trajectory of the declining price that spooked me and caused me to sell. Ive always been open to, and still am, that bitcoin _could _return to zero. But I dont think it will anytime soon. 



Brendan Burgess said:


> it's not going to convert Shortie or FP or any of the others.



Unfortunately you have a habit of misrepresenting my views. Again, to repeat, im open to the possibility that it may return to zero. I just dont see any reason for that occuring anytime soon. 
However, I am open to its potential. I first heard of bitcoin when it was circa €80. I was as dismissive as you. I first tried to buy some when it was €800 out of pure curiosity. I eventually both some at €2350, again out of curiosity and I went on a speculative ride. Its paid off, but im more interested in this space more than ever. 
Its fascinating to dip your toe in the water and to listen to this tech heads to the ideas and concepts they have. 
I cant say I understand all of it or where its all going but I strongly believe that the way people transact with other is heading for fundamental change. 
Bitcoin may, or may not, be a part of that. If it is, it has value.



Brendan Burgess said:


> I might undervalue a house at €100k and you might overvalue it at €200k. But it's worth something. Its worth can be estimated by the rent saved over my life-time or some other financial calculation.



An Elvis Presley Gibson guitar sold for $300k at auction. These guitars are mass produced and retail between€500-€3,000. 
The $300k price tag is generated by nothing other than sentiment, speculation and/or greed.


----------



## Duke of Marmalade

tecate said:


> I'm not sure how you balance those two statements.


I suppose "breakeven" costs needs defining.  I take it to mean what is the price of bitcoin that just justifies the mining costs.  That depends on two things - the price of bitcoin;  the difficulty of the puzzle.  They interact with each other.  As the price goes up the rewards attract more CPU power, currently far more CPU power than is necessary for the basic purpose of mining - to secure the blockchain.  The result is that to achieve the 10 minutes objective the difficulty of the puzzle which secures the blockchain has to be made astronomically greater than is needed for purpose.

If bitcoin falls in price there would not be sufficient reward for current CPU power and so marginal miners will drop away making it longer than 10 mins to win the race to add a block.  But then the protocol kicks in to make the puzzle easier.  This process can continue until the bitcoin price is back at its earlier levels of a few cents.  If it fell any further then there wouldn't be enough interested CPU power to meet the minimum standards for securing the blockchain.  That is what I call the breakeven cost of bitcoin mining.  Though in theory transaction costs could kick in which would adjust to reward the minimal CPU mining power necessary to secure the blockchain.

Another definition might be what is the bitcoin price that would keep current committed CPU power still interested.  I don't know the answer to that.


----------



## Brendan Burgess

TheBigShort said:


> Unfortunately you have a habit of misrepresenting my views.



Have I? If I have this is not an example. 

I am not representing your views at all.  I am just pointing out that what we say is unlikely to change your views. 


Brendan


----------



## tecate

The point I was making is that break even cost is far higher than the few centsyouc alluded to.


----------



## Brendan Burgess

TheBigShort said:


> An Elvis Presley Gibson guitar sold for $300k at auction. These guitars are mass produced and retail between€500-€3,000.



So what? 

A first edition of Ulysses owned by James Joyce may be worth €1m while you can buy a copy for €5 in Easons.

These have associative value.  They are often unique.  

Brendan


----------



## Duke of Marmalade

tecate said:


> The point I was making is that break even cost is far higher than the few centsyouc alluded to.


Obviously that is the case today.  I thought _Sunny _was trying to get at what price does it become unviable for the miners. The answer is practically never, there just would be less miners with much easier puzzles but they would be capable of securing the blockchain merely on transaction fees.  That is how Satoshi planned it.


----------



## TheBigShort

Brendan Burgess said:


> I am not representing your views at all.





Brendan Burgess said:


> I am just pointing out that what we say is unlikely to change your views.



But im open to changing my mind on all of this. I have that repeatedly said that.
If you happen to say something of significance in this area, it would be folly of me to ignore it.
"Bitcoin is worthless. It will return to zero", says something, but also lacks any persuasive argument at this point.



Brendan Burgess said:


> A first edition of Ulysses owned by James Joyce may be worth €1m while you can buy a copy for €5 in Easons.
> 
> These have associative value. They are often unique.



'Associative value'? What financial calculation determines that?


----------



## jman0war

> These have associative value.
> Brendan


"Associative value", really? 
You are now in the realm of the Subjective Theory of Value.

Welcome.


----------



## Brendan Burgess

TheBigShort said:


> "Bitcoin is worthless. It will return to zero", says something, but also lacks any persuasive argument at this point.



That suggests to me that you are not open.

This is simple enough.

I have a bag of hot air in my  hand. I saw it's worth $20,000 , I must then show it's worth that. 

It is not enough to tell you to disprove it. 

Bitcoin is worth nothing. You might be prepared to pay $10,000 for it. But that does not mean that it's worth it. 

Bitcoin has no associative value. It has no artistic merit.  

If you can't understand the difference between a few digits and a copy of Ulysses owned by James Joyce, then fire ahead buying Bitcoin.

I am unable to change your mind with reason.

Brendan


----------



## jman0war

You haven't made any actual arguments.
Only statements.

You haven't even explained your theory of "intrinsic value."

I'll help you though, it usually refers back to the Labour Theory of Value  -  thoroughly debunked.


----------



## Duke of Marmalade

jman0war said:


> I think imaging their reasons is immaterial.
> They could accept sea shells for the apartments and that means they've used sea shells as a currency.


The stated thrust of the article was to demonstrate that bitcoin was rapidly gaining viability as a currency.  I'm sorry but a situation where the vendors get rid of the bitcoin as quickly as they might a hot potato and that the main "natural" purchasers were the criminal  classes does little to prove the case.

Let me explain what I mean by "natural".  For a US citizen the natural currency is the dollar, for a UK citizen it is the pound etc.  The only natural users of bitcoin would appear to be miners or criminals.


----------



## TheBigShort

Brendan Burgess said:


> That suggests to me that you are not open.
> 
> This is simple enough.
> 
> I have a bag of hot air in my hand. I saw it's worth $20,000 , I must then show it's worth that.
> 
> It is not enough to tell you to disprove it.
> 
> Bitcoin is worth nothing. You might be prepared to pay $10,000 for it. But that does not mean that it's worth it.



Obviously if you consider it to be nothing more than hot air its not worth it. 
If you consider it to have the potential to establish an alternative means of transacting wealth without the interference of central banks and governments distorting the price, then it has value. 
What that value is, is determined by the market.

I certainly wasnt equating Joyce to bitcoin. Merely pointing out that the additional value added to first edition copy owned by Joyce, the associative value, is highly speculative and determined only by those who with the sentiment for that associative value. 
Thus, such a copy of Ulysses holds value far above anything I would consider it to be worth.  I might think it is worth €10k. Somebody might pay €100k for it. Personally, the 90k difference is nothing more than hot air. 
But who am I to decide? Surely the market is the efficient way of deciding the price of anything?


----------



## jman0war

> maybe it's me but I am finding it rather difficult to get my points across. I presume when sea shells were the chosen currency it was the best available. All conventional currencies have the feature that they are for many the best available for the purpose. I posit that when it comes to bitcoin that (a) a very tiny proportion of transactions are for purchasing goods and services (b) of these transactions very few would be the "natural" choice of currency. The exception might be the criminal classes.


If people use Bitcoin as a transactional medium, using it as "money"; then that is what it is.
If people use use sea shells as a transactional medium, then so it is also "money".

Money and currency; is an expression of value between contracting parties.


----------



## tecate

Duke of Marmalade said:
			
		

> Let me explain what I mean by "natural".  For a US citizen the natural currency is the dollar, for a UK citizen it is the pound etc.


So we can NEVER look to change that? Very open minded.


			
				Duke of Marmalade said:
			
		

> The only natural users of bitcoin would appear to be miners or criminals.


Thank you - so you're calling me a criminal now.  Classy.


----------



## jman0war

Duke, in response to the mis-management of the '_money_'; Bitcoin was created.
With Bitcoin we are separating Money from State.


----------



## Duke of Marmalade

tecate said:


> Thank you - so you're calling me a criminal now.  Classy.


I presumed that the only folk whose main source of income was in bitcoin and who were therefore natural users thereof were miners and criminals. But if your main source of income is bitcoin and you belong to neither class, sincere apologies.  Do you mind telling AAM what your main source of income is?  I'm truly intrigued.

I also note that your faith in bitcoin is founded on the very open minded vision that US and UK citizens will abandon their cherished currencies in favour of the crypto.  You are right, I have a closed mind on that, it won't happen.  The fact that there are people like you who foresee that happening helps explain the ludicrous price.


----------



## MrEarl

Hi Duke,

 GMO Internet in Japan are offering to pay part salaries in Bitcoin from early next year.  Perhaps there are other employers also offering to provide the same, I'm not sure just recall seeing mention of this particular one.

 Wagepoint in Canada  are also providing payroll facilities for companies who are paying staff in Bitcoin and are reporting some take up (albeit modest).

Anyway, the point being that people may be getting Bitcoin as a result of their regular employment


----------



## jman0war

Lots of companies in the crypto space pay their employees in crypto.
This is not new.


----------



## TheBigShort

Duke of Marmalade said:


> also note that your faith in bitcoin is founded on the very open minded vision that US and UK citizens will abandon their cherished currencies in favour of the crypto. You are right, I have a closed mind on that, it won't happen



Citizens rarely if ever abandon their currencies willingly - the euro is a notable exception where 18 countries did so.

Economic forces will determine whether or not citizens abandon their currencies or not for some other form of currency.
The fact that the concept of cryptocurrency has emerged, regardless of its apparent flaws and inefficiencies, should give any reasoned person interested in the concept pause for thought.
Perhaps bitcoin will crash to zero. Who knows?   But the concept is there and in my opinion, here to stay.
Even Brendan acknowledged that cryptocurrency may have value in the future - he is just sure it wont be through bitcoin.


----------



## Brendan Burgess

TheBigShort said:


> Perhaps bitcoin will crash to zero. Who knows?



I do, and so do most observers who are not caught up in the bubble and so can make a realistic assessment. 

Brendan


----------



## jman0war

Duke of Marmalade said:


> Let me explain what I mean by "natural".  For a US citizen the natural currency is the dollar, for a UK citizen it is the pound etc.  The only natural users of bitcoin would appear to be miners or criminals.


Your concept of 'natural' currency is totally contradicted in many places in the world though, such as Mexico, Panama, Argentina, Costa Rica, Honduras and even Zimbabwe where people will accept USD even while it's not an "official" currency of those countries.

Add: Canada, Cambodia, Peru, Afghanistan and probably more.

Heck even in Ireland, British Pound notes were accepted as money in shops and pubs before the Euro. Despite that currency having no legal tender status in RoI


----------



## TheBigShort

British pound notes are still accepted in parts of Ireland, as is the Euro in parts of the  UK - namely border areas of Ireland. 

Interestingly £Stg issued in NI is not accepted in parts of UK.

Economic forces ultimatley dictate what we use for currency. Central banks are mere facilitators.


----------



## TheBigShort

Brendan Burgess said:


> I do, and so do most observers who are not caught up in the bubble and so can make a realistic assessment.
> 
> Brendan



Doesn't make you or 'most observers' right, does it?


----------



## tecate

Duke of Marmalade said:


> I presumed that the only folk whose *main source of income* was in bitcoin and who were therefore natural users thereof were miners and criminals.


That's not what you said but thanks for clarifying. It's unreasonable to apply that filter given that you know well the delicate embryonic stage crypto is at.  I'm sure there are plenty who accept it as a form of payment but it isn't going to be their main source of income as we have not got the adoption levels yet.  Furthermore, you're well aware that there's a scaling issue that needs to be resolved right now.



Duke of Marmalade said:


> I also note that your faith in bitcoin is founded on the very open minded vision that US and UK citizens will abandon their cherished currencies in favour of the crypto.  You are right, I have a closed mind on that, it won't happen.  The fact that there are people like you who foresee that happening helps explain the ludicrous price.


I believe that they can co-exist - and that would be a fundamental change in itself (with crypto or bitcoin being used extensively).  You gave the UK and US as examples.  Who knows what the future holds. Who knows how much further FIAT currencies will continue to be debased.  Furthermore, there are other national currencies which find themselves in turmoil from time to time (others have given you current examples).  If your FIAT is worth jack (and those are circumstances that do happen in some countries), you think that as a citizen you would give a damn about that currency if you could use an alternative?  If that alternative continues to become more stable as it progresses, it seems logical to me that there may be an even greater adoption of it - in such places.
I also believe that a cryptocurrency could potentially act as a world reserve currency in the much longer term.


----------



## Duke of Marmalade

jman0war said:


> Heck even in Ireland, British Pound notes were accepted as money in shops and pubs before the Euro. Despite that currency having no legal tender status in RoI


Good now I have a hook on which to hang my concept of natural currency.  Retailers in Newry have the £ as there NC but they recognize that many of their customers have the € as their NC.  So most will accept both.  This is not a gimmick.  Some will even dual price though many will price in £ but fix an exchange rate.  Either works because of the stickiness of the exchange rate.

So a buyer’s NC is the one which is most convenient.  This is usually the currency of the source of income.  For bitcoin that would only include miners.  But there are possibly two other constituencies whose NC is bitcoin.  Criminals whose source of income is fiat but want to hide that.  Also Zimbantines.  These our folk who distrust their income currency and immediately convert to something else, usually a reserve currency like the $ but possibly BTC.  These people tend to come from countries like Zimbabwe or Argentina but there are €-Zimbantines like _tecate_. 

Now getting back to the article.  A Canadian KFC accepting bitcoin is definitely a gimmick.  No way are their folk whose natural currency for buying a snack box is bitcoin.

The apartments are different.  There may be criminals and Zimbantines who find it more convenient to use bitcoin.

Bottom line is that it is pathetic to read an article like this clutching at these rare sightings as evidence that bitcoin has come of age as a transactional currency.


----------



## tecate

Duke of Marmalade said:


> Also Zimbantines.  These our folk who distrust their income currency and immediately convert to something else, usually a reserve currency like the $ but possibly BTC.  These people tend to come from countries like Zimbabwe or Argentina *but there are €-Zimbantines like tecate.*


Would you like to explain what it is you're babbling on with here in terms of your reference to me?



Duke of Marmalade said:


> Bottom line is that it is pathetic to read an article like this clutching at these rare sightings as evidence that bitcoin has come of age as a transactional currency.


Who said that Bitcoin has 'come of age'?  I think everyone here has acknowledged that bitcoin - and cryptocurrencies generally - are still in development and have not in any way reached maturity.



Duke of Marmalade said:


> A Canadian KFC accepting bitcoin is definitely a gimmick.  No way are their folk whose natural currency for buying a snack box is bitcoin.


It really is irrelevant whether you believe it to be a 'gimmick' or not.  The bottom line is that it's one more entity that accepts BTC payment.  It only needs for a modest but ongoing momentum in this direction for BTC to become a realistic transactional currency.  If Lightning Network is implemented successfully, then it will become a much more realistic prospect.

As regards your view that only criminals will use bitcoin, what of the extortionate rates of the $500 billion / year remittance industry?  We're talking about western union and the likes. One of the largest remittance markets is the Philippines.  Are Filipinos using a bitcoin remittance startup ( rebit.ph ) for the purposes of more cost effective remittances all criminals?

What of those that have to use 'wire transfers' for sending money internationally?  Are they criminals also if they use a crypto based solution?  If you have sent an international wire transfer, you will understand just how archaic and expensive that system is.


----------



## Gordon Gekko

For the love of God...nobody is saying that the currencies of the future won’t be digital in nature. It’s just that they’ll be the Digital Dollar etc and they’ll be backed by the Federal Reserve and the US Military. A few yahoos in their bedrooms can do a lot, but they can’t subvert the entire monetary system. All of the issues highlighted by others are reasons why Bitcoin and unregulated currencies generally are going nowhere. Bitcoin will become of negligible value; it is WorldofFruit.Com whereas Blockchain technology may be analagous to the internet.


----------



## tecate

Gordon Gekko said:


> For the love of God...nobody is saying that the currencies of the future won’t be digital in nature. It’s just that they’ll be the Digital Dollar etc and they’ll be backed by the Federal Reserve and the US Military.


Apples and Oranges.  You're talking about *centralised* digital currencies whilst suggesting there is no room for a *decentralised* digital currency.  As for the former, it will be interesting to watch the implementation.  There's a hell of a difference between one getting hacked as opposed to the other in terms of the fallout.



Gordon Gekko said:


> A few yahoos in their bedrooms can do a lot, but they can’t subvert the entire monetary system.


Firstly, you can try and label it in that way to suit your narrative but it's gone beyond 'yahoo's in their bedrooms' as you put it. As regards 'subverting the entire monetary system', who says they can't co-exist?  That's not a case of 'subverting the entire monetary system'.



Gordon Gekko said:


> All of the issues highlighted by others are reasons why Bitcoin and unregulated currencies generally are going nowhere.


Regulated in Japan - and regulation clearly on the way elsewhere shortly.  There has been talk of nothing else in 2018.



Gordon Gekko said:


> it is WorldofFruit.Com whereas Blockchain technology may be analagous to the internet.


You're talking about *centralised* applications of the technology.  They can't possibly have the same benefit.


----------



## Gordon Gekko

The salient point is that the established monetary system cannot tolerate a meaningful non-centralised currency because of the disruption it could cause.

A few yahoo hipsters paying for soy lattes with their Bitcoin do not a currency make.


----------



## TheBigShort

Gordon Gekko said:


> The salient point is that the established monetary system cannot tolerate a meaningful non-centralised currency because of the disruption it could cause.



Correct. 

At this juncture bitcoin has no meaningful significance to the existing monetary system. But if it ever were to, how would governments curtail its impact on the system?


----------



## tecate

Gordon Gekko said:


> The salient point is that the established monetary system cannot tolerate a meaningful non-centralised currency because of the disruption it could cause.


Ok, so why don't they just summarily ban it then - across the board?


----------



## Gordon Gekko

TheBigShort said:


> Correct.
> 
> At this juncture bitcoin has no meaningful significance to the existing monetary system. But if it ever were to, how would governments curtail its impact on the system?



Criminalise it. Shut down the on and off ramps.  

Tax gains on Bitcoin at 90%.

As I understand it, some of the mainstream banks will no longer facilitate transfer to/from Coinbase.


----------



## Duke of Marmalade

tecate said:


> Would you like to explain what it is you're babbling on with here in terms of your reference to me? (calling me a €-Zimbantine)


Tut, tut.  I'll go slowly here.  You rebuked me for insinuating you were a criminal for which I sincerely apologised.  I presumed you had made your inference because I said the only natural users of bitcoin were miners and criminals.  I therefore concluded that bitcoin was your natural currency but you were neither a miner nor a criminal. With me so far?

On considering this and also inputs from others I realised that I was forgetting the main target audience for bitcoin - Zimbantines - people who do not trust the currency of their income and immediately convert it and save it in bitcoin.  You had to be one of them.  And here I admit I made a rash leap of deduction, I presumed your primary income was €.  Of course that may not be true.  Can you disclose what is the currency of your primary source of income?


----------



## TheBigShort

Gordon Gekko said:


> Criminalise it. Shut down the on and off ramps.
> 
> Tax gains on Bitcoin at 90%.
> 
> As I understand it, some of the mainstream banks will no longer facilitate transfer to/from Coinbase.



It would be interesting to see how it could be criminalised. Would it be illegal to possess it, or trade it, or both? 
As its not tangible, and exists as basically code on a computer, its hard to imagine how legislators could actually legislate for that, without that legislation being easily circumvented. 

As for the tax, why hold back and just tax gains at 100%. Certainly that would flush out the speculators. On the other hand it would probably require global agreement, otherwise capital outflows would occur to regions that offer preferential rates. I think this is apparently China's biggest issue with bitcoin at the moment. I dont see any other nations rushing to assist with their predicament.

Ive heard about banks refusing to facilitate credit card payments, which is welcome. But debit card payments, the money belongs to the account holder. As long as Coinbase complies with its regulatory requirements then banks have no business or authority to stop me engaging in trade with them. This is tenet of free trade is it not?


----------



## tecate

Duke of Marmalade said:


> ..for which I sincerely apologised.





Duke of Marmalade said:


> Tut, tut.  I'll go slowly here.  ..With me so far?


I don't much care for your bad manners and clear lack of sincerity.



Duke of Marmalade said:


> I was forgetting the main target audience for bitcoin - Zimbantines


I think it would be far more useful to stick with the english language in discussing the topic - I can't see how making up words assists.


Duke of Marmalade said:


> I said the only natural users of bitcoin were miners and criminals.


Nonsense.  That's you framing it with your 'natural users' to suit your own narrative.  A 'natural' user of bitcoin is anyone who chooses to use it - it's as simple as that.  This nonsensical suggestion that it's only relevant if an individual carrys out every transaction through BTC in 2018 doesn't hold water.  You know perfectly well that any such change would be gradual (even if I or anyone else here was suggesting that it's likely that every such transaction would be carried out in BTC - we're not.  BTC (or another crypto) can exist alongside FIAT).  Furthermore, I've given you other use cases for the use of bitcoin which you choose to ignore.


----------



## Gordon Gekko

TheBigShort said:


> Ive heard about banks refusing to facilitate credit card payments, which is welcome. But debit card payments, the money belongs to the account holder. As long as Coinbase complies with its regulatory requirements then banks have no business or authority to stop me engaging in trade with them. This is tenet of free trade is it not?



Free trade doesn’t matter when it comes to regulated industries like banking and finance. Banks and authorities are free to blacklist and refuse to deal with counterparties. Which makes sense in the case of Cojnbase and assets like Bitcoin. Goldman Sachs have due diligence to ensure they’re not dealing with Al Queda or the Cali Cartel; regulation in the crypto-world is almost non-existent.


----------



## tecate

Gordon Gekko said:


> Goldman Sachs have due diligence to ensure they’re not dealing with Al Queda or the Cali Cartel


Is that the same 'due diligence' as Rabobank use?  The same as what RBS, Barclays & HSBC use?



Gordon Gekko said:


> regulation in the crypto-world is almost non-existent.


With the exception of Japan, regulation has not been fully framed for crypto elsewhere.  However, as you will be aware, the intentions are such that this will change shortly.


----------



## Duke of Marmalade

Cryptocoin123 said:
			
		

> Bitcoin seems to be turning viable as the market and the big players accept it as a mode of payment. From _Canadian KFC_ to real estate in Dubai, Bitcoin fever appears to be high globally.


_tecate _I was only challenging this hyperbole in the link from _jman_.  I think you agree with me that this claim is OTT.  There was no need for you to adopt faux indignation at me supposedly tarnishing you as criminal.


----------



## tecate

Duke of Marmalade said:


> _tecate _I was only challenging this hyperbole in the link from _jman_.  I think you agree with me that this claim is OTT.


I would say that the media will always over-egg stuff.  In this case, it's significant but of minor significance.  In the same way, over many weeks in 2018 they have sensationalised some aspects in relation to bitcoin and crypto that presented it in a negative light.



Duke of Marmalade said:


> There was no need for you to adopt faux indignation at me supposedly tarnishing you as criminal.


There was every need to point out that people other than criminals use bitcoin (which is essentially what you are suggesting).  Furthermore, that many will use it more when circumstances allow.  These things don't happen overnight.  The banks had been tar and feathering BTC with this nonsense for years.  It's outgrown that.


----------



## TheBigShort

Gordon Gekko said:


> Free trade doesn’t matter when it comes to regulated industries like banking and finance. Banks and authorities are free to blacklist and refuse to deal with counterparties. Which makes sense in the case of Cojnbase and assets like Bitcoin. Goldman Sachs have due diligence to ensure they’re not dealing with Al Queda or the Cali Cartel; regulation in the crypto-world is almost non-existent.



If my bank wants to blacklist me or stop transactions between me and Coinbase it has to have some reasonable and evidential basis for doing so. 
If they suspect there is illicit activity then fine. But it needs to backed up with some reasonable basis. Otherwise it is open to legal challenges in the courts. Its one of the benefits of being an EU citizen. 
If banks were allowed to curtail trade at their own sole discretion then that leaves trade open to all sorts of interference, manipulation, unfair advantage etc.


----------



## Gordon Gekko

tecate said:


> Is that the same 'due diligence' as Rabobank use?  The same as what RBS, Barclays & HSBC use?
> 
> With the exception of Japan, regulation has not been fully framed for crypto elsewhere.  However, as you will be aware, the intentions are such that this will change shortly.



Specific failures around due diligence are hardly the same as there being no due diligence; surely you must see that? Cryptocurrencies are like the Wild West, and that’s what will be their undoing. I have no doubt that within my lifetime “digital Dollars” might be the norm. But it won’t be Bitcoin.


----------



## Gordon Gekko

TheBigShort said:


> If my bank wants to blacklist me or stop transactions between me and Coinbase it has to have some reasonable and evidential basis for doing so.
> If they suspect there is illicit activity then fine. But it needs to backed up with some reasonable basis. Otherwise it is open to legal challenges in the courts. Its one of the benefits of being an EU citizen.
> If banks were allowed to curtail trade at their own sole discretion then that leaves trade open to all sorts of interference, manipulation, unfair advantage etc.



BigShort, no it doesn’t.

If a counterparty does not have equivalent standards, a bank are free to refuse to engage.

There are swathes of jurisdictions that are deemed “high risk” for example and some banks refuse to transact with them. I had personal experience of that once. Refusing to transact with a small bank in South America is analagous to refusing to transact with an unregulated cryptocurrency repository.

Surely you get that, or are you just hopping the ball?


----------



## TheBigShort

Gordon Gekko said:


> BigShort, no it doesn’t.
> 
> If a counterparty does not have equivalent standards, a bank are free to refuse to engage.
> 
> Surely you get that, or are you just hopping the ball?



Surely you got the part earlier where I stated that as long as Coinbase are compliant with any regulatory requirements applicable to them then banks have no business and no authority to interfere with my trade with Coinbase? 

On what legal basis can a bank block trade between me and Coinbase? This is not China or NK. If there is no reasonable basis to suspect illicit activity then me and Coinbase and everyone else for that matter are free to engage in trade with one another.


----------



## Gordon Gekko

TheBigShort said:


> Surely you got the part earlier where I stated that as long as Coinbase are compliant with any regulatory requirements applicable to them then banks have no business and no authority to interfere with my trade with Coinbase?
> 
> On what legal basis can a bank block trade between me and Coinbase? This is not China or NK. If there is no reasonable basis to suspect illicit activity then me and Coinbase and everyone else for that matter are free to engage in trade with one another.



No Big Short, that’s complete rubbish.

By the logic, banks couldn’t refuse to deal with a fruit merchant once he complied with any regulatory requirements applicable to fruit merchants.

On the basis that crypto is not regulated in the same manner as a bank but stores wealth, banks are free to eschew dealing with them.


----------



## tecate

Gordon Gekko said:


> Specific failures around due diligence are hardly the same as there being no due diligence


I do take your point albeit that the hypocrisy from the banks is breathtaking.  The scale of the HSBC Drugs money laundering scandal was unreal.  Who was jailed for that?



Gordon Gekko said:


> Cryptocurrencies are like the Wild West, and that’s what will be their undoing.


Of course it's the wild west.  They are not even fully formed yet - they're in an embryonic stage of development.  Regulation is on the way and we will see how things lie once that is implemented.



Gordon Gekko said:


> I have no doubt that within my lifetime “digital Dollars” might be the norm. But it won’t be Bitcoin.


It will be interesting - lets see how it plays out.  As outlined, implementing a centralised digital currency comes with major risk.  One hack and it's done for.



Gordon Gekko said:


> If a counterparty does not have equivalent standards, a bank are free to refuse to engage.


So they can do what they want - with your money effectively.  This is one of the factors that has driven interest in BTC/Crypto in the first instance.  As a case in point, I recently carried out an International Wire Transfer.  The receiving bank - turned the transaction around because I had used Transfermate to effect the transfer (in order to get a reasonable fx rate) - and charged me for the privilege, with notification many days later.  That didn't even involve cryptocurrency but the motivation behind it remains the same i.e. anti competitive practice.


----------



## TheBigShort

Gordon Gekko said:


> By the logic, banks couldn’t refuse to deal with a fruit merchant once he complied with any regulatory requirements applicable to fruit merchants.



You are absolutely spot on. If im a fruit merchant with a bank account opened through regulatory requirements of the bank and its own terms. Then that bank is required, through its banking license, to facilitate my financial transactions using my money.
As long as there is no reasonable basis to suspect any illicit activity then the bank is obliged to facilitate my financial transactions.
The notion that any bank can, at a whim, restrict financial transactions without any basis for doing so is the stuff of fascism.


----------



## jman0war

There is nothing ''natural" regarding an abstraction such as ''money". Retailers in RoI would accept British notes for convenience, and because they would basically get them at a discount : they would take a British 5 as the equivalent of an Irish 5.


----------



## jman0war

And by the way, I'm not referring to border towns. A friend was head barman of a well known pub in Galway in the 90's and they accepted British notes everyday during Race Week and the Arts Festival in particular.


----------



## Duke of Marmalade

jman0war said:


> And by the way, I'm not referring to border towns. A friend was head barman of a well known pub in Galway in the 90's and they accepted British notes everyday during Race Week and the Arts Festival in particular.


I lived in Belfast pre 1979.  The Irish currency with Lady Lavery and coins with various animals moved freely and interchangeably within the community, even on the Shankill Road though now and then you got a coin defaced with the letters UVF.  

In 1979 we broke with sterling and for a while the Irish punt was worth more than sterling and the currency still freely moved about.  Then the tide turned and sterling became the stronger.  I remember being amazed at the irony of being refused an Irish shilling with the little pig on it. I was told they don't accept Free State money any more, ironic as this was deep in republican West Belfast.


----------



## noproblem

I can assure you an awful lot of free state money was making its way northwards at that time with a zero refusal rate. Not all going into the republican areas either.


----------



## TheBigShort

Getting back to bitcoin, up 29% in the week. Four weeks after this topic was started, not the hallmark of a bubble bursting?


----------



## Duke of Marmalade

I must say that I was taken aback by the reaction to my comments about the Irish language, with some labeling me as worse than Trump in my attitude to minorities.

I was merely pointing out the parallels in that the enthusiasts greatly outnumber those that actually use it as it was intended and also the cult like nature of the following.  

For avoidance of doubt I can record that there is at least one  big difference between the two.  I am anti bitcoin.  I have nothing against the Irish language.


----------



## TheBigShort

Getting back to bitcoin, the Arizona senate has passed a bill that proposes to allow tax payments in bitcoin. 

Its not a done deal by any means and notwithstanding the clause that instructs any bitcoin to be cashed into $US within 24 hrs, it does give some indication of where the thinking is, in some quarters, on bitcoin. 

Notions of 'stepping on' bitcoin, criminalising it, 'crackdown', 90% tax etc, etc are difficult to envisage if there is a significant push to adopt bitcoin.


----------



## TheBigShort

https://www.investopedia.com/news/arizone-votes-accept-tax-payments-bitcoin/

_'Weninger indicates that the primary goal behind the bill is to support innovation in the state. The law should send “a signal to everyone in the United States and possibly through the world that Arizona is going to be the place to be for blockchain and digital currency technology in the future,” he told Fox News in an interview.'
_
Even if it transpires that bitcoin is not the digital currency of the future, it would appear that it is the gateway into this emerging technology. That in itself has value.


----------



## Duke of Marmalade

Back to that parallel.  There is a sizeable constituency who would like to see Irish supplant English as our main language.  Similarly there is band who would like to see bitcoin usurp the euro as our main currency.  In fact I suggest there is quite a Venn overlap between the two.  That to me is fanatical. 

I vehemently reject both aspirations.  The English language serves us very well as does the euro.  Also IMHO the fanatics are bound to be disappointed on both counts.


----------



## Brendan Burgess

Duke of Marmalade said:


> There is a sizeable constituency who would like to see Irish supplant English as our main language. Similarly there is band who would like to see bitcoin usurp the euro as our main currency. In fact I suggest there is quite a Venn overlap between the two.



I actually would like to see Irish supplant English in Ireland, but I don't expect it to happen.  And I am totally opposed to the waste of money on translating everything into Irish when Irish is not the main language.  I am not opposed to spending money supporting the language. 

Are you suggesting that there is a "fanatical" type who would be fanatical about the Irish language, Bitcoin, and other issues? 

I don't see any evidence at all that people who love Irish are any more or less likely to be Bitcoin faithful.  My gut feeling, based on the few Irish speakers I know,  is that people who love Irish tend to be less materialistic and therefore probably don't care about Bitcoin at all. 

It would be a very interesting piece of research to interview the Bitcoin fanatics and try to see if there is a typical profile. 

Brendan


----------



## Duke of Marmalade

Brendan Burgess said:


> I actually would like to see Irish supplant English in Ireland, but I don't expect it to happen.  And I am totally opposed to the waste of money on translating everything into Irish when Irish is not the main language.  I am not opposed to spending money supporting the language.
> 
> Are you suggesting that there is a "fanatical" type who would be fanatical about the Irish language, Bitcoin, and other issues?
> 
> I don't see any evidence at all that people who love Irish are any more or less likely to be Bitcoin faithful.  My gut feeling, based on the few Irish speakers I know,  is that people who love Irish tend to be less materialistic and therefore probably don't care about Bitcoin at all.
> 
> It would be a very interesting piece of research to interview the Bitcoin fanatics and try to see if there is a typical profile.
> 
> Brendan


I used the term Venn overlap.  For example in Norn Iron there is a big overlap between those who play the flute in Orange bands and the unionist community.  Doesn't mean all or even many unionists play the flute in Orange bands. 

Similarly the constituency in Ireland who would like to see Irish become the main language is even larger than I thought since it includes normally sensible folk like your good self.  I suspect that the great majority of these hardly spare bitcoin a thought, as you say. 

On the other hand if B/S is typical, it seems that those who want bitcoin to stick it to the establishment probably also want English to be put in its place.  However one sighting does not make a statistical proof.


----------



## RETIRED2017

Duke of Marmalade said:


> I used the term Venn overlap.  For example in Norn Iron there is a big overlap between those who play the flute in Orange bands and the unionist community.  Doesn't mean all or even many unionists play the flute in Orange bands.
> 
> They were well able to play the fiddle when it came to cash for ash, no problem wasting money then,



I am heading for the sun in the next few days I am flying from Belfast  staying over night  before I fly out I better keep my mouth shut
actually I am spending my bitcoin windfall flight paid in sterling,

According to some posters I will have to spend some time working on my English,


----------



## fpalb

Brendan Burgess said:


> I don't see any evidence at all that people who love Irish are any more or less likely to be Bitcoin faithful.  My gut feeling, based on the few Irish speakers I know,  is that people who love Irish tend to be less materialistic and therefore probably don't care about Bitcoin at all.


I can say for myself that Duke's assertion does not apply to me, but there are some interesting parallels between cryptocurrencies and languages in some ways, as both are examples of networks and will tend towards a long tail distribution. From a purely functional point of view, the optimal situation for the world would be to have a single global language, certainly for business purposes. I suppose you can consider that the additional languages add some cultural value, perhaps a song, poem, play or movie in French has some quality that it could not have in English, but beyond that and preserving history for sentimental reasons what do we gain by having more than one in comparison to the hassle, friction and expense that it creates?

Languages are also a roots movement. While the OED may be an authority that adds new words to the language, ultimately the origin of those words and the extent to which they become common in use is emergent behavior from the population. We have even have forks in language with English forking to US English.

I think languages, like cryptocurrencies, should be left to live or die by their merit. If Irish cannot survive without forcing people to learn it against their will or forcing the tax payer to subsidise its use then the language is more of a burden than a benefit to society.

I have no problem with people choosing to use Irish, no problem with the choice of schooling through Irish, but I would prefer that people were not _forced_ to learn Irish throughout their whole schooling and I would prefer that I am not forced to pay towards the effort of the government to artificially prop up the language.

I hope you can see that in this regard, the Irish language situation is completely at odds with the idea of cryptocurrency.

(I suspect I have set a site-wide record with amount of people that will take issue with this post)



Brendan Burgess said:


> It would be a very interesting piece of research to interview the Bitcoin fanatics and try to see if there is a typical profile.


There are definitely some stereotypes of bitcoiners, but not just one typical profile. For example the zerohedge extreme libertarian is one type and the silicon value tech nerd is another, but these two may have often have little in common with each other otherwise.


----------



## MrEarl

tecate said:


> ....This nonsensical suggestion that it's only relevant if an individual carrys out every transaction through BTC in 2018 doesn't hold water.  You know perfectly well that any such change would be gradual (even if I or anyone else here was suggesting that it's likely that every such transaction would be carried out in BTC - we're not.  BTC (or another crypto) can exist alongside FIAT).  Furthermore, I've given you other use cases for the use of bitcoin which you choose to ignore.



Very true,

Look at card payments for an example.  They have taken time to become a "normal" method of payment, may or may not be linked to your current account or a credit position, exist alongside FIAT etc.

Two important considerations here for me, whether we apply them to cards or cryptos:


Is there a benefit to the consumer by using them (cards or cryptos) ?
What's the impact on financial institutions, if either are used by consumers ?

.


----------



## tecate

Duke of Marmalade said:


> Similarly there is band who would like to see bitcoin usurp the euro as our main currency.  The English language serves us very well as does the euro.  Also IMHO the fanatics are bound to be disappointed on both counts.


You seem to be fixated on the idea that it's either FIAT or crypto - but never a combination of both.  That's a mistake.
However, as regards the Euro serving us well, have you been around the last few years?  How did it serve us (and Greece, Spain, Portugal, Cyprus, Italy, etc.) when we needed to devalue?  Furthermore, do you believe that the debasement of your wealth serves you well?  That the euro in your pocket right now is losing value.  That a shed load of euro have been printed off like magic beans.

If you are a migrant (in Ireland or elsewhere - and lets face it, there are 10's of millions of them) and you want to send money home, does the use of the euro (or other FIAT currency) through existing remittance services serve you well?
If you want to transfer a sum of money internationally (outside of europe), do International Wire Transfers serve you well?  ..where a perfectly good transfer can be turned around by the receiving bank, where ridiculous fees have been charged for years, where it takes an inordinate amount of time to effect the transfer, where there is no one unified system (each country seems to use different terminology).
If you are one of the 2 billion plus unbanked in the World, if crypto gives you the opportunity to address this in some way, how could this be anything other than a good thing?


This is not just about whether YOU can find a use case for bitcoin or not.  It goes beyond Ireland and the euro.  You were fixated before with this nonsense about only qualifying bitcoin use by users who used it instead of FIAT 100% of the time.  However, I'll indulge you with an example.  A friend of mine worked in Ukraine during the recent 'war'.  He got his pay converted to Bitcoin due to the instability of the Hryvnia - and did so despite BTC being banned in Ukraine during that time - the ban made no difference.


----------



## tecate

MrEarl said:


> Look at card payments for an example.  They have taken time to adopt, may or may not be linked to your current account or a credit position, exist alongside FIAT etc.


Paypal is another example.


----------



## MrEarl

tecate said:


> You seem to be fixated on the idea that it's either FIAT or crypto - but never a combination of both.  That's a mistake.....



I agree, perhaps an appropriate time to mention  Bankera .


----------



## tecate

MrEarl said:


> perhaps an appropriate time to mention  Bankera .


Bankera is a progressive idea for sure - and it's clear that those behind it are thinking in terms of a future where both FIAT & Crypto co-exist.  (As an investment, I was unable to figure out if it would make for a good investment or not....but then I'm hopeless at coming to a conclusion that I have confidence in with any ICO. It doesn't help that so many of them are vapourware).


----------



## MrEarl

Hi,

For me, what Bankera are planning makes perfect sense.  Offering a "one stop shop" is convenient for the consumer and most likely, also cost effective for them.

However, it's a very ambitious plan and will require regulatory buy in (perhaps the single biggest challenge for them !).   I can see it being a problem for the regulators, just like their legitimate concerns for wanting to see retail and investment banks kept separate etc.

I see Bankera as a highly speculative bet, but because it makes sense to me, I'm participating in the ICO, at a modest level.  The fact that there's already been over 88,000 contributors to the ICO, cannot be ignored.  Then again, neither can the size of the fund they are aiming to raise, and the likely substantial cash burn that come with a project like this.


----------



## Duke of Marmalade

_tecate _one of the questions that we never got properly answered was "how do you put a value on bitcoin?"  Why $10,000?  Why not $1?  Why not $1M?  _Fella _tells me the price is the price is the price which I didn't find particularly helpful.  The nearest I got to an answer was Investopedia which tried to relate the price of bitcoin to its ultimate adoption percentage of World monetary transactions.  To get a value near present levels its use as a day to day transactional currency would need to be enormous,  way beyond the narrow requirements like that of your Ukrainian friend.

I remember once the Earl of Marmalade was doing some medical thing in Cameroon and he ran out of Cameroon Francs.  The Duke had to wire him about €400 worth through Western Union.  I think the charge was €20.  I was reasonably impressed with the service and the costs.  But of course on the face of it bitcoin has the potential to transform this narrow market but it will rely on people believing the fiction that the entry on the blockchain is worth something.  I could have texted the Earl saying I the Duke owe you €400.  He could then possibly have tried to use this text to get credit in the local Cameroon hostelry, but I doubt it would have worked.  But in the end of the day my text is actually worth more than an entry on a blockchain.  Satoshi herself was well aware of this fatal flaw - how do you give the entry value? Unless of course the blockchain gets backing from a trusted source but then that defeats the whole purpose of the cult (hope I got that right).

As to Greece et al and the euro can you even stop to imagine what havoc the hugely deflationary bitcoin would have wrought.


----------



## tecate

Duke of Marmalade said:


> _tecate _one of the questions that we never got properly answered was "how do you put a value on bitcoin?"  Why $10,000?  Why not $1?  Why not $1M?  _Fella _tells me the price is the price is the price which I didn't find particularly helpful.  The nearest I got to an answer was Investopedia which tried to relate the price of bitcoin to its ultimate adoption percentage of World monetary transactions.  To get a value near present levels its use as a day to day transactional currency would need to be enormous


You seem to be switching back to a different aspect of crypto than what we were discussing but no matter. As you well know - and it has been discussed ad nauseam (and continues to be discussed) - it remains to be seen where Bitcoin (as well as other crypto's) pricing will end up. We are going through a period of price discovery for a technology that is still being developed and where there is no precedent for pricing of same.  Once again, you don't seem to be taking into consideration that you are making judgements on a technology that is as yet not fully developed/matured.  I have an open mind (and I'm open to the possibility that Brendan may be right on the money) as regards where that pricing will end up - that's the answer to your question.  Nobody will be able to provide you with an answer on this that you will be satisfied with (aside from the one you wish to believe)....you'll just have to wait and see how it all pans out.



Duke of Marmalade said:


> _..._way beyond the narrow requirements like that of your Ukrainian friend.


Eh, my 'Ukrainian friend' was one of 45 million in the same position.  Not saying that they all took that option, of course at this early stage they didn't  but they would have all had the same requirements...I'd hardly call 45 million 'narrow'.  And then of course, there's Zimbabwe, Venezuela, Suriname and Argentina - accounting for another 92 million people. Hardly 'narrow' requirements.



Duke of Marmalade said:


> I remember once the Earl of Marmalade was doing some medical thing in Cameroon and he ran out of Cameroon Francs.  The Duke had to wire him about €400 worth through Western Union.  I think the charge was €20.  I was reasonably impressed with the service and the costs.


Yeah, I don't think that you were accounting for money made on fx by WU ;-) .  The example you gave accounts for 5% - add to that the 4% in FX fees.  Furthermore, the example I gave - immigrants sending money back home would involve bigger transfers (or repeat transfers amounting to a greater capital sum) ..WU fees start to mount with that.  230 million people send $500 billion in remittances each year.



Duke of Marmalade said:


> But of course on the face of it bitcoin has the potential to transform this *narrow* market but it will rely on people believing the fiction that the entry on the blockchain is worth something.


You really think $500 billion constitutes a 'narrow market'...interesting.  As regards *your fiction* ref. the validity of the blockchain and of cryptocurrency, we've been over that - I'll leave that to fester with yourself as I have no time for it.



Duke of Marmalade said:


> I could have texted the Earl saying I the Duke owe you €400. He could then possibly have tried to use this text to get credit in the local Cameroon hostelry, but I doubt it would have worked.


You're spouting nonsense yet again.  I already gave you the working example the other day but you choose to filter out anything that doesn't support your narrative.
The Philippines is one of the most significant countries in terms of inward remittances - given the migrational nature of it's population, with some 2 million of them working overseas.  Rebit.ph is a bitcoin remittance startup that provides exactly this service.  They currently employ 50 people....so you need not worry about it not working - it works - proven beyond doubt.



Duke of Marmalade said:


> Satoshi herself was well aware of this fatal flaw - how do you give the entry value? Unless of course the blockchain gets backing from a trusted source but then that defeats the whole purpose.


Well you've made a big fat claim here so back it up.  Where in the white paper does Satoshi point to the crypto he/she designed having a 'fatal' flaw in terms of maintaining a value?




Duke of Marmalade said:


> As to Greece et al and the euro can you even stop to imagine what havoc the hugely deflationary bitcoin would have wrought.


A couple of things;
- You continue to view this as an all or nothing game.  It's not.  Cryptocurrency will exist alongside FIAT currency.
- There's no form of acceptance that the Euro project is flawed.  It was  and is in Ireland's case and it most certainly was in Greece's.  I'm not saying that we bail out of it - it's such a mess that it's probably best to leave things be.  However, if you were voting for Euro adoption tomorrow, would you vote for it?....because I wouldn't.
- Who pays the price for FIAT based monetary policy in situations like what Greece and Ireland found themselves in?  Those policies (Q.E. etc.) don't come without a cost.
- Did Greece benefit from cheap German Euro being thrown at it?  Did Ireland?
- In 2008/9, when things were rosy in Germany and in the crapper in Ireland, did the ECB account for Ireland (and the rest of the PIGS) or Germany in the policy decisions it made back then?


----------



## TheBigShort

Whats obvious since the economic crisis (for those who were aware of it) is that my currency, the euro, operates in a monopolistic manner and is in the control of a select group of people who have determined that they know how to manage the currency.
They are charged with controling inflation by setting interest rates. They have instead since embarked on a program to control interest rates by setting inflation. The policies have failed, the currency has failed, but hey! Its all good! 

Now along comes a concept with the ridiculous notion of developing a _trustless peer to peer _transacting mechanism and instead of perhaps exploring the possibilities of the system and what it all could mean, some have dismissed it out of hand. Fair enough, thats their perogative.
Im dont proclaim to understand everything that is emerging at this time, but it is clear to me that fundamental change in the way we transact with each other is occuring. If others cannot see that now, they will in time.


----------



## Negotiator

TheBigShort said:


> Whats obvious since the economic crisis (for those who were aware of it) is that my currency, the euro, operates in a monopolistic manner and is in the control of a select group of people who have determined that they know how to manage the currency.
> They are charged with controling inflation by setting interest rates. They have instead since embarked on a program to control interest rates by setting inflation. The policies have failed, the currency has failed, but hey! Its all good!
> 
> Now along comes a concept with the ridiculous notion of developing a _trustless peer to peer _transacting mechanism and instead of perhaps exploring the possibilities of the system and what it all could mean, some have dismissed it out of hand. Fair enough, thats their perogative.
> Im dont proclaim to understand everything that is emerging at this time, but it is clear to me that fundamental change in the way we transact with each other is occuring. If others cannot see that now, they will in time.



Well said TBS, I totally agree with your comments. I just made a detailed post on one of the other forum topics specifically mentioning the frustration I have with people just 'dismissing' BTC/Blockchain/Cryptos entirely without even mentioning the technology behind them and how it's a disruptive new industry that is being born!


----------



## Duke of Marmalade

tecate said:


> Well you've made a big fat claim here so back it up.  Where in the white paper does Satoshi point to the crypto he/she designed having a 'fatal' flaw in terms of maintaining a value?





			
				Satoshi said:
			
		

> As a thought experiment, imagine there was a base metal as scarce as gold but with the following properties: - boring grey in colour - not a good conductor of electricity - not particularly strong, but not ductile or easily malleable either - not useful for any practical or ornamental purpose and one special, magical property: - can be transported over a communications channel *If it somehow acquired any value at all for whatever reason,* then anyone wanting to transfer wealth over a long distance could buy some, transmit it, and have the recipient sell it. *Maybe it could get an initial value circularly as you've suggested, by people foreseeing its potential usefulness for exchange.* (I would definitely want some) Maybe collectors, any random reason could spark it. I think the traditional qualifications for money were written with the assumption that there are so many competing objects in the world that are scarce, an object with the automatic bootstrap of intrinsic value will surely win out over those without intrinsic value. But if there were nothing in the world with intrinsic value that could be used as money, only scarce but no intrinsic value, I think people would still take up something. (I'm using the word scarce here to only mean limited potential supply)


  I find the bits in bold very telling.  Spot the desperation, the frustration - if only it had any value at all for whatever reason.  She knows that from Mises theorem it has to have some intrinsic value.  But she is not going to throw it all away having so nearly come up with a perfect solution.  So, but you can spot the skepticism, she accepts her friend's circular argument that if people see its usefulness for exchange it would get a value. I suggest that as a further thought experiment imagine that bitcoin actually had intrinsic value.  Then its price would never vary from its intrinsic value.  Its precisely because it has no intrinsic value that its price is all over the place - nobody has any rational reason for giving it a price.

I accept the case you make that there is a substantial demand for what bitcoin claims to deliver.  But in the end of the day it delivers nothing but a Permanent, immutable, Transparent, Borderless, Neutral, Programmable, entry on a blockchain and as Satoshi worried - where is the value in that?


----------



## ant dee

Duke of Marmalade said:


> But in the end of the day it delivers nothing but a verifiable entry on a blockchain


But it is much more than that!
Permanent, immutable.
Transparent.
Borderless.
Neutral.
Programmable.

Bitcoin delivers all that and more.

It is not cheap yet, neither really fast. But its a work in progress.
Maybe the current price levels have factored in the chances of it being really fast and really cheap in the medium term, opening up many use-cases.


----------



## TheBigShort

Duke of Marmalade said:


> desperation



No.



Duke of Marmalade said:


> frustration



Yes.

And it's from frustration that ideas for solutions for great ideas are generated. Those are coming thick and fast, it's possible it still all falls flat on its face, or it's possible that solutions to the problems are found.
Even the notion of all this energy and all these ideas being directed into the crypto space has value by itself. As has been outlined to you on multiple occasions, Bitcoin is not the finished product. But then again neither is Bransons four hour flight from New York to Sydney, neither is Tesla's driverless car, nor is Mars One colony to planet Mars.
But for some reason, people see value in these concepts. I get Bransons and Tesla's idea, but there is no certainty either will come to fruition or have commercial viability.
I don't get Mars One at all, for all sorts of reasons, still doesn't stop people investing and placing value on it.

Your perspective is too narrow in my opinion. You have seen a concept and you want a book value on it, because, well, you know no other way to value to it.

We could put AAM up for discussion and ask to price the value of it? My guess is you and Brendan and Gekko would price it higher than the price I would value for it?
Perhaps, as a side, one of you could tell us the value of AAM and show how you calculated it that.
Then, put it to the market at auction, see how the market price, and the book price fare?



Duke of Marmalade said:


> throw it all away having so nearly come up with a perfect solution



Are these your words or Satoshi's? Because if they are yours, then perhaps you can figure out the time, energy and investment that is now in the crypto space?


----------



## Duke of Marmalade

TheBigShort said:


> Are these your words or Satoshi's? Because if they are yours, then perhaps you can figure out the time, energy and investment that is now in the crypto space?


Satoshi clearly  didn't believe in her currency.  I trust her.


----------



## TheBigShort

Duke of Marmalade said:


> Satoshi clearly  didn't believe in her currency.  I trust her.



Well in fairness to you, you have at least spent time to consider the subject, read some detail, evaluated it in your own way, and come to your conclusion. There is logic to that, that is to be respected.


----------



## tecate

Duke of Marmalade said:


> I find the bits in bold very telling.  Spot the desperation, the frustration - if only it had any value at all for whatever reason.


Are we applying* bold* in an attempt to accentuate your own narrative perhaps?  As regards the desperation and frustration, that's not my reading of it.  In fact, without flat out asking Satoshi, nobody can interpret that.  Are you a professional mind reader?


Duke of Marmalade said:


> She knows that from Mises theorem it has to have some intrinsic value.


I'd suggest you read it again.  You are reading what you want to see - not what is actually there.  Yes, Satoshi ruminates over intrinsic value.  However, what you're not honest about is that Satoshi also ruminates over the fact that people could affix a value to it.  Maybe you should consider the fallacy of intrinsic value also - just to be thorough. By the way, that concept (of intrinsic value) does NOT include paper money.  Contrary to what you've stated previously, paper money is backed by jack.  If it is not so, why then is it that every year  (or couple of years), we have a FIAT currency that unravels?  If it had intrinsic value, then that couldn't possibly happen.



Duke of Marmalade said:


> But she is not going to throw it all away having so nearly come up with a perfect solution.


That your Dukeness is once again a complete fiction.  You are reading into something you couldn't possibly be able to determine - again to suit your world view.



Duke of Marmalade said:


> So, *but you can spot the skepticism*, she accepts her friend's circular argument that if people see its usefulness for exchange it would get a value.


Again, your Dukeness - I can't spot any 'skepticism'.  All I see is an open discussion.  The idea that Satoshi is skeptical you have introduced yourself (as always, to support your narrative).  Openminded and inclusive of all factors, yes.  There is no information contained in that text which indicates that Satoshi is skeptical.



Duke of Marmalade said:


> I suggest that as a further thought experiment imagine that bitcoin actually had intrinsic value. Then its price would never vary from its intrinsic value. Its precisely because it has no intrinsic value that its price is all over the place - nobody has any rational reason for giving it a price.


Satoshi indicates that it would be much easier for BTC to be adopted if it had a more compelling intrinsic value.  That's the 'automatic bootstrap' alluded to.  However, the rumination continues that Satoshi sees that whilst it's more difficult, if it sits alongside something that doesn't have intrinsic value, then it stands a chance at adoption.
As regards its price being all over the place, this circumstance has not happened in human history.  We are going through a phase of price discovery.  I always tell you - and I'll keep telling you as it's fundamentally important and perhaps one day it will sink in - that you are disparaging in your assessment of Bitcoin as you will only consider it's status right now.  You will not accept that it is in a state of ongoing development, you will not accept that the infrastructure surrounding it continues to be built out.  Furthermore, you will not accept that the network effects have not been fully felt yet.
With that, bitcoin has been more volatile in the past than it is today.  The affixing of value and trading of same is a cornerstone of civilisation and goes back to the very beginning of civilisation.  If you take a breath and back up for a minute, perhaps you might see the bigger picture.  Bitcoin (and crypto generally) is young, embryonic and as yet, not fully matured.  With time, price discovery will settle and the volatility will dissipate.



Duke of Marmalade said:


> I accept the case you make that there is a substantial demand for what bitcoin claims to deliver. But in the end of the day it delivers nothing but a Permanent, immutable, Transparent, Borderless, Neutral, Programmable, entry on a blockchain and as Satoshi worried - where is the value in that?


You were going so well with that statement until you prejudiced it with a falsehood right at the end.  Satoshi didn't 'worry'...Satoshi ruminated over intrinsic value and came to the conclusion that with limited supply, bitcoin stands a chance of adoption when stood next to paper money which has no intrinsic value itself - only sentiment.  You can't say for a second that Satoshi 'worried' - where does the word 'worry' appear in the text?  I've said Satoshi 'ruminated' as it's as clear as day that this was a thought provoking discussion that was underway.


----------



## Duke of Marmalade

tecate said:


> Are we applying* bold* in an attempt to accentuate your own narrative perhaps?


Don't be silly.  I am using bold to draw attention to the bits I was going to address, a standard approach used by yourself.


tecate said:


> Again, your Dukeness - I can't spot any 'skepticism'.  All I see is an open discussion.  The idea that Satoshi is skeptical you have introduced yourself (as always, to support your narrative).  Openminded and inclusive of all factors, yes.  There is no information contained in that text which indicates that Satoshi is skeptical.





			
				Wiki said:
			
		

> *Circular reasoning* (Latin: _*circulus in probando*_, "circle in proving";[1] also known as *circular logic*) is a logical fallacy in which the reasoner begins with what they are trying to end with.


Certainly if someone accused me of making a circular argument I would take it as a put down.  Satoshi resigns herself to accepting that the only way to achieve that Holy Grail of "value" is to use a circular argument.  (BTW the bold was in the original Wiki and was not inserted to promote my Worldview.)


----------



## tecate

Duke of Marmalade said:


> Certainly if someone accused me of making a circular argument I would take it as a put down.  Satoshi resigns herself to accepting that the only hay to achieve that Holy Grail of "value" is to use a circular argument.


I disagree with your rationale and I disagree with the notion that Satoshi has engaged in Circular Reasoning.  The exchange occurred on bitcointalk - a discussion board not dissimilar in structure to this one.  It was an open, public discussion. "Worries", "resigns", "scepticism", admission of btc having a 'fatal flaw', "circular reasoning" - these are all items that you have decided to interpret.  There is no bona fide evidence that this is Satoshi's thinking.



Duke of Marmalade said:


> (BTW the bold was in the original Wiki and was not inserted to promote my Worldview.)


That may be from whereever you sourced it.  However, in the original posting on bitcointalk it is NOT bolded.


----------



## Duke of Marmalade

tecate said:


> I disagree with your rationale and I disagree with the notion that Satoshi has engaged in Circular Reasoning.  The exchange occurred on bitcointalk - a discussion board not dissimilar in structure to this one.  It was an open, public discussion. "Worries", "resigns", "scepticism", admission of btc having a 'fatal flaw', "circular reasoning" - these are all items that you have decided to interpret.  There is no bona fide evidence that this is Satoshi's thinking.


Ok let's agree to disagree on our read of the Japanese mind.


----------



## Brendan Burgess

tecate said:


> We are going through a period of price discovery for a technology that is still being developed and where there is no precedent for pricing of same. Once again, you don't seem to be taking into consideration that you are making judgements on a technology that is as yet not fully developed/matured. I have an open mind (and I'm open to the possibility that Brendan may be right on the money) as regards where that pricing will end up - that's the answer to your question. Nobody will be able to provide you with an answer on this that you will be satisfied with (aside from the one you wish to believe)....you'll just have to wait and see how it all pans out.



I don't get this at all and I am struggling to find a comparison.

Maybe the blockchain technology? Let's say someone had the patent for this. They could charge users a fee for using it.  No one could use it without paying a fee.  I might argue "this will never amount to much" and your better technological insight might argue "this is as important as the internet and it will have huge revenues and profits in years to come."  I would conclude that it was not worth very much - but you conclude that it's worth owning a part of this company and you pay $10,000 a share. You might be right and I might be wrong. 

I can't do that with Bitcoin. There is no income stream - there is not even a potential income stream. The only reason you are willing to pay $11,000 for it is because you think that someone else will pay more for it in the future.

At least with tulips, you could plant the tulip and maybe produce more tulips from the one bulb and sell them on to people who love the crazy pattern. 

But with Bitcoin, there is nothing at all. Which is why it's got no financial value at all. 


Brendan


----------



## jman0war

Isn't that the same with Gold?
It has limited real world uses and none of those use cases couldn't be supplanted by another material.
Owning gold generates no income stream.


----------



## noproblem

jman0war said:


> Isn't that the same with Gold?
> It has limited real world uses and none of those use cases couldn't be supplanted by another material.
> Owning gold generates no income stream.



You can buy it and sell it, jewelers manufacture products with it and sell them on, medical co's use gold in production of goods and sell them. These are only a few of the uses of gold that produce an income stream. So, you're wrong in saying gold doesn't generate an income. Oh, don't ever forget, women love it and don't ever forget that coz if you do your income stream could diminish very quickly.


----------



## Negotiator

noproblem said:


> You can buy it and sell it, jewelers manufacture products with it and sell them on, medical co's use gold in production of goods and sell them. These are only a few of the uses of gold that produce an income stream. So, you're wrong in saying gold doesn't generate an income.



The uses that you refer to accounts for about 12% of gold production.....not exactly what I would call income producing!

What about a piece of canvas that sits on a wall that cost $5m (or $140m in my recent example).......does that throw off any profits?


----------



## jman0war

noproblem said:


> You can buy it and sell it, jewelers manufacture products with it and sell them on, medical co's use gold in production of goods and sell them. These are only a few of the uses of gold that produce an income stream. So, you're wrong in saying gold doesn't generate an income.


The use cases of gold are not particularly unique to it's metallurgy and they certainly do not support the high price gold trades at.


----------



## noproblem

jman0war said:


> The use cases of gold are not particularly unique to it's metallurgy and they certainly do not support the high price gold trades at.



Give an ingot of it to some friends and see will they agree. You'll become very popular and the presents metallurgy won't be of any concern to them.


----------



## noproblem

Negotiator said:


> The uses that you refer to accounts for about 12% of gold production.....not exactly what I would call income producing!
> 
> What about a piece of canvas that sits on a wall that cost $5m (or $140m in my recent example).......does that throw off any profits?



Yes, i'd like to have it. Wouldn't you?


----------



## jman0war

noproblem said:


> Give an ingot of it to some friends and see will they agree. You'll become very popular and the presents metallurgy won't be of any concern to them.


Give them a bitcoin and they will also agree and you'll be popular.


----------



## noproblem

By all means, but most people would look in


----------



## jman0war

noproblem, its as though you are rationalizing the high price of Gold, because people are prepared to pay that much for it.
Which is essentially the same thing Brendan says about the bitcoin price, although he makes the argument that this makes bitcoin have no financial value.


----------



## Brendan Burgess

Negotiator said:


> What about a piece of canvas that sits on a wall that cost $5m (or $140m in my recent example).......does that throw off any profits?



This has been dealt with in other threads. 

Buyers of art get enjoyment/challenge/status from owning it.  In some cases, galleries buy them to attract money spending visitors. 

You might consider a Basquiat to be worthless and I would agree with you.  But there are enough people and institutions who see something in it that we don't. 

Bitcoin offers none of these.  Just as my shares in Ryanair offers me no enjoyment other than a stream of earnings.  

Brendan


----------



## jman0war

Brendan Burgess said:


> This has been dealt with in other threads.
> Buyers of art get enjoyment/challenge/status from owning it.  In some cases, galleries buy them to attract money spending visitors.


That's not true Brendan.
People enjoy holding bitcoin as it's limited in supply.
It's owning a piece of a very interesting open source project that is disrupting traditional banking and government regulation.

Just wait until the next economic cyclic crash and we'll probably see another, larger mass migration into the crypto space.


----------



## joe sod

jman0war said:


> The use cases of gold are not particularly unique to it's metallurgy and they certainly do not support the high price gold trades at.


 
when they came up with bitcoin they went out of their way to link it with gold, the PR for bitcoin is basically a solid gold coin, they didn't use a US dollar or euro but a gold coin. So obviously the inventor of bitcoin saw something very valuable in the image of gold.


----------



## jman0war

joe sod said:


> when they came up with bitcoin they went out of their way to link it with gold, the PR for bitcoin is basically a solid gold coin, they didn't use a US dollar or euro but a gold coin. So obviously the inventor of bitcoin saw something very valuable in the image of gold.


Yes you are right about gold.
Many bitcoiners are also into gold.

They just see that bitcoin is better than gold.

Infact, here is the blog of the person that I personally believe is the most likely one to be Satoshi Nakamoto.
http://unenumerated.blogspot.com/
He writes a lot about gold and money in the historical context.


----------



## TheBigShort

Brendan Burgess said:


> You might consider a Basquiat to be worthless and I would agree with you. _But there are enough people and institutions who see something in it that we don't_.



And that basically sums it up with Bitcoin. There are enough people who see something in it that you don't. 

For me, I see it as an opportunity to store money outside of the monetary system. Private money if you will. Now that cash is in decline and online transactions are increasing (in Sweden 'no cash signs' are emerging) then all of my money is under the control of central authorities. 
This would be fine if you could 100% trust these authorities, but considering the bank bailouts, pension raids, money printing, economic policies, continuing fraud and manipulation, having an option outside the monetary system to store _some _money is a great idea. 

The Bitcoin blockchain has at max, space for 21m full units. To buy a full unit today it will cost near $11,000. That is because more and more people are availing of the option to store money outside the system. For sure, it is volatile and risky, but all that does is limit the amount you are willing to purchase. In fact, the volatility can act as a deterrent to spending sums that you are not prepared to lose, or will adversely impact your standard of living if price crashes.

If economies prosper, productivity increases, wealth is distributed and trust returns to the banking economy, Bitcoin price will crash.

But as long as mistrust prevails, phoney QE programs are applied, pension raids occurring, bank charges, bank manipulation, bailouts, write downs for developers but not mortgage holders, write downs for vulture funds but not home owners, bogus selling practices, money laundering, criminal activity, outlandish bonuses, little to zero accountability,  etc...etc..
As long as US and major economies of the world continue to drive up debt and devalue their currencies then the option for the ordinary joe to put money outside that system will prevail.

It's a brilliant idea, not without its flaws, problems and risks. But clearly people see something in it that you don't and in turn place value on it.


----------



## Negotiator

Brendan Burgess said:


> This has been dealt with in other threads.
> 
> Buyers of art get enjoyment/challenge/status from owning it.  In some cases, galleries buy them to attract money spending visitors.
> 
> You might consider a Basquiat to be worthless and I would agree with you.  But there are enough people and institutions who see something in it that we don't.
> 
> Bitcoin offers none of these.  Just as my shares in Ryanair offers me no enjoyment other than a stream of earnings.
> 
> Brendan



I'm sure every BTC holders gets great enjoyment/status/challenge our of holding their crypto just the same as art.......granted the price is higher than what they bought it at! haha 

I get your point about money spending visitors but that's gotta be just a fraction of all art collections in circulation. I no longer hold any Ryanair shares but I used to get great satisfaction out of holding them when I took my seat and saw a full plane.....you should book more Ryanair flights Brendan, you'll be a much happier shareholder for it!


----------



## TheBigShort

Negotiator said:


> I'm sure every BTC holders gets great enjoyment/status/challenge our of holding their crypto just the same as art...



Its a good point. People value things in so many different ways. Limiting 'value' to some book accounting exercise is flawed. 
An art painting costing $450m is not the result of any business plan, calculated returns on rent or anything like that. It is in part of admiration of the piece of work and its historical significance. It is, in part to somebody having more money than they know or care what to do with it. We can know this because its price went from $200m to $450m in the space of 20mins. 
My guess is that the art market is in a bubble, that it will burst at some point, and that price tags being bandied about for vintage Ferraris and Da Vincis are based on alot of hot air.
That said, they are worth something, no doubt. But I suspect the purchasers are speculating that someone else will pay more at a later point, or they are simply storing their wealth outside the monetary system.


----------



## jman0war

I had started collecting some vintage bicycles a few years ago, with the plan on restoring them to sell them on.
I didn't get around to restoring most of them in fairness, but sold each bike, one at a time.

In each case i was able to sell the bike for more money than i acquired it for.
I originally presumed i would have to commit labour, time and money on restoration; but i didn't, and it worked out nonetheless.

Does this mean i operated a ponzi?


----------



## Brendan Burgess

jman0war said:


> Does this mean i operated a ponzi?



No, it just means that you don't know what a ponzi scheme is.

Brendan


----------



## Brendan Burgess

jman0war said:


> People enjoy holding bitcoin as it's limited in supply.



The only reason you are holding it is because you expect it to rise in value.  

I have bought art for enjoyment and I know full well when I buy it that if I ever want to sell it, I am very unlikely to get my money back.

People buy paintings primarily for their aesthetic value. With the Basquiats, it more complicated than that. 

Each Basquiat is different. Each of the millions of Bitcoins is the exact same.  And they are not much different in aesthetic value from any of the pretenders. 

Very few prints with large editions make high prices. 

Brendan


----------



## jman0war

Brendan Burgess said:


> The only reason you are holding it is because you expect it to rise in value
> Brendan


I think that bitcoin will remain bitcoin, while that monopoly money called FIAT will be mis-managed as usual so will end up deflating in value.
In that context, yes bitcoin goes up, but not for anything that bitcoin has done.


----------



## Duke of Marmalade

jman0war said:


> I think that bitcoin will remain bitcoin, while that monopoly money called FIAT will be mis-managed as usual so will end up deflating in value.
> In that context, yes bitcoin goes up, but not for anything that bitcoin has done.


Deflation in value is of course the opposite of inflation and I don't quite see why bitcoin should go up in that scenario.


----------



## jman0war

Duke of Marmalade said:


> Deflation in value is of course the opposite of inflation and I don't quite see why bitcoin should go up in that scenario.


As people lose confidence in FIAT money retaining value, they'll want to buy bitcoin.
But bitcoin has a limited supply so that new demand will push the price higher.

This will be exacerbated by central banks printing more money, that currency inflation decreases it's value in relation to anything else.


----------



## Duke of Marmalade

jman0war said:


> As people lose confidence in FIAT money retaining value, they'll want to buy bitcoin.
> But bitcoin has a limited supply so that new demand will push the price higher.
> 
> This will be exacerbated by central banks printing more money, that currency inflation decreases it's value in relation to anything else.


Well yeah, I can see inflation being bad for fiat versus crypto but deflation as well?


----------



## jman0war

I didn't say deflation as in:  less money in circulation.

I said it _deflates in value in relation to anything else._
Spot the difference


----------



## Duke of Marmalade

jman0war said:


> I didn't say deflation as in:  less money in circulation.
> 
> I said it _deflates in value in relation to anything else._
> Spot the difference


Ahh!  You probably meant declines.


----------



## tecate

Brendan Burgess said:


> I don't get this at all and I am struggling to find a comparison.


I'm not sure what you're not getting in relation to the piece that I'd written - which you quoted?

I haven't agreed that it's a certainty but I've stated that it's quite possible that BTC could go down to a very low level (zero means it's completely failed...not sure If I'd go that far...I guess just above the level of mining costs is what I'm thinking in a worst case scenario when considering the pricing aspect of it only).



Brendan Burgess said:


> Maybe the blockchain technology?


Blockchain on it's own is useless without there being 'tokens' on the chain.  It won't function otherwise and as for centralised blockchain, I think that's completely pointless.



Brendan Burgess said:


> I might argue "this will never amount to much" and your better technological insight might argue "this is as important as the internet and it will have huge revenues and profits in years to come."


I'm sure I did make reference on AAM previously to it being the internet of money.  However, I'm thinking in terms of not just BTC in that respect.  There are a whole host of services which could emerge as a consequence. BTC will not be the be all and end all for all such cases (in fact, it remains to be seen if BTC will succeed completely at all...it could be another crypto).



Brendan Burgess said:


> I would conclude that it was not worth very much - but you conclude that it's worth owning a part of this company and you pay $10,000 a share. You might be right and I might be wrong.


Well, I guess I must not value it right now at 10k/coin as I have not taken the bait and bought back in.  The Tether issue has me spooked - and I'd like to see that thrashed out and brought to a conclusion one way or the other.  The problem is - I don't see how that can be done with them being registered in the BVI.



Brendan Burgess said:


> I can't do that with Bitcoin. There is no income stream - there is not even a potential income stream. The only reason you are willing to pay $11,000 for it is because you think that someone else will pay more for it in the future.


Is there no conceivable possibility that the strength of market sentiment will be maintained?  However, the discussion I've been having with the Duke is about the BTC project overall.  I thought you had pointed out yourself that there could well be value in BTC as a technology - just not at the price it's at.  Lets say for example that BTC was $10/coin for arguments sake.  Is there no way in your mind that it could function as a currency in specific circumstances (alongside FIAT ...and not replacing FIAT)?

I've already given a few use cases.  


In summary, there are two aspects;
1. The ongoing speculation ref. the price of BTC. Perhaps it will be maintained and perhaps it will slump permanently.  The technology will still exist.  However, it seems that one of the key proponents of Bitcoin Core - the Blockstream team - have been pushing it as a store of value more so than a transactional currency.
2. The actual nuts and bolts of it as a technology were what it all started with before there was any pricing speculation.  That's the core of it.  It was intended for use as a transactional currency.  However, it's slipped insofar as it's hit a scaling issue.  Lightning Network is on the way - and so, it's hoped that it will once again be a functional transactional currency.


----------



## Brendan Burgess

tecate said:


> Lets say for example that BTC was $10/coin for arguments sake. Is there no way in your mind that it could function as a currency in specific circumstances



Possibly. I don't think it's worth $10 a coin, but it could have a token value like that.  

I don't really get the point though.  If someone is paying $11,000 today, there is no difference between a fall to zero and to $10.  

My understanding of it is that the cost of transactions is very high, so if the price falls to $10 a coin, then it won't be worth transacting at that price. 

Brendan


----------



## tecate

Brendan Burgess said:


> Possibly. I don't think it's worth $10 a coin, but it could have a token value like that.


Well, I brought it down to near your valuation to take the pricing aspect of it out of the picture.  You had said previously that you could see a logic in it without the mad valuation....OR....are you taking the banking line?  i.e. Bitcoin = Bad, Blockchain = Good?
Because if that's the case, I don't agree in any way, shape or form.

The banks are going with this nonsense having initially dismissed it totally.  A blockchain that is centralised and doesn't have any tokens running on it - is just a glorified database without all of the advantages that the bitcoin blockchain brings with it.  It has the potential to cut into some of their revenue streams - it's why they're taking this position.  Also, we discussed recently the matter of banks cutting off customers ability to purchase BTC via Credit Card.  A couple of banks are now taking that a step further - and applied it to debit card.  I don't personally agree with people being wreckless (buying via Credit Card) - but then not all of them were...many used this method as they saw an opportunity and it was/is the only way to react quickly in buying BTC...a SEPA transfer may take too long, a wire transfer will take longer still).  However, preventing people to spend their own money on crypto is fundamentally wrong on every level.  It proves the point I made back then.  Even with Credit Cards, this notion that they were protecting customers was absolute nonsense.  If that was the case, you couldn't buy any sports betting product with credit card.  What really caps it off and proves it beyond doubt are the examples where they're banning Debit Card purchases.
It's exactly nonsense like this that led me to Bitcoin in the first place.  Who the hell are they to dictate how anybody spends their money.



Brendan Burgess said:


> I don't really get the point though.  If someone is paying $11,000 today, there is no difference between a fall to zero and to $10.


There is.  I've left the door open on the BTC pricing debate.  I accept that there is a possibility that the BTC price could plummet and stay down there.  I don't think it will go to zero - or if it does, the project has failed.  Equally, it could retain it's existing valuation or it could go higher.
I'm not going to argue with anyone on price other than to say that ultimately, BTC will find it's price - and I believe that will be greater than zero.  On that basis - with the price speculation dealt with - BTC can still function as a transactional currency - and particularly with regard to the specific use cases I mentioned.



Brendan Burgess said:


> My understanding of it is that the cost of transactions is very high, so if the price falls to $10 a coin, then it won't be worth transacting at that price.


Transaction costs and times have only become an issue recently due to a scaling issue.  Segwit was implemented and people were disappointed with the outcome.  However, people need to understand that Segwit implementation is only at 14%.  Once it's fully implemented, the benefits will be seen.  In tandem with that, Lightning Network will be introduced in 2018.  This will make real time transactions possible at negligible tx cost.....ergo...BTC will be back in the game as a transactional currency.
Layer 2 solutions will also take the pressure off the mean average cost in terms of mining and energy consumption.


----------



## jman0war

Brendan Burgess said:


> My understanding of it is that the cost of transactions is very high, so if the price falls to $10 a coin, then it won't be worth transacting at that price.
> Brendan


No this is stale information.
SegWit adoption continues and this is lowering transaction fees.


To get your transaction into the next block, fee right now is $3

*Next Block Fee:* fee to have your transaction mined on the next block (10 minutes). $3.13
*3 Blocks Fee:* fee to have your transaction mined within three blocks (30 minutes). $2.84
*6 Blocks Fee:* fee to have your transaction mined within six blocks (1 hour). $0.28
https://bitcoinfees.info/


----------



## tecate

jman0war said:


> No this is stale information.
> SegWit adoption continues and this is lowering transaction fees.
> 
> 
> To get your transaction into the next block, fee right now is $3
> 
> *Next Block Fee:* fee to have your transaction mined on the next block (10 minutes). $3.13
> *3 Blocks Fee:* fee to have your transaction mined within three blocks (30 minutes). $2.84
> *6 Blocks Fee:* fee to have your transaction mined within six blocks (1 hour). $0.28
> https://bitcoinfees.info/


That's at 14% Segwit adoption. It seems we will see an uptick in adoption levels as per what's outlined in this article here.  Layer 2 (Lightning Network) solution implementation will bring fees down to facilitate not just micro transactions but nano transactions.  Furthermore, tx times will be instantaneous.


----------



## TheBigShort

tecate said:


> It proves the point I made back then. Even with Credit Cards, this notion that they were protecting customers was absolute nonsense. If that was the case, you couldn't buy any sports betting product with credit card. What really caps it off and proves it beyond doubt are the examples where they're banning Debit Card purchases.
> It's exactly nonsense like this that led me to Bitcoin in the first place. Who the hell are they to dictate how anybody spends their money



Do you have any concrete examples of this? As I would imagine this is stepping over the line with regard to the rights of the individual to engage in free trade.
In order for a bank to put a block on debit card payments they have to have a reasonable basis to do.
When I sold bitcoin and deposited to my bank account it took a number of days for it to arrive. I called up the bank to inquire if there was any issue at their end or were there issues dealing with Coinbase. The customer service was pretty emphatic, they do not interfere in transactions where payer and payee have authorized the transaction. 

They are mere facilitators in that regard. 

It makes sense, if banks can at their own discretion block transactions between particular parties, with money that does not belong to them, then the prospect of market manipulation, price manipulation, unfair trade etc occuring would be ominous.


----------



## tecate

TheBigShort said:


> Do you have any concrete examples of this?


Here you go.


----------



## TheBigShort

That's great thanks.

First point of note, its India, and not the EU, and my thinking is in terms of being an EU citizen.

This is what Citibank India says;

_"Given concerns, both globally and locally, including from the Reserve Bank of India, cautioning members of the public regarding the potential economic, financial, operational, legal, customer protection, and security-related risks associated in dealing with bitcoins, cryptocurrencies, and virtual currencies, Citi India has decided to not permit usage of its credit and debit cards towards purchase or trading of such bitcoins, cryptocurrencies and virtual currencies,” 
_
this probably amounts to their "reasonable basis"? In response;

_'India’s cryptocurrency industry has sought to play down Citibank’s move. "Most purchases are done through internet banking, not using debit or credit cards", said Ajeet Khurana, head of the Blockchain and Cryptocurrency Committee, an industry lobby.'
_
So perhaps my err, banks can stop the use of trade through using their debit card, but my thinking was stopping the trade altogether. My transactions with Coinbase were all on-line. It may also be possible to block website access? But if this is the case, I would agree what it says further in the article;

_"Even if banks were to justify this as necessary to mitigate their risk, I would find such a view to be very conservative and unjustifiable, which leads me to think that this is arm-twisting,” said Anirudh Rastogi,managing partner at law firm TRA, which represents several cryptocurrency businesses_."

In any case, back in the EU, the ECB currently has this to say on its website;

_"It is not the ECB’s responsibility to ban or regulate bitcoin or other cryptocurrencies. But, given the lack of consumer protection, it is important to exercise caution."

https://www.ecb.europa.eu/explainers/tell-me/html/what-is-bitcoin.en.html
_
So I think we are a long way from interference by the ECB at this point.
_
_


----------



## tecate

TheBigShort said:


> First point of note, its India, and not the EU, and my thinking is in terms of being an EU citizen.


Makes no odds - to ban Debit Card transactions is completely wrong regardless of what country it happens in.

On the mitigating risk in terms of Credit Card transactions, if that's the case, why are they not mitigating risk by banning spend on Gambling services such as PaddyPower?  Don't tell me that there are no hardcore gamblers that have not maxed out their Credit Cards on betting.  Not only does this make a nonsense of their 'mitigating risk' argument, it also makes a nonsense of their 'protecting customers' argument.


TheBigShort said:


> So I think we are a long way from interference by the ECB at this point.


Well, lets hope they don't pick up any bad habits from the Polish!


----------



## TheBigShort

tecate said:


> Makes no odds - to ban Debit Card transactions is completely wrong regardless of what country it happens in.



Totally agree, all it does is add weight to the reason to hold money outside the system. Come to think of it, if type of policy begins to catch on, I would imagine bitcoin price to rise rapidly.



tecate said:


> Well, lets hope they don't pick up any bad habits from the Polish!


----------



## jman0war

State-owned Punjab National Bank cited in a nearly $2 billion fraud case.

You know those state-run, regulated institutions that are there to protect your money, or something.


> It is alleged they obtained fraudulent advances for payments to overseas suppliers worth about $1.8bn (£1.3bn) from the Indian government-run lender.


http://www.bbc.com/news/business-43110085


----------



## tecate

jman0war said:


> As people lose confidence in FIAT money retaining value, they'll want to buy bitcoin.


This old FIAT is great stuff altogether.

[broken link removed]


Zimbabwe 2.0?


----------



## Duke of Marmalade

tecate said:


> This old FIAT is great stuff altogether.
> 
> [broken link removed]
> 
> 
> Zimbabwe 2.0?


That seems an awful waste of paper and ink.  He could simply launch cryptocurrencies till his heart's content from his laptop.


----------



## Negotiator

tecate said:


> This old FIAT is great stuff altogether.



Tiz mighty stuff.....the only thing that's standing in the way of solving all our problems is a monkey load of paper and a few gallons of ink....fire up those printers Ted!


----------



## tecate

Duke of Marmalade said:


> That seems an awful waste of paper and ink.  He could simply launch cryptocurrencies to his heart's content from his laptop.


In fairness, Mr. Nene is only stating publicly what other finance ministers have thought.  I suppose we should commend him for his honesty in revealing the fundamental flaw in having a centralised FIAT currency.

As regards your weak rebuttal, this thread is about Bitcoin rather than cryptocurrencies generally.  That said, we've been over this...a crypto from the Dutchy of Marmalade would be worth nothing whatsoever.  Bitcoin on the other hand has an exchange value - and it looks like it will cost a hell of a lot more S.A. Rand going forward in exchange for it.

Only the truly desperate would try to defend this.  If there was any merit in your point of view, you'd just come out and admit that there is a flaw in centralised FIAT currency and the proposed actions of South Africa's Finance Minister reveal it.  I won't hold my breath though...


----------



## Duke of Marmalade

So you can reference the South African Rand to demonstrate a generic flaw in all Fiat.  Yet I am not allowed to generalise from bitcoin to crypto.  Bitcoin is a lot closer to its crypto cousins (and offspring) than, say, the dollar is to the Rand.



tecate said:


> Only the truly desperate would try to defend this.


I wasn't defending Mr Nene at all.  I was criticising him for being behind the times.  There are much more efficient ways in this digital era to defraud his people.

Mr Nene has a lot in common with BC folk.  He believes he can create wealth out of nothing.  BC folk think they have created $200bn out of nothing.  Admittedly they have adjusted their sights downwards from $400bn a few weeks ago.


----------



## Sunny

tecate said:


> This old FIAT is great stuff altogether.
> 
> [broken link removed]
> 
> 
> Zimbabwe 2.0?



Where do you find this tripe?? Not one reputable news outlet has carried this story. The South African rand hasn't collapsed. There hasn't been a huge outflow of capital. What does that tell you about that story?


----------



## tecate

Duke of Marmalade said:


> So you can reference the South African Rand to demonstrate a generic flaw in all Fiat.


You have a penchant of late in going off topic.  I referenced the South African Rand as FIAT had been referenced in the context of this discussion.  In any event, you referenced other crypto's - I didn't stop you, did I?

Other than that, it very much does demonstrate a generic flaw in FIAT - which is relevant in the overall context of the development and evolution of Bitcoin.  No clear acknowledgement from yourself that FIAT is flawed in this respect....but that's fine Duke.  Others can make up their own minds.



Duke of Marmalade said:


> I wasn't defending Mr Nene at all.  I was criticising him for being behind the times.  There are much more efficient ways in this digital era to defraud his people.


No.  You tried to twist it around and make it about Cryptocurrency - just like you are doing once again.  Just so that we're clear, FIAT is imposed on citizens - Crypto use is up to the individual, it's a choice.  That's why I would choose Bitcoin over the useless 'Marmalade' coin.


----------



## tecate

Sunny said:


> Where do you find this tripe?? Not one reputable news outlet has carried this story. The South African rand hasn't collapsed. There hasn't been a huge outflow of capital. What does that tell you about that story?



If the story is fake, that's fair enough. I'm hardly responsible for the media, am I?

In any event, for the purposes of this discussion, the point is that FIAT can be printed off at will whereas Bitcoin can't. This has happened and will happen in the future.


----------



## jman0war

Same article is here:  http://yournewswire.com/south-africa-print-money-rich/
Journalist is Baxter Dmitry, his contact information is at the bottom of the article.

Could contact him to see what the source of the quote is.

I think it's a troll website, a bit like the Onion.


----------



## newirishman

That is an interesting discussion over the last few posts. Surely bitcoin is text box definition of fiat money?
Looking at Wikipedia:


> Fiat money has been defined variously as:
> 
> Any money declared by a government to be legal tender.
> State-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard.
> Intrinsically valueless money used as money because of government decree.
> *An intrinsically useless object that serves as a medium of exchange (also known as fiduciary money.*)
> While gold- or silver-backed representative money entails the legal requirement that the bank of issue redeem it in fixed weights of gold or silver, *fiat money's value is unrelated to the value of any physical quantity*. A coin is fiat currency to the extent that its face value, or value defined in law, is greater than its market value as metal.
> The term _fiat_ derives from the Latin _fiat_ ("let it be done") used in the sense of an order, decree or resolution.


----------



## Duke of Marmalade

newirishman said:


> That is an interesting discussion over the last few posts. Surely bitcoin is text box definition of fiat money?
> Looking at Wikipedia:


Yes indeed bitcoin meets most of those criteria.  However it misses a couple.  No government has declared it as legal tender.  It is not backed by any State.  BC folk argue that it is these very failings which give a $10,000 (or $20,000 take your pick) value to something which is "an intrinsically useless object".


----------



## tecate

newirishman said:


> That is an interesting discussion over the last few posts. Surely bitcoin is text box definition of fiat money? Looking at Wikipedia:


Only in the context of the specific item that you highlight.  i.e. that FIAT is just a piece of paper, equally bitcoin is just a line of code.  Otherwise, it's a decentralised currency that is not defined by borders.  No middleman has to have control of it i.e. you can store it yourself and transact it at will.



Duke of Marmalade said:


> No government has declared it as legal tender.


Getting into semantics here.  A number of States have classified it as a currency - the most notable of which is Japan.  Meanwhile, a couple of States in the U.S. are in the process of pushing legislation through to facilitate tax payments in Bitcoin.



Duke of Marmalade said:


> It is not backed by any State.


We've been over this 'backing' business.  The gold standard is dead - your FIAT is backed by jack.



Duke of Marmalade said:


> BC folk argue that it is these very failings


You didn't mention the failings though, did you?  ...like the one we were just discussing...FIAT can be printed at will.  FIAT can be disappeared by the bank that holds it on your behalf (Bank of Cyprus anyone?)  The bank that holds it on your behalf can decide whether they let you use it or not (i.e. they can lock access to your funds) or they can decide what you can spend it on (recent nonsense with regard to purchasing bitcoin using credit and debit cards).



Duke of Marmalade said:


> "an intrinsically useless object".


I think you need to have a look back at newirishman's post.  That text is lifted from a description of your beloved FIAT ;-)


----------



## Duke of Marmalade

tecate said:


> I think you need to have a look back at newirishman's post.  That text _(an intrinsically useless object)_ is lifted from a description of your beloved FIAT ;-)


I know its context.  Are you arguing that bitcoin is not _"an intrinsically useless object"?_


----------



## tecate

Duke of Marmalade said:


> Are you arguing that bitcoin is not _"an intrinsically useless object"?_


I'm pointing out that FIAT doesn't have anything more to offer in terms of intrinsic value than BTC.


----------



## Duke of Marmalade

tecate said:


> I'm pointing out that FIAT doesn't have anything more to offer in terms of intrinsic value than BTC.


And I was pointing out that Fiat's "intrinsically useless object" get's its "value" from State decrees and management and that, ironically, it is the very absence of such State involvement that have BC folk giving the BTC intrinsically useless object values of $10,000 or $20,000. 

It is I admit a bit of a confidence trick (not meant in a derogatory way) to give any intrinsically useless object value; Satoshi recognised that.  I get my confidence in the euro from the fact that the central apparatus of one of the largest and most developed economic blocs on earth is committed to maintaining that confidence and has succeeded for nearly 20 years and shows every sign of succeeding over the medium future, if long term inflation linked euro bond yields are any guide. 

Satoshi's holy grail was to create a currency that did not need such central management of its value (which indeed would be an impressive achievement) but s/he recognised that this required bitcoins to have some intrinsic value .  S/he squared the circle by arguing that if it was used as a currency then it would have achieved intrinsic value.  IMHO that is very flawed logic and was borne of wishful thinking, as clearly Satoshi was not thick.  Fiat has no such pretensions - it accepts that it has no intrinsic value.  Its use as a currency is derived from other attributes. 

But we are going round in circles. 





			
				tecate relishing fake news said:
			
		

> This old FIAT is great stuff altogether.


You started this latest cul de sac by giving us fake news about the Rand to condemn all Fiat.  Rather like Mr Trump retweeting some isolated muslim outrage to attack all muslims.


----------



## tecate

Duke of Marmalade said:


> And I was pointing out that Fiat's "intrinsically useless object" get's its "value" from State decrees and management


It has historically built up market sentiment and structures... structures that fail time and time again.  You only cite the better examples (euro, USD & GBP).... whilst conveniently evading the basket case currencies - a list of which is on hand in any given year.  Their plight is brought about through centralised mismanagement.  Even the euro project is flawed but there isn't a maturity in your viewpoint to acknowledge this.



Duke of Marmalade said:


> ironically, it is the very absence of such State involvement that have BC folk giving the BTC intrinsically useless object values of $10,000 or $20,000.


Decentralisation is a key aspect of bitcoin.  Nobody can interfere with it in the same way as FIAT.
As regards the jibe about valuation, we've been over this.  We're in a price discovery phase with Bitcoin.  The currency itself has not evolved fully as yet - nor its ecosystem.  However, at no point will you acknowledge this. It doesn't make for maturity of thought and rationale but then if you're so caught up in your entrenched position...



Duke of Marmalade said:


> It is I admit a bit of a confidence trick


That many FIAT currencies started out as Gold backed and once market sentiment was established, they pulled the backing out from under it?  I agree.



Duke of Marmalade said:


> I get my confidence in the euro from the fact that the central apparatus of one of the largest and most developed economic blocs on earth is committed to maintaining that confidence and has succeeded for nearly 20 years and shows every sign of succeeding over the medium future, if long term inflation linked euro bond yields are any guide.


It has been pointed out to you at length that the euro project is flawed.  Furthermore, whilst the larger economy blocks are stable, that's not the case elsewhere.  BTC doesn't recognise borders and has a use case wherever there is state mismanagement of the economy and the respective FIAT currency.



Duke of Marmalade said:


> Satoshi's holy grail was to create a currency that did not need such central management of its value (which indeed would be an impressive achievement) but s/he recognised that this required bitcoins to have some intrinsic value .  S/he squared the circle by arguing that if it was used as a currency then it would have achieved intrinsic value.  IMHO that is very flawed logic and was borne of wishful thinking, as clearly Satoshi was not thick.  Fiat has no such pretensions - it accepts that it has no intrinsic value.  Its use as a currency is derived from other attributes.


Nonsense.  In terms of Intrinsic value, they're both the same.  In terms of 'other attributes', they both have a very different set of them.  Furthermore, you approach this subject as if it's a winner takes all scenario..that one must win out.  That's not the case. Crypto's do certain things better and have a use case.



Duke of Marmalade said:


> But we are going round in circles. You started this latest cul de sac by giving us fake news about the Rand to condemn all Fiat.


You have some nerve to point the finger re. talk of going round in circles & cul de sacs given that you have taken a number of threads off topic to pursue exactly that....regurgitating the same argument.
On the fake news jibe, it doesn't say much for either one of you to hold me accountable for the media. You both know perfectly well I took that article and the direct quotation at face value. You're suggesting that I knowingly spread fake news.  That says a lot about the extent of your entrenched position and immaturity in this discussion.

If the article is inaccurate, no problem.  The point still stands though - Certain states have gone to the printers in mismanaging their FIAT currencies in the past.


Duke of Marmalade said:


> Rather like Mr Trump retweeting some isolated muslim outrage to attack all muslims.


Contemptible.  As regards the 'isolated' aspect, there's a whole list of failed FIAT currencies past and present.  Furthermore, you can be sure there's another one in process as we speak.  That puts paid to your 'isolated' nonsense.


----------



## cremeegg

newirishman said:


> Surely bitcoin is text box definition of fiat money?



Just when I was getting bored of Bitcoin. Brilliant, Brilliant. Post of the thread.


----------



## Duke of Marmalade

tecate said:


> That many FIAT currencies started out as Gold backed and once market sentiment was established, *they *pulled the backing out from under it?  I agree.


I inserted the bold, this time to deliberately promote my worldview.  They?  THEY?  This epitomizes the paranoic delusion central to Shortie Syndrome 

THEY?  A wicked elite who encashed all their currency for gold and then conned the rest of us by issuing Fiat?

This is what they teach in the universities.  It was recognised that part of the problem of the Great Depression was the deflationary influence of the gold standard.  The gold standard was abandoned and one of the greatest leaps in modern economic management was launched - Fiat currency, freely manageable in supply to support the economy's real needs.  The result has been the most remarkable transformation of human economic activity which has resulted in growth beyond anybody's wildest dreams.  Fiat has been adopted by every country in the World.  Nobody uses a gold standard any more.  But hey, the whole World is dominated by elites engaged in this gigantic fraud.

Givuz a break!


----------



## tecate

Duke of Marmalade said:


> They?  THEY?  This epitomizes the paranoic delusion central to Shortie Syndrome...
> THEY?  A wicked elite who encashed all their currency for gold and then conned the rest of us by issuing Fiat.


The tyrannical rant isn't helpful.  Other that that, of course it's a "they".  Did I speculate or make any comment on the "they".?  It's a centralised system... someone made a decision to drop the gold standard.  Do you have basic comprehension difficulties?



Duke of Marmalade said:


> central to Shortie Syndrome (incidentally where has B/S gone?  Seems to have vanished since the Fly spotted the dual personality).


Firstly, I think it's pretty contemptible that you resort to petty personalised labelling of another poster.  Secondly, It's equally contemptible that two of you now accuse me of having 2 forum personas - classy.



Duke of Marmalade said:


> they, the whole World is dominated by elites engaged in this gigantic fraud.


More fiction.  I didn't mention any elite group. John Grisham is only in the hapenny place by comparison.


Duke of Marmalade said:


> Givuz a break!


The irony....


----------



## jman0war

Duke of Marmalade said:


> And I was pointing out that Fiat's "intrinsically useless object" get's its "value" from State decrees and management and that, ironically, it is the very absence of such State involvement that have BC folk giving the BTC intrinsically useless object values of $10,000 or $20,000..


Like a moth you've flown close to the flame here. Those "State decrees and management" come down to dictates, compulsion, coercion.
The State uses coercion over it's people and the threat of coercion to pay for it's Debt-based money.


----------



## Duke of Marmalade

_tecate _why has the whole World adopted Fiat?


----------



## jman0war

Because all the wealthy countries were doing it, so they had to follow suit.


----------



## jman0war

I think you may be confused about something Duke.
It's the Fractional Reserve system that has enabled banks to loan money it doesn't have.

Whether that currency is commodity based or FIAT.


----------



## tecate

Duke of Marmalade said:


> _tecate _why has the whole World adopted Fiat?


I acknowledge that FIAT has attributes & qualities but that doesn't make it perfect.  It's the nature of things that we devise better systems.  I'm not suggesting that crypto's are a panacea.  However, I do believe that they bring something to the party and have several use cases. 
Additionally, I'm also not approaching this subject as if it has to be one or the other.  Crypto's have their use cases and potentially can coexist alongside FIAT.


----------



## TheBigShort

Duke of Marmalade said:


> THEY? A wickeid elite who encashed all their currency for gold and then conned the rest of us by issuing Fiat?



Are you talking about when the US government banned the use of gold in 1933? Confiscating it for $20 an ounce only to devalue that $20 three years later by 75%?
Or are talking about when Nixon abandoned the Gold Standard in 1971 in order to avoid bankruptcy?



Duke of Marmalade said:


> This is what they teach in the universities.



They? THEY?

Who are THEY that you speak of? Which universities are you talking about?



Duke of Marmalade said:


> It was recognised that part of the problem of the Great Depression was the deflationary influence of the gold standard



The causes of the Great Depresson are numerous but primarily led by a stock market bubble and crash, subsequent bank closures and lack of investment in the economy - where have we heard that before?
Arguably, the gold standard hampered recovery.
The crash of 2007/8 is considered the biggest crash since the Great Depression, and occured _without _a gold standard,  giving weight to factors other than gold being primarily responsible for booms and busts.



Duke of Marmalade said:


> The gold standard was abandoned and one of the greatest leaps in modern economic management was launched - Fiat currency, freely manageable in supply to support the economy's real needs.



Eh, fiat currency has been around through the ages.



Duke of Marmalade said:


> The result has been the most remarkable transformation of human economic activity which has resulted in growth beyond anybody's wildest dreams



Yep, even last year, who could imagine our 26% economic growth? Even the leprechauns were wetting themselves.
For sure, some remarkable achievements have been obtained through science and medicine in particular.
But it also comes with a cost. Climate change, plastic pollution of oceans, obesity, income inequality, perpetual debt and bankruptcies, perpetual war. Closer to home, we have record numbers of homeless and posters on this site calling for fast-track repossession orders for banks that couldnt pay their own debts when it came to it.
You have to wonder, what is all this economic 'growth' for if its primary measure is how much GDP has grown.



Duke of Marmalade said:


> Nobody uses a gold standard any more.



Makes you wonder why governments hold onto all that gold though doesnt it?
I wonder if it has anything to do with the invariable return of paper fiat currencies to zero value?



Duke of Marmalade said:


> But hey, the whole World is dominated by elites engaged in this gigantic fraud.



What delusional planet are you on now? Perhaps you should read up on what French President De Gaulle had to say about the US Dollar in 1965, see if it resonates in any way with events of today. Or what Sarkozy said about it in 2009?

There is endless information from financial analysts and economists home and abroad about the fundamental problems of the Euro and we know too well all about that - dont they teach this in the universities?

Nevermind the emergence of China as the second biggest economy in the world, and with it, their efforts to place the Yuan as global reserve currency to compete with the US Dollar.

Nevermind the US military and its proxy wars in Libya, Yemen, Syria in order to preserve the Dollar as the reserve currency through energy control.

We are fortunate that we are on the 'right' side of these affairs, insofar and as long as our wealth is protected and preserved - even that was touch and go in 2010/11.
But as much as i am open to the possibilty of bitcoin returning to zero, I am open to the possibilty that the euro _could_ collapse, that another deep recession _may_ not be far away, that international tensions _may_ escalate into something more sinister.

History informs that these are real possibilities.

This is distinct from saying they _will _happen, which is unfortunately how your delusional disorder tends to read things.


----------



## Duke of Marmalade

jman0war said:


> I think you may be confused about something Duke.
> It's the Fractional Reserve system that has enabled banks to loan money it doesn't have.
> 
> Whether that currency is commodity based or FIAT.


No I am not confused in this regard.  Now FR would take us way off topic but as you may have guessed I am a fan of FR.

What I am referring to is the more than 100 fold growth in the US economy since 1929.  No commodity based currency could possibly have been adequate to the task of matching the economy’s needs for transactional money.  The gold standard would have been hugely deflationary and giving people a big incentive to hoard would have seriously held back growth.  It is a major advance for civilization that its money can be managed to meet the needs of the economy and is not artificially tied to the supply of some commodity.

The fiscal management of the economy as expounded by Keynes was also a major breakthrough.

But yes of course both monetary policy and fiscal management are open to abuse.  I was a tad nervous during the crisis but I could never ever see salvation in bitcoin.  I genuinely just can’t figure that one out at all.


----------



## TheBigShort

Duke of Marmalade said:


> The gold standard would have been hugely deflationary and giving people a big incentive to hoard would have seriously held back growth.



There is reasonable arguement, considering the environmental dangers facing the planet that growth restraint, or preferably growth measurements based on sustainable practices and not solely on shallow mathematical equations such as GDP are the way forward for bringing greater prosperity to all corners of the planet.



Duke of Marmalade said:


> It is a major advance for civilization that its money can be managed to meet the needs of the economy and is not artificially tied to the supply of some commodity.



You mean backed by nothing other that government decree. Governments  - always to be trusted and never fail in Dukes LaLa Land.



Duke of Marmalade said:


> I could never ever see salvation in bitcoin.



Does anybody?


----------



## Firefly

TheBigShort said:


> There is reasonable arguement, considering the environmental dangers facing the planet that growth restraint, or preferably growth measurements based on sustainable practices and not solely on shallow mathematical equations such as GDP are the way forward for bringing greater prosperity to all corners of the planet.



And Bitcoin is really helping here isn't it?


----------



## tecate

Firefly said:


> And Bitcoin is really helping here isn't it?


Sure, it's an issue.  However, are we going to look at that in isolation and not bear in mind that it's still a developing situation?  As and when Layer 2 solutions come on stream, whilst current energy consumption won't go down, the number of transactions completed has the potential to increase exponentially without the need for more energy usage.
Furthermore, this problem is driving innovation.  There's plenty of energy that simply gets wasted - because it's not of any use at the time of production or it's not of use in the location it's produced.  Miners are now co-locating with energy producers at point of source.

You're right to make the point.  However, clearly this area is evolving.  Additionally, some would contend that the total energy requirement of the complete banking system is just as energy hungry if not moreso.

Lastly, the use of Proof of Stake rather than a Proof of Work validation system (the latter being the energy hungry one) is being mulled over.  May not happen in the case of Bitcoin as there are other considerations.  However, it's worth bearing in mind that some crypto's use Proof of Stake.


----------



## Duke of Marmalade

tecate said:


> Lastly, the use of Proof of Stake rather than a Proof of Work validation system (the latter being the energy hungry one) is being mulled over.  May not happen in the case of Bitcoin as there are other considerations.


I think you know it won't happen in the case of bitcoin.  The protocol is set up to control the timing of the release of bitcoin. The timing is dictated by the amount of CPU power devoted to the puzzles.  The amount of CPU power is dictated by the rewards in being allocated new bitcoins for solving the puzzles.  No amount of layers or changing the nature of the puzzle (from POW to POS) can alter these bitcoin economic realities.


----------



## tecate

Duke of Marmalade said:


> I think you know it won't happen in the case of bitcoin.


Yes, I agree that it's unlikely that they would make such a fundamental change in the case of bitcoin (although a leading Bitcoin Developer recently called for the change).  However, there are other crypto's using Proof of Stake.


Duke of Marmalade said:


> No amount of layers or changing the nature of the puzzle (from POW to POS) can alter these bitcoin economic realities.


If you are suggesting that in a scenario where the use of Layer 2 applications was to be exponential, you're absolutely wrong in saying that it won't have an effect in terms of overall energy usage / energy usage proportional to the number of transactions.

Secondly, you blindly ignore innovative solutions to actual usage that I outlined simply because you can't approach this topic with an open mind.


----------



## tecate

Duke of Marmalade said:


> But yes of course both monetary policy and fiscal management are open to abuse.  I was a tad nervous during the crisis but I could never ever see salvation in bitcoin.  I genuinely just can’t figure that one out at all.


You've been told countless times before but you won't take it on board.  It's not an all or nothing deal.  Crypto and FIAT will co-exist.  You are entrenched in a position where you maintain FIAT good, CRYPTO bad.  Nothing is ever black and white. 

However, we do FINALLY have one glimmer of objectivity from you i.e. the long overdue admission that centralised systems are open to abuse.  As regards bitcoin being a panacea, who here has ever suggested that??


----------



## Duke of Marmalade

tecate said:


> If you are suggesting that in a scenario where the use of Layer 2 applications was to be exponential, you're absolutely wrong in saying that it won't have an effect in terms of overall energy usage / energy usage proportional to the number of transactions.


Let's leave the handbags at the door just for a moment.  It is possible  that I don't fully understand this aspect, and I do want to improve my understanding.  

Layer 2 aspires to address scalability issues, and I presume it will achieve that.  But what is driving the energy usage in bitcoin's case is the hunger of the miners to get more bitcoin at these prices.  Even if main blockchain activity were to fall to a trickle the protocol says the reward for the puzzles can only be allocated every 10 minutes on average.  The number of transaction per block may fall off dramatically with Layer 2 but that doesn't change the economics of the puzzle.  It is a race by the CPU power to solve the puzzle and get the rewards.  The more CPU power is dedicated to the race the harder the puzzles are made thus underpinning the energy usage.  Validating the transactions and the number of transactions are completely irrelevant to this game.  The economics would stay the same even if there was only one transaction per new block.

But I may have that all wrong.  In any event I was never really hung up on this eco criticism of bitcoin.


----------



## tecate

Duke of Marmalade said:


> Let's leave the handbags at the door just for a moment.


I never brought mine - I suggest you decommission yours permanently.



Duke of Marmalade said:


> Layer 2 aspires to address scalability issues, and I presume it will achieve that.


Well, if it doesn't, you'll get your wish as I think Bitcoin would be toast and until actual implementation, it remains to be seen if it does so.



Duke of Marmalade said:


> But what is driving the energy usage in bitcoin's case is the hunger of the miners to get more bitcoin at these prices.  Even if main blockchain activity were to fall to a trickle the protocol says the reward for the puzzles can only be allocated every 10 minutes on average.  The number of transaction per block may fall off dramatically with Layer 2 but that doesn't change the economics of the puzzle.  It is a race by the CPU power to solve the puzzle and get the rewards.  The more CPU power is dedicated to the race the harder the puzzles are made thus underpinning the energy usage.  Validating the transactions and the number of transactions are completely irrelevant to this game.  The economics would stay the same even if there was only one transaction per new block.


If most of the transactions end up being carried out off-chain, then there's less puzzles to be solved.  The backbone will still have the same existing overhead (the chain itself as it exists right now).  However, the energy requirement of that chain won't grow in proportion to an escalation in the number of actual transactions - if those transactions occur via Layer 2 - off-chain.


----------



## Duke of Marmalade

tecate said:


> If most of the transactions end up being carried out off-chain, then there's less puzzles to be solved.


I don't think that's right.

Rules of the bitcoin game:

We are aiming to take 10 minutes to solve the puzzle
If you do so first  you will get 12.5 bitcoin, that's c. $125k
I see there are 100 zigawatts about to play the game
I therefore set the difficulty to X so as to target our 10 mins objective
Ready, set, go!

No mention of transactions there.  The scalability problem is that because of the 10 mins rule the blocks are not being added fast enough for current transactional demand - people have to wait or pay extra transaction fees.  Layer 2 addresses that by going off chain, but it does not change the rules and economics of the primary blockchain puzzle. I am making no big deal of this, just want to be sure I am not fundamentally misunderstanding the whole thing.


----------



## tecate

A volume of transactions off-chain without the need for additional hash power means less overall energy requirement whilst increasing the number of transactions exponentially.


----------



## Duke of Marmalade

tecate said:


> A volume of transactions off-chain without the need for additional hash power means less energy requirement *proportional to the overall volume* of transactions achieved.


Well, sure, can't argue with that.


----------



## tecate

Duke of Marmalade said:


> Well, sure, can't argue with that.


Statement edited .  Ergo, it can scale without expanding energy requirement.


----------



## TheBigShort

Firefly said:


> And Bitcoin is really helping here isn't it?



It is no different to any other industry, product, service or thing that uses energy now, or in the future.
Its the source of that energy that is at issue and the effects of carbon emuissions (if any) that is the issue.
The planet has an abundance of clean renewable energy sources that if harnassed could alleviate the need for dirty fossil fuel energy.

(..._wait a second, I know you quoted my comment, but are you sure you meant to? You do get mixed up, a lot!) _

I would suggest bitcoin is better placed to adapt than most industries.

Im sure this has been explained to you before, but is there any point I wonder?


----------



## Gus1970

I would like to add that a layer2 solution is only one of the possible options for scaling bitcoin without extra hashing power. Hashing power and amount of transactions are not related if we ignore the competition to get transaction fees


----------



## tecate

Gus1970 said:


> I would like to add that a layer2 solution is only one of the possible options for scaling bitcoin without extra hashing power. Hashing power and amount of transactions are not related if we ignore the competition to get transaction fees


Schnorr signatures being another one ....and of course, Segwit impementation is still only at 30%.


----------



## Gus1970

Segwit is a fix to the malleability problem that was built to enable layer 2 solutions, I am talking about larger blocks also


----------



## Sunny

TheBigShort said:


> It is no different to any other industry, product, service or thing that uses energy now, or in the future.
> Its the source of that energy that is at issue and the effects of carbon emuissions (if any) that is the issue.
> The planet has an abundance of clean renewable energy sources that if harnassed could alleviate the need for dirty fossil fuel energy.
> 
> (..._wait a second, I know you quoted my comment, but are you sure you meant to? You do get mixed up, a lot!) _
> 
> I would suggest bitcoin is better placed to adapt than most industries.
> 
> Im sure this has been explained to you before, but is there any point I wonder?



But why would we want to? What on earth is about Bitcoin that justifies Iceland using more energy mining something like Bitcoin than it does for powering every home in the Country. Even if it renewable energy, it is still a waste. At the moment, there is no tangible use for Bitcoin that justifies it apart from financial speculation.

Even if we forget about complex maths and energy consumption, I still can't get my head around why this thing is being seen as the next big thing. I don't even know what problem it is trying to solve? Decentralised versus Centralised? Fine but the vast majority of the world are quiet happy with the current situation. Rightly or Wrongly. There is a significant number of people who will never trust a computer over a physical note. You might call them stupid but that's the reality. There isn't some huge clamour for the end of central banks. Getting rid of intermediaries? Why? What if I actually want an intermediary for things like trade finance, invoice discounting? What if my broadband was rubbish this month and I want a refund on the Direct Debit they took from me? Maybe I am just old but I really can't see why everyone is getting so excited about this apart from a speculation and novelty point of view.


----------



## Gus1970

I'll try to help



Sunny said:


> Even if we forget about complex maths and energy consumption, I still can't get my head around why this thing is being seen as the next big thing. I don't even know what problem it is trying to solve?.



By solving the byzantine generals problem (previously unresolved) enables trustless transactions without the risk of double spending

In layman terms "it enables secure transactions with no intermediary" (banks become obsolete)

Feel free to ask if you need more info


----------



## Duke of Marmalade

Gus1970 said:


> I'll try to help
> 
> 
> 
> By solving the byzantine generals problem (previously unresolved) enables trustless transactions without the risk of double spending
> 
> In layman terms "it enables secure *transactions *with no intermediary" (banks become obsolete)
> 
> Feel free to ask if you need more info


Transactions in what?  If you answer "bitcoin" I will ask the supplementary "what is bitcoin?" so let's skip the middle step.


----------



## Gus1970

I'm not sure I understand your question


----------



## Duke of Marmalade

Okay I'll be more direct.  Wikipedia describes Fiat as an "intrinsically useless object".  Do you agree that bitcoin is also an intrinsically useless object?  To shortcut the possible need for supplementaries, these are they:

A.  If you think that unlike fiat bitcoin does (as Satoshi argues) have intrinsic value please explain why you are of that opinion.

B.  If on the other hand you agree that bitcoin is an "intrinsically useless object" why would I care that it is trustless, secure and decentralised?


----------



## jman0war

Sunny said:


> But why would we want to? What on earth is about Bitcoin that justifies Iceland using more energy mining something like Bitcoin than it does for powering every home in the Country. Even if it renewable energy, it is still a waste. At the moment, there is no tangible use for Bitcoin that justifies it apart from financial speculation.


 The market demand justifies the use.
How much energy does traditional banking and all those intermediaries consume?
Immeasurable.


Sunny said:


> There isn't some huge clamour for the end of central banks. Getting rid of intermediaries? Why? What if I actually want an intermediary for things like trade finance, invoice discounting? What if my broadband was rubbish this month and I want a refund on the Direct Debit they took from me? Maybe I am just old but I really can't see why everyone is getting so excited about this apart from a speculation and novelty point of view.


Because they are not needed in the majority of transactions and are a drag on transacting.
Just hold your horses until the next cyclic economic crash and/or currency panic.
A lot of people will be looking for a place to store accumulated wealth.


----------



## Gus1970

Duke of Marmalade said:


> Okay I'll be more direct.  Wikipedia describes Fiat as an "intrinsically useless object".  Do you agree that bitcoin is also an intrinsically useless object?  To shortcut the possible need for supplementaries, these are they:
> 
> A.  If you think that unlike fiat bitcoin does (as Satoshi argues) have intrinsic value please explain why you are of that opinion.
> 
> B.  If on the other hand you agree that bitcoin is an "intrinsically useless object" why would I care that it is trustless, secure and decentralised?



I fail to see a link between my answer and this question and I won't weigh in.
On the other hand, if you want to further discuss my answer to "what problem is bitcoin trying to solve?" I will be happy to continue the conversation


----------



## Leo

jman0war said:


> How much energy does traditional banking and all those intermediaries consume?



A lot less than 250kWh per transaction.


----------



## Sunny

jman0war said:


> The market demand justifies the use.
> How much energy does traditional banking and all those intermediaries consume?
> Immeasurable.



What market demand apart from financial speculation??



jman0war said:


> Because they are not needed in the majority of transactions and are a drag on transacting.
> Just hold your horses until the next cyclic economic crash and/or currency panic.
> A lot of people will be looking for a place to store accumulated wealth.



That's fine but Bitcoin isn't the solution either. There are plenty of centralised alternatives to banks for transactions with almost zero fees if that's what people want. There are plenty of occasions when intermediaries are needed and Bitcoin will never be able to meet that need so how does bitcoin make banks obsolete as someone says above?

I don't get the next bit about the next cyclic economic crash and looking for a place to store wealth? Are you suggesting that will be Bitcoin? It's a bit far fetched to claim that people are investing in Bitcoin to store and protect accumulated wealth? If they are, they are nuts....


----------



## jman0war

Sunny said:


> What market demand apart from financial speculation??


Market demand doesn't need to conform to your preferences. Whether that market demand be speculation or online purchases, or paying strippers. Market demand is just that, it's demand. Where there is demand, supply shall follow.


Sunny said:


> That's fine but Bitcoin isn't the solution either. There are plenty of centralised alternatives to banks for transactions with almost zero fees if that's what people want. There are plenty of occasions when intermediaries are needed and Bitcoin will never be able to meet that need so how does bitcoin make banks obsolete as someone says above?


Bitcoin enables people to transfer value with one another across distance very quickly, without intermediaries approval, without limits and without censorship.
Banking will never do that.


Sunny said:


> I don't get the next bit about the next cyclic economic crash and looking for a place to store wealth? Are you suggesting that will be Bitcoin? It's a bit far fetched to claim that people are investing in Bitcoin to store and protect accumulated wealth? If they are, they are nuts....


That's because you are somewhat uninformed about Bitcoin.
As an offshore, censorship resistant store of funds.
Companies that have global supply chains don't want their entire operation frozen on say, a single judge in Brussels dictate.
By keeping funds off shore in an seizure-resistant system.

http://www.businessinsider.com/cryp...ned-by-crypto-hedge-fund-cio-ari-paul-2017-11


----------



## tecate

Sunny said:


> But why would we want to? What on earth is about Bitcoin that justifies Iceland using more energy mining something like Bitcoin than it does for powering every home in the Country. Even if it renewable energy, it is still a waste. At the moment, there is no tangible use for Bitcoin that justifies it apart from financial speculation.


Once the scaling issue is resolved, it can take it's place back as a transactional currency.  On the energy aspect, sure that is an issue that needs to be addressed.  However, as outlined above - it is being addressed in many different ways.  It's not a waste of renewable energy if that energy was being wasted anyway.  Mining operations that co-locate at the point of source can use energy that otherwise wouldn't make it's way to market.
As regards it just being financial speculation, then you will see the whole project come to an end sooner rather than later.  However, I don't agree that the only aspect to this is financial speculation.  Go back a year - there was little in the way of financial speculation (in comparison with now and the last few months).


Sunny said:


> Decentralised versus Centralised? Fine but the vast majority of the world are quiet happy with the current situation. Rightly or Wrongly.


They don't have to use it then.  However, I see flaws in the existing system.  Satoshi did - it's what lead to the bitcoin whitepaper in the first instance.  You may like the pieces of paper in your wallet being devalued through the printing of more paper but I don't. 
Other than that, there are other transactions for which bitcoin and crypto is better suited.  The remittance market.  Of late, I've had to do a number of international wire transfers - the system is (deliberately) archaic - and not customer driven.  They leave it this way to try and create a pretence for the exorbitant fees.
Although it comes with responsibility, I like the idea of having full control over my cryptocurrency as opposed to leaving it in a bank.  We came very,very close to taking a haircut with irish banks.  If they don't hold the funds, it can't happen.



Sunny said:


> There is a significant number of people who will never trust a computer over a physical note.


Yes, that may well be.  In fairness, its quite difficult for the ordinary joe to gain an understanding of how cryptocurrency works.  It will take time - and I'd imagine that's why the younger demographic have taken to crypto more than others.



Sunny said:


> You might call them stupid but that's the reality.


I'm certainly not calling them stupid.  Crypto will have to evolve so that it becomes more user friendly.  There's a whole host of work to be done in the space - so this thing is going to run on for the foreseeable in terms of development.



Sunny said:


> There isn't some huge clamour for the end of central banks.


Well, we're not talking about a complete swap out.  That's not realistic nor is it what anyone is calling for.  However, surely you see deficiencies in centralised systems?  Is it not progressive to look to improve upon existing systems?



Sunny said:


> Getting rid of intermediaWhat if my broadband was rubbish this month and I want a refund on the Direct Debit they took from me? Maybe I am just old but I really can't see why everyone is getting so excited about this apart from a speculation and novelty point of view.ries? Why?


In terms of personal banking, I wouldn't have any problem in not having an intermediary bank....if systems are developed to an extent where that became practicable.  Perhaps not for everything - but for day to day stuff.  As a case in point right now, I'm travelling overseas and will be for a prolonged period.  I'm paying through the nose bank fees in foreign exchange, ATM fees, etc.  This situation is primed for crypto ...and I'd be happy to use it once the eco-system is developed to an extent that I can.



Sunny said:


> What if I actually want an intermediary for things like trade finance, invoice discounting?


Then use them.  Nobody is naive enough to think that banking is going to be killed off.  However, some of their revenue streams may vapourise or be subject to competition.  There's nothing wrong with that.




Sunny said:


> What if my broadband was rubbish this month and I want a refund on the Direct Debit they took from me?


Pay using a bitcoin escrow service.



Sunny said:


> Maybe I am just old but I really can't see why everyone is getting so excited about this apart from a speculation and novelty point of view.


The applications have not even begun to be developed so it's hard to see it's full effects.  I'm not bothered about  'speculation' or 'novelty factor'.  I am enthusiastic about the technology itself.  Furthermore, there are applications for blockchain technology in supply chain, health care (records management and so forth), automated payments involving AI, micro-payments, land registry records, and so on.  Bitcoin covers only one area of application of the technology generally.



			
				Leo said:
			
		

> A lot less than 250kWh per transaction.


I've yet to see a fully worked calculation for traditional banking that covers ALL costs associated with same.  In any event, I think we've covered the subject...ergo..there are developments in terms of what will be the energy requirement going forward, the nature of the energy used, etc.



Gus1970 said:


> I fail to see a link between my answer and this question and I won't weigh in.


You're quite right not to weigh in!
Duke - you're doing the very same thing....you're raking over the coals, doing a reset on the discussion and going back to repeat the very same stuff.  We know what your argument is with regard to the intrinsic value of bitcoin vs. the intrinsic value of FIAT.  Isn't there a point where people respectfully disagree in a discussion rather than rehashing the same stuff...


----------



## tecate

Sunny said:


> What market demand apart from financial speculation??


Before it hit the scaling issue, bitcoin was making modest but ever increasing progress in terms of payments.  Once Layer 2 solutions are rolled out, I expect that progress to continue. 



Sunny said:


> That's fine but Bitcoin isn't the solution either. There are plenty of centralised alternatives to banks for transactions with almost zero fees if that's what people want.


Centralised systems have to be paid for somehow. Other than that, why trust another entity to hold your funds when you can do so yourself.



Sunny said:


> There are plenty of occasions when intermediaries are needed and Bitcoin will never be able to meet that need so how does bitcoin make banks obsolete as someone says above?


You're quite right - there are and you'll always have that option.  However, crypto can erode and disrupt certain revenue streams that the banks currently exploit. This isn't an all or nothing deal - both can co-exist.  By the way, when was the last time banking was disrupted?  I take it you do believe that competition is healthy?



Sunny said:


> I don't get the next bit about the next cyclic economic crash and looking for a place to store wealth? Are you suggesting that will be Bitcoin? It's a bit far fetched to claim that people are investing in Bitcoin to store and protect accumulated wealth? If they are, they are nuts....


If you're talking about volatility - then sure, bitcoin is currently volatile.  Over time, that volatility will diminish.  That said, for basket case FIAT currencies, then bitcoin is a realistic hedge despite the volatility.

One last point..  We are moving to a cashless society.  Sweden is already almost cashless.  That leaves every single transaction you ever carried out as a digital transaction through a centralised system.  Do you want every single transaction you ever made to be available to someone in an office somewhere? Everything you ever spent money on and when you spent it?  I don't but perhaps you don't care?  Fine.  What if you're in a country with political problems - and you make a contribution to a political party other than the incumbent.  They filter such transactions and target you.  That's not a system that encourages personal freedom.


----------



## jman0war

Not _everybody_ needs the censorship-resistance and seizure-resistance that Bitcoin enables, that is sure.
But some people find those things desire-able and so there is a market.

Look at a use case here that the media and banks are rather silent about:
Refugees.
Syrian, Iraqi refugees in war torn countries lose everything they previously owned.
Property gone, gold in their possession taken off them, money in banks confiscated by the regime.
When they end-up in another country they are cut-off from opening a bank account.

http://www.independent.co.uk/news/b...efugees-bank-accounts-in-britain-9655838.html
https://www.ft.com/content/a6ed6248-1915-11e6-bb7d-ee563a5a1cc1

Bitcoin provides a ready solution to this.
No ID required, no regime can confiscate it (as long as you don't give them your private key).
Imagine a future in which Refugees are able to leave war torn countries and take all their accumulated wealth with them.
This will never happen in existing banking.


----------



## elacsaplau

tecate said:


> You're quite right not to weigh in!
> Duke - you're doing the very same thing....you're raking over the coals, doing a reset on the discussion and going back to repeat the very same stuff.  We know what your argument is with regard to the intrinsic value of bitcoin vs. the intrinsic value of FIAT.  Isn't there a point where people respectfully disagree in a discussion rather than rehashing the same stuff...



I think this is fair comment.

Just to add, personally, since the early 1980s, I've never fully trusted FIAT. I had a Mirafiori - nearly broke my heart.


----------



## TheBigShort

Sunny said:


> But why would we want to? What on earth is about Bitcoin that justifies Iceland using more energy mining something like Bitcoin than it does for powering every home in the Country. Even if it renewable energy, it is still a waste. At the moment, there is no tangible use for Bitcoin that justifies it apart from financial speculation.



If it's renewable energy it's never wasted. That is the point of it. To use a crude analogy its like digging a bucket of dry sand on a beach, throwing it into the sea and saying 'that is a waste of dry sand'.
For sure, the infrastructure that harnesses and delivers the energy can come under pressure with Bitcoin mining, but resolving that is doable if it is desired.




Sunny said:


> Fine but the vast majority of the world are quiet happy with the current situation. Rightly or Wrongly.



That is probably one of the most generalised statements ever while simultaneously one of the most limited in its scope. Admirable in its own right!



Sunny said:


> There is a significant number of people who will never trust a computer over a physical note. You might call them stupid but that's the reality.



I'm of the opinion that there are no stupid people as such, just that people do stupid things to lesser and greater extents.



Sunny said:


> Getting rid of intermediaries? Why? What if I actually want an intermediary for things like trade finance, invoice discounting? What if my broadband was rubbish this month and I want a refund on the Direct Debit they took from me? Maybe I am just old but I really can't see why everyone is getting so excited about this apart from a speculation and novelty point of view.



I can't say I have a handle on the technical side of Bitcoin at all (certainly not the terminology surrounding the tech side) but I do think I understand the concept of it. Or at least, it is my concept of what it is and what it can do. Always open to persuasion that I may be wrong in that regard, but all that needs is someone to persuade me I am wrong.
On the otherhand, I don't purport to be able to convince you why you should buy Bitcoin, but rather explain why I buy Bitcoin.


----------



## Sunny

TheBigShort said:


> If it's renewable energy it's never wasted. That is the point of it. To use a crude analogy its like digging a bucket of dry sand on a beach, throwing it into the sea and saying 'that is a waste of dry sand'.
> For sure, the infrastructure that harnesses and delivers the energy can come under pressure with Bitcoin mining, but resolving that is doable if it is desired.



Eh???? Just because it is renewable doesn't mean it is free to produce. It doesn't mean there isn't an environmental cost to having to build wind farms and hydro electric facilities. It doesn't mean that there isn't a more productive use of the energy rather than having massive computers attempt to mine bitcoin....


----------



## jman0war

Amir Taaki is a particularly-strong-on-ideology Bitcoin developer.
He has returned from his excursion inside Syria and is now attempting to setup a sort of hacker/bitcoin community inside Spain.
So watch this space.

Here's an article about him from last year:
https://cointelegraph.com/news/how-...-bitcoin-economy-in-syria-while-fighting-isis


----------



## jman0war

Sunny said:


> Eh???? Just because it is renewable doesn't mean it is free to produce. It doesn't mean there isn't an environmental cost to having to build wind farms and hydro electric facilities. It doesn't mean that there isn't a more productive use of the energy rather than having massive computers attempt to mine bitcoin....


So what?
The price of bitcoin and the energy it consumes is market driven.

Q: Why should we have silly christmas lights all wasting electricity year on year?
A: Because that is what people have decided to spend it on.


----------



## Sunny

jman0war said:


> So what?
> The price of bitcoin and the energy it consumes is market driven.
> 
> Q: Why should we have silly christmas lights all wasting electricity year on year?
> A: Because that is what people have decided to spend it on.



There you go again? What market apart from financial speculation? There is no mass market of bitcoin use that justifies that level of enegy consumption apart from the fact that speculation has made it economically viable for them to do it. You make it sound like that is a good thing.


----------



## TheBigShort

Sunny said:


> It doesn't mean that there isn't a more productive use of the energy rather than having massive computers attempt to mine bitcoin....



Outside of energy used to deliver the necessities of day-to-day living, you could argue that point about practically everything.




Sunny said:


> Eh???? Just because it is renewable doesn't mean it is free to produce



I never said it would be free to produce. Clearly I said Bitcoin mining could put the infrastructure that harnesses and delivers the energy under pressure. 




Sunny said:


> It doesn't mean there isn't an environmental cost to having to build wind farms and hydro electric facilities.



True, building wind farms and hydro electric facilities may be an eye-sore, or perhaps disturb the local wildlife, or introduce some other costs. But if it can deliver energy in cleanly, and is renewable, I'm guessing the benefits to the environment will outweigh the 'costs'. 
But don't take my word for it, ask the scientists, engineers, environmentalists, investors, governments etc who are pushing this stuff.


----------



## tecate

Sunny said:


> There you go again? What market apart from financial speculation? There is no mass market of bitcoin use that justifies that level of enegy consumption apart from the fact that speculation has made it economically viable for them to do it. You make it sound like that is a good thing.


You can't just leap to 'mass market' use from a standing start - particularly when there's a scaling issue to be resolved.  Otherwise, we've already covered that energy usage and sourcing of same is being tackled in different ways ...some of which have already come to fruition others, we can expect to be in play pretty soon.


----------



## jman0war

Sunny said:


> There you go again? What market apart from financial speculation? There is no mass market of bitcoin use that justifies that level of enegy consumption apart from the fact that speculation has made it economically viable for them to do it. You make it sound like that is a good thing.


Bitcoin doesn't have to rationalize/justify it's energy use to you nor anybody.


----------



## Leo

tecate said:


> I've yet to see a fully worked calculation for traditional banking that covers ALL costs associated with same.



Same here, but I'm sure we'll all agree that per transaction energy usage is absolutely insignificant by comparison. Just running the Visa network at those rates would require much more power than current world-wide generation capacity can produce. 35x US total generation capacity.

Mining power use doesn't include all costs associated with bitcoin either, though it is likely to be the most significant component.


----------



## jman0war

Perhaps some naysayers will propose some sort of central "Department of Electricity-Use" so when one of those darn entrepreneurs want to startup a business they must submit their case to the Dept for approval.


----------



## jman0war

Leo said:


> Same here, but I'm sure we'll all agree that per transaction energy usage is absolutely insignificant by comparison. Just running the Visa network at those rates would require much more power than current world-wide generation capacity can produce. 35x US total generation capacity.
> 
> Mining power use doesn't include all costs associated with bitcoin either, though it is likely to be the most significant component.


I agree, but i think it would be almost impossible to calculate all the costs of those visa transactions.
Running and Labour costs of all those Intermediaries, specialized hardware at each till, regulation and lawyers.
It would be astronomical.


----------



## tecate

Leo said:


> Same here, but I'm sure we'll all agree that per transaction energy usage is absolutely insignificant by comparison. Just running the Visa network at those rates would require much more power than current world-wide generation capacity can produce. 35x US total generation capacity.
> 
> Mining power use doesn't include all costs associated with bitcoin either, though it is likely to be the most significant component.


Sure...I don't really want to go into all of that - firstly because we don't have all the numbers.  Secondly, it's probably just as well we don't!...or we'd be stuck down a rabbit-hole in terms of discussion. 
The bottom line is - sure, energy useage is significant but it's being dealt with in various ways.  We'll have to wait it out and see.  In the meantime, if the network supports the costs of that, so be it.  jman0war is right in his comparison re. christmas lights...if it's bought and paid for, then that's an end of it.  Those opposed to bitcoin of course believe it to be a waste - but that then routes back to the central argument about the overall value and use of bitcoin.


----------



## TheBigShort

jman0war said:


> I agree, but i think it would be almost impossible to calculate all the costs of those visa transactions.
> Running and Labour costs of all those Intermediaries, specialized hardware at each till, regulation and lawyers.
> It would be astronomical.



Construction of buildings, employees coming to work everyday, the infrastructure to support the energy supplies, the courts to resolve the disputes, the employees of the courts getting to and from work each day, the high-flying executives on transatlantic flights, the ancillary activities, from stationery supplies to fixtures and fittings, plus the knock-on activities of reporting in print media and its massive usage of paper...the employees of media getting to work everyday....the list is endless. 
In the end, all energy use is inter-connected with all other energy use in some shape or form. 
Except Bitcoin of course, the naysayers would like you to believe that Bitcoin energy use operates in its own vacuum.


----------



## jman0war

I think the "cost per transaction" as presented, is really just capturing the tiniest tip of the iceberg within Visa's network.
Yet that same "cost per transaction" calculation comprises a huge percentage of bitcoin's network usage.

It's really comparing a snipet of a centralized, 3rd party trust-based system; with a decentralized trust-less system based on code and math.
Vastly, vastly different architectures.


----------



## jman0war

TheBigShort, let's not forget all the attendant harvesting of identity data, that the existing banking systems perform via such networks as Visa.

That nugget itself opens a massive door of data collection businesses which are then monetized and sold off to all sorts of other companies, which then target those identies with marketing emails and physical junk mail.
It's an absolute dystopia in the US.
People end up buying services to try and stop the junk mail from arriving to their post boxes.


----------



## Leo

jman0war said:


> I agree, but i think it would be almost impossible to calculate all the costs of those visa transactions.
> Running and Labour costs of all those Intermediaries, specialized hardware at each till, regulation and lawyers.
> It would be astronomical.



It might be difficult, but it's certainly possible and you can be sure every major financial institution has a very good handle on it. For example, credit card processing fees are higher than many other transaction fees, and it's clear that those 1-2% fees cover all downstream costs. If they didn't Visa wouldn't be reporting $6.7B net profit on $18.36B revenue.


----------



## Leo

jman0war said:


> It's an absolutely dystopia in the US.
> People end up buying services to try and stop the junk mail from arriving to their post boxes.



It really isn't, unless you overlook the obvious 'tick this box to opt out of marketing' on credit application forms. Failing that the Direct Marketing Association registry is pretty effective, even if they're not the most popular in all circles as they charge a $2 fee for 10 years coverage. Credit card companies are required by law to make it clear what they do with any data collected.


----------



## jman0war

Leo said:


> It might be difficult, but it's certainly possible and you can be sure every major financial institution has a very good handle on it. For example, credit card processing fees are higher than many other transaction fees, and it's clear that those 1-2% fees cover all downstream costs. If they didn't Visa wouldn't be reporting $6.7B net profit on $18.36B revenue.


I doubt it.
I would guess that they are very good at off-loading those costs to others.


----------



## jman0war

Visa is probably very adept at navigating the world of international finance with a view toward minimizing it's exposure to taxes, as well as reporting requirements.
According to wikipedia it doesn't sound like the cost of visa transactions would be captured in their profit and revenue statistics:

_ It facilitates electronic funds transfers throughout the world, most commonly through Visa-branded credit cards, gift cards, and debit cards.[4] Visa does not issue cards, extend credit or set rates and fees for consumers; rather, Visa provides financial institutions with Visa-branded payment products that they then use to offer credit, debit, prepaid and cash-access programs to their customers._


----------



## Leo

jman0war said:


> According to wikipedia it doesn't sound like the cost of visa transactions would be captured in their profit and revenue statistics



Which is why I said that they are covered in the transaction charge. To suggest otherwise would imply Visa or the downstream processing institutions are running the service at a loss. I don't believe any of these institutions are so charitably inclined.

The company I work for aren't publicly traded, so accounts aren't as scrutinised as would be the case for those, but we know the per transaction cost of running every application and service, right down to electricity costs per core. That data drives business decisions like where we relocated a significant data center in part to avail of lower electricity costs.


----------



## jman0war

Imagine someone today proposed a new point-of-sale payment system and terminal, that would require specialized hardware at a cost of $200 per machine, to be installed at every single til in every shop,newsagent,pub,grocer,hotel etc across 120 countries.

How much would that total? 
Hundreds of millions?
A billion?

Not included is the required dedicated phone line rental.
Costs to be paid by merchant.


----------



## Leo

jman0war said:


> Imagine someone today proposed a new point-of-sale payment system and terminal, that would require specialized hardware at a cost of $200 per machine, to be installed at every single til in every shop,newsagent,pub,grocer,hotel etc across 120 countries.


0
A lot of card machines actually cost more than that at the moment, many companies will lease these (~€20 a month, but varies depending on scale). So I'm sure many people would love to see these cheaper machines, so long of course that these machines don't stop them processing hundreds or even thousands of transactions per day within seconds.



jman0war said:


> How much would that total?
> Hundreds of millions?
> A billion?



It'd have to be less than 2% per transaction to have any hopes of competing. 



jman0war said:


> Not included is the required dedicated phone line rental.
> Costs to be paid by merchant.



Modern POS system have moved away from dedicated phones lines since the days of dial-up!
Obviously, as with all current POS equipment and related expenses, all costs are paid for by the consumer. The same is the case with crypto, which is why it's vital that transaction costs are addressed for widespread adoption to become a possibility.


----------



## jman0war

Leo said:


> Modern POS system have moved away from dedicated phones lines since the days of dial-up!


Are you sure about that? I'm guessing that dedicated analogue phone line connections are probably more common than it's assumed.

All of the models of the swipe card machines on this supplier offer Dial-up as a connection media.
https://www.merchantequip.com/processing-equipment/credit-card-terminals/

From their FAQ:
Can I process over my IP connection?
Many merchants have broadband connections for their business and would like to utilize this connection for their credit card processing. The terminals that we offer for use with this type of connection are the Omni 3740 and the Omni 3750 with the ethernet adapter. PC Charge can also be used through a broadband connection, in conjunction with a PC card swiper. Either of these options will provide a lightning fast method for processing your electronic transactions.
*Currently there aren't any terminals that can process through any type of connection other than an analog phone line, except the Omni 3740 and Omni 3750.*
https://www.merchantequip.com/information-center/processing-faq/process-over-ip/



> Obviously, as with all current POS equipment and related expenses, all costs are paid for by the consumer. The same is the case with crypto, which is why it's vital that transaction costs are addressed for widespread adoption to become a possibility.


But yes i agree overall that the cost per transaction will have to be improved in crypto.
Which is why Layer2 solutions like Lightning Network are under development.


----------



## jman0war

> What Kind of Phone Lines Are Needed for Credit Card Machines?
> 
> If you're considering the installation of a credit card machine, you need to know what other equipment you need in addition to the device itself. Credit card machines communicate with banks and card companies using phone lines. You must ensure you have a dedicated, secure landline for your card machine before you can start accepting credit and debit card payments.
> 
> As a merchant, you can purchase three different types of terminal: IP-based, wireless or dial-up.
> 
> The three terminal types have different phone-line requirements. A dial-up machine requires a landline phone connection. This type of machine usually costs less than the other types, and it is used in small to medium-sized businesses. IP-based machines operate using the company's Internet connection, which usually requires a working landline phone line. The only type of machine that doesn't require a phone line is a wireless terminal. A wireless terminal operates on the same wireless network as a cell phone to transmit data.


 http://smallbusiness.chron.com/kind-phone-lines-needed-credit-card-machines-34484.html

I don't know, maybe wireless terminals are more common today than phone lines, but i worked at a Bank during the crisis and they had a lot of legacy hardware in production environments. Would not surprise me to find that the analogue phone lines are still the most common transfer method for credit card processing.


----------



## Leo

No busy retail outlet will want to be on the older dial terminals as transactions take up to 7-8 seconds longer than IP. Some vendors are offering 3/4G terminals now. With some of the terminals you can see on the user screen if it's doing a dial-up.

Ah, it's going back a few years now but I was involved in a project for one of the main Irish banks replacing a customer facing system. This shiny new app was screen scraping 3270 terminals for the back-end data


----------



## jman0war

Bitcoin and cryto classes now a fundamental part of Finance courses in some Chicago uni's.
More on the way.



> Digital currency is now part of the classes’ discussions surrounding the definition of money, a core concept in courses that cover money, banking and capital markets. “My students are starting the class thinking about it now,” Black said.
> 
> Just as bitcoin has infiltrated conversations, headlines and financial exchanges, lessons on the digital currency and its underlying technology are springing up in university classrooms around Illinois. Some professors are altering lesson plans that before just grazed the subject, while some schools are adding entire bitcoin and blockchain classes to their course lists.


----------



## Brendan Burgess

Hi jman

I contacted a few lecturers and told them that this was a once in a lifetime opportunity to study a clearly identifiable bubble during the bubble phase and totally irrational behaviour by otherwise clever people.  But the reaction seemed to be "Well our course for the year is set".

I am glad to see a few other academics recognise the opportunity. 

The problem I face of how to profit from a bubble through spread betting or shorting would be very interesting.  And the question I have asked in another thread "What is the right price to cash out at?" It is a really tricky problem of risk vs. reward - when you know something will go to zero, how do you profit by it without getting wiped out by a huge rise in the meantime? 

These are theoretical most of the time, but there is a real live experiment underway at the moment. 

Brendan


----------



## Duke of Marmalade

jman0war said:


> Bitcoin and cryto classes now a fundamental part of Finance courses in some Chicago uni's.
> More on the way.


So?  Academia is like everything else in America, heavily commercialised.  In the competition for students a bit of crypto could be a big marketing gimmick, there are probably even those who think a course in crypto is a shortcut to vast riches.  There are whole universities in America devoted to Astrology.


----------



## TheBigShort

Brendan Burgess said:


> "What is the right price to cash out at?" It is a really tricky problem of risk vs. reward - when you know something will go to zero, how do you profit by it without getting wiped out by a huge rise in the meantime?



Nothing tricky about it all Brendan, since you have asked the question here is two bits of my advice, take it or leave it - 1) if you are concerned about the real possibility of being wiped out, then cash out your profit now. Because;
2) declaring you 'know' something will go to zero but dont know when, is as about as useful as everyone knowing they will die but not knowing when. 
What is the point of 'knowing' that something will return to zero if you have not a clue when that is likely to occur? 

I suggest you follow your own advice that you offer for holders of bitcoin, and cash out now while there is profit.


----------



## TheBigShort

Duke of Marmalade said:


> ? Academia is like everything else in America, heavily commercialised. In the competition for students a bit of crypto could be a big marketing gimmick, there are probably even those who think a course in crypto is a shortcut to vast riches. There are whole universities in America devoted to Astrology.



You could right in fairness, perhaps its just a fund raising gimmick to sell lecture time and make a few bob.
But of all the target audiences they target - academic students studying business!
I dont know about you, but im guessing somewhere along the line either a professor or a student with similar insights as yourself would call this bitcoin stuff out for what it is? 
Surely some of them share your views?


----------



## TheBigShort

Brendan Burgess said:


> I contacted a few lecturers and told them that this was a once in a lifetime opportunity to study a clearly identifiable bubble during the bubble phase and totally irrational behaviour by otherwise clever people. But the reaction seemed to be "Well our course for the year is set".



You couldnt convince them then? 
Perhaps they already own bitcoin so not in their interest? 
Perhaps the Irish housing bubble is part of the syllabus? Making the pitch of 'once in a lifetime' sound somewhat Del-boyish?


----------



## jman0war

Duke of Marmalade said:


> So?  Academia is like everything else in America, heavily commercialised.  In the competition for students a bit of crypto could be a big marketing gimmick, there are probably even those who think a course in crypto is a shortcut to vast riches.  There are whole universities in America devoted to Astrology.


Well reputed big, State Universities are not the same as tiny, private, niche ones.

It means that the generation of people coming up through uni today are re-thinking Money, and are into crypto.
My other half processes financial declarations of investors and reports that most people under 25 are listing crypto holdings among their assets.
Starkly contrasted with middle aged ones that don't own any, or don't declare.

There is a generational paradigm shift occuring; try not to get left behind.


----------



## Brendan Burgess

jman0war said:


> most people under 25 are listing crypto holdings among their assets.
> Starkly contrasted with middle aged ones that don't own any



Would you not learn any lesson from that? People with years of experience investing, who have seen fads and bubbles are not buying into this nonsense, whereas people with very limited experience are buying it.


----------



## Brendan Burgess

jman0war said:


> There is a generational paradigm shift occuring; try not to get left behind.



Did you copy that from a discussion on the dot.com bubble?  That's what we were all told then. 

Brendan


----------



## Sunny

jman0war said:


> Well reputed big, State Universities are not the same as tiny, private, niche ones.
> 
> It means that the generation of people coming up through uni today are re-thinking Money, and are into crypto.
> My other half processes financial declarations of investors and reports that most people under 25 are listing crypto holdings among their assets.
> Starkly contrasted with middle aged ones that don't own any, or don't declare.
> 
> There is a generational paradigm shift occuring; try not to get left behind.



WOW! A generational paradigm shift with crypto currencies? That is the most extravagant claim yet. *Most* people under 25 are holding crypto currencies??? Really standing by that claim??


----------



## newirishman

jman0war said:


> My other half processes financial declarations of investors and reports that most people under 25 are listing crypto holdings among their assets.



Society and live must have really changed in the last 20 years if most people under 25 actually have *any* assets to speak of.
Most under-25's I know are busy spending their entry-level salaries on paying back student loans, rent, and whatever is left afterwards, booze.


----------



## TheBigShort

Brendan Burgess said:


> Would you not learn any lesson from that? People with years of experience investing, who have seen fads and bubbles are not buying into this nonsense, whereas people with very limited experience are buying it.



Is that what drove the dot.com bubble? Inexperienced investors?


----------



## Duke of Marmalade

jman0war said:


> There is a generational paradigm shift occuring


Ahh, so that explains why the Nobel Prize winners and all mainstream economic commentators have rubbished bitcoin.


----------



## newirishman

TheBigShort said:


> Is that what drove the dot.com bubble? Inexperienced investors?



That is pretty much true. As you will find, most (all?) bubbles are driven by inexperienced investors. Also known as the "greater fool" theory.

Warren Buffet, arguably somebody who clearly is not an inexperienced investor, did for example not buy into the dot com bubble.





> *Buffett suffered a 49% loss from Jun 1998 to Mar 2000. At the same time, the NASDAQ rose 140% and SP500 rose 28%. Despite heavy losses and public ridicule, Buffett stuck to his guns and wouldn’t touch internet stocks. Buffett’s ability to stay disciplined might be more admirable than his analytical skill.*
> At the time, I’m sure people were wondering if Buffett had lost his golden touch or if he would ever outperform the market again. A near 50% loss for a stocks investor during the biggest bull market in history doesn’t inspire confidence.* But he had the last laugh after the bubble burst, gaining 80% over the next two years while the NASDAQ lost 72% and SP500 lost 28%.*


----------



## jman0war

Sunny said:


> *Most* people under 25 are holding crypto currencies??? Really standing by that claim??


That's not my claim, stop attempting to put words in my mouth.


----------



## PMU

Brendan Burgess said:


> I contacted a few lecturers and told them that this was a once in a lifetime opportunity to study a clearly identifiable bubble during the bubble phase and totally irrational behaviour by otherwise clever people.  But the reaction seemed to be "Well our course for the year is set".  I am glad to see a few other academics recognise the opportunity.


I doubt there is much here for academics.  Saying certain assets are in a 'bubble' is just an emotional statement, usually said after the fact. There is no standard model or framework, that I am aware of, that can be applied generally to asset prices to determine if the asset is or is not in a 'bubble'. There is no model you could have applied to Internet stocks in the dot.com bubble, i.e. from 1997 to 2001, to determine if they were in a bubble and then applied the same model to Irish property prices to 2006, and at that time determined whether or not a bubble existed. Similarly, when Irish property prices bottomed out in 2009 and 2010, and the Nasdaq in 2002 – 03, did a 'negative bubble' exist, or are bubbles a perceived 'high price' phenomena only? And if so why? Paul Samuelson said that bubbles occur when the efficient market hypothesis breaks down, but why should this occur?  From this, if a definition of a 'bubble' doesn't take EMH into account it's lacking a theoretical foundation. So you can see why this is a path few lecturers would gladly go down.


----------



## TheBigShort

newirishman said:


> That is pretty much true. As you will find, most (all?) bubbles are driven by inexperienced investors.



This is a complete fallacy. The notion that inexperienced investors, in the main, can drive a bubble is simply not true.
Take the Irish property bubble for instance, and the associated bank failures, bank bailouts, high profile developers and investors who all got stung, badly. 
All of whom were experienced in their respective fields. 
Inexperienced U25's are not capable of driving a bubble, the market value of which stands around $250bn...where would they get that capital from?


----------



## Sunny

jman0war said:


> Well reputed big, State Universities are not the same as tiny, private, niche ones.
> 
> It means that the generation of people coming up through uni today are re-thinking Money, and are into crypto.
> My other half processes financial declarations of investors and reports *that most people under 25 are listing crypto holdings among their assets*.
> Starkly contrasted with middle aged ones that don't own any, or don't declare.
> 
> There is a generational paradigm shift occuring; try not to get left behind.





jman0war said:


> That's not my claim, stop attempting to put words in my mouth.



Where did I put words in your mouth?


----------



## jman0war

Sunny said:


> Where did I put words in your mouth?


Your reading comprehension is poor.
My other half processes financial declarations of investors, and reports that most people under 25 list crypto.

Do you believe that all 25 year olds are investors?
And of those investors, all of their financial declarations actually cross my wife's desk?


----------



## Sunny

jman0war said:


> Your reading comprehension is poor.
> My other half processes financial declarations of investors, and reports that most people under 25 list crypto.
> 
> Do you believe that all 25 year olds are investors?
> And of those investors, all of their financial declarations actually cross my wife's desk?



Right so you are now talking about generational paradigm shifts based on paperwork that crosses your wife’s desk. Really useful contribution. Thanks for that.


----------



## jman0war

I just don't understand that someone could interpret that sentence to mean all 25 yr olds?

Did you really have in mind that all people aged 25 and younger across the globe are investors, or just all of them in a sub-set of countries?
Perhaps only a single country?


----------



## Gus1970

Brendan Burgess said:


> Would you not learn any lesson from that? People with years of experience investing, who have seen fads and bubbles are not buying into this nonsense, whereas people with very limited experience are buying it.



Did the experienced investors ever get it wrong? History tells us that many experienced investors thought that electricity was a fad, the internet was a fad, mobile phones were one too.

To be able to imagine the impact that bitcoin could potentially have on our society, we need to start with an open mind.

I would really hope that the conversation went towards mutual exploration, rather than reiterating entrenched positions and protecting the egos.
I know that i don't know what will happen with bitcoin in the future. I know a lot about it's underlying technology and its rules.

Nobody can predict the future, some of us want to build a better one


----------



## Duke of Marmalade

Gus1970 said:


> Nobody can predict the future, some of us want to build a better one


The bitcoin crusade for a better future  This is becoming farcical.  

If bitcoin ever were to gain traction as a currency it could have serious implications for the sound management of our economies and would be far from a better future.  However, the prospect does not keep me wake nights because (a) bitcoin is a nonsense and I trust even the upcoming generation to realise that and (b) if a significant minority do start to undermine our monetary system the demographic will of the majority will stamp out the madness.  The third possibility, that a majority of folk buy into the nonsense I dismiss as having negligible probability.


----------



## TheBigShort

Duke of Marmalade said:


> Ahh, so that explains why the Nobel Prize winners and all mainstream economic commentators have rubbished bitcoin.



Thats a bit of a stretch. For sure, many are pointing to the bitcoin 'bubble', but that does not equate to rubbishing it. 
When the likes of Stiglitz calls for it to be regulated in order to put it out of existence, without actually explaining how it is to be regulated, then it doesnt take much to consider that he may be behind the curve on this one.


----------



## Sunny

You just don’t get it Duke because you are over 25 and not part of the generational paradigm shift. Apparently somebody’s wife looks at a load of paper work and most of those people under 25 have crypto currency listed as an asset. while most over the age of 25 don’t or at least don’t declare it. Might as well give up and start buying. I don’t want to miss out. That’s before we even start about helping to make the world a better place. Because there are starving people all the world dreaming of decentralized money system.


----------



## TheBigShort

Sunny said:


> Because there are starving people all the world dreaming of decentralized money system.



Probably not, just any form of money will suffice...they'll be waiting, as they always have under this monetary system.


----------



## Brendan Burgess

Sunny said:


> Apparently somebody’s wife looks at a load of paper work



This comment could replace the "It's time to sell when the shoe shine boy is buying stocks" story.

Brendan


----------



## TheBigShort

Brendan Burgess said:


> This comment could replace the "It's time to sell when the shoe shine boy is buying stocks" story.
> 
> Brendan



It doesnt really correlate. Firstly there appears to be a misunderstanding of that phrase. My understanding is not that the shoe shine boy is buying stocks (all the more power to him if he is) but that he is giving advice on which stocks to buy.
Its the advice that acts as a warning signal. That if the shoe shine boy is giving tips, how did he come about this? And if the shoe shine boy is advising to buy stocks then who else is doing it - everybody?

On the otherhand a person working in a position that allows access to the type of information that is not ordinarily available to others could possibly be quite valuable.

No different to the bank clerk processing mortgage applications can at least gauge whether an increase in such applications may result in increasing prices.

Or anybody else, for that matter, working in any particular industry who has information available to them relating to that particular business or industry.

Its up to everyone else how to decipher that information. The shoe shine boy's business is shining shoes, not stock market advice. Someone who is in a position to observe the financial declarations of investors is in a position to at least make an observation. How valid or relevant that observation is for everyone else to decide for themselves. But to dismiss it out of hand is folly.


----------



## Duke of Marmalade

We must presume that _jwoman _is referencing a reasonably significant statistical sample.  Let's say of 100 under 25s she has seen 80 with cryptos and of a similar number, 100, of middle aged folk she has seen abolutely 0 declared cryptos.

That would certainly be _prime facie_ evidence of an interesting generational phenomenon, definitely worthy of academic study.
_
jman _interprets it as a sign of the future to come.  But it also reminds me that the bulk of under 25s are rabid lefties whilst the bulk of middle aged folk are centre or centre right and moreover they were themselves long haired lefties when they were once young.  Age does bring wisdom IMHO.  Maybe crypto is a phase which modern man and woman just have to go through.

On the other hand I chat to the friends of the earls, some of whom have silly paid jobs in the City of London, and every one of them is even more anti crypto than the duke.

So maybe _jwoman _could provide a little more statistical background to help us understand her quite remarkable empirical observation.


----------



## TheBigShort

Duke of Marmalade said:


> So maybe _jwoman _could provide a little more statistical background to help us understand her quite remarkable empirical observation.



Certainly as it stands, the information is nothing more than hearsay and for me, wholly insufficient to act upon one way or another. 
Nevertheless, it is an observation, if combined with other information pertinent to the crypto space, could at a minimum instigate some to look further into this area. Notwithstanding of course, that anyone doing so may still conclude that it is a waste of time. 
But it differs from the shoeshine boy giving advice on stock picks insofar as it is information that purports to come from a person in a position to be able to make that observation.


----------



## jman0war

Incidently while i worked in an entry level position in the mid 90's at a very large telecommunications company, my co-workers and I observed a rather clear shift.
In 94 and 95 we were busy processing new applications to provision (setup) websites for companies.
In 96 and 97 we were busy processing disconnect / take-down requests for websites.

The change in direction was obvious to us as we had access to that information, the general public didn't know the volume.
We did not know however, if the take-down was a permanent move off the web by that company, or was the company just moving web hosting to another provider.
Unless they hosted their DNS with us anyway.


----------



## jman0war

The information about websites setup vs takedowns that was available to me probably could have been useful for anybody looking to spot macro trends regarding web hosting (dotcom bubble).
I wasn't particularly interested in any of it, other than domain name squatting.
And most of my co-workers and I just assumed that companies were abandoning the hosting solutions provided by our employer for a better deal elsewhere.
Web hosting was an increasingly competitive space.


----------



## TheBigShort

Exactly the point jman0war.

I get the sense that some posters only believe a change is occurring if it comes from some official source or has some mathematical equation to identify and back it up. These things have value, but in my opinion tend generally to be behind the curve.
Certainly, when I first bought some bitcoin I was as skeptical as anyone here about the whole thing. But now that I have bought and sold and transferred it, I can see clearly its potential to be used as a currency.
That said, its not without its difficulties and how this all ends up remains to be seen. Some say it will go to zero, others to $100,000. I not sure of either. But I would factor in one thing, that the way we will be transacting with each other in financial terms looks set to be something quite different as to the way we transact today in the not too distant future.
Exciting times ahead I would say.


----------



## jman0war

I have a hunch the same posters that appear to be clueless regarding crypto are similarly clueless that young people such as today's teens, aren't into Facebook; and that this generational divide is going to carry some serious implications for that company.


----------



## jman0war

I found this article rather telling.

The Bank of International Settlements (BIS) expresses some concern over central banks issuance of digital currency (CBDC).
Essentially, if Central Banks issue their own cryto, they are worried that punters will be able to transfer money out of their local banks and into say, a larger one like the Central Bank really quickly, facilitating 'bank runs'.



> In sum, the BIS noted that a currency of that nature "might be useful for payments but more work is needed to assess the full potential."
> 
> "A general purpose CBDC could give rise to higher instability of commercial bank deposit funding. Even if designed primarily with payment purposes in mind, in periods of stress a flight towards the central bank may occur on a fast and large scale, challenging commercial banks and the central bank to manage such situations," the BIS stated at the outset.
> 
> Later on, the report's authors revisited the subject, outlining a hypothetical situation in which banks - even stronger ones - could face issues during a bank run thanks to the ease at which a depositor could move their funds by way of the digital currency.
> 
> The report explains:
> "Depending on the context, the shift in deposits could be large in times of stress. A crucial element in such system-wide shifts is the stronger sensitivity of depositors to the actions of others. The more other depositors run from weaker banks, the greater the incentive to run oneself. If CBDC were available, the incentives to run could be sharper and more pervasive than today, as the CBDC would be the favoured destination, especially if deposits were not insured in the first place or deposit insurance was (made more) limited. Whereas weaker banks could experience a run, even stronger banks could face withdrawals in the presence of CBDC."
> "It would be difficult to stem runs under such conditions, even when providing large lender of last resort facilities," the report adds.


https://www.coindesk.com/central-bank-digital-currencies-fuel-bank-runs-bis-says/

It's like an acknowlegement that they are concerned people will have too easy,too immediate access to their money and too much freedom to move it.

It's basically almost revealing that part of the current commercial banks business model is put the brakes on your access to your money.
These feet-dragging institutions are ripe for some digital disruption.


----------



## Brendan Burgess

jman0war said:


> I have a hunch



If you are planning your finances seriously, you should do so based on analysis not hunches, magical thinking, or anecdotes from your wife. 

Bitcoin is a bag of hot air, fairy dust, whatever. 

You have been told this on numerous occasions, yet not one of the faithful has yet come up with any basis for a valuation above zero.  

No one has explained why its price went from $1,000 to $20,000 in a year. 

There is no basis for it to have any value above zero. So you can only rely on magical thinking supported by your wife's anecdotes and, now, the demise of Facebook.  Discussing it with you is like talking to flat earthers.  They are fully convinced that the round earth theory is a conspiracy and they have all the stories and arguments to support them. 

Check out how reasonable this guy sounds: https://www.youtube.com/watch?v=pYcnLj8suLw

Brendan


----------



## Sunny

TheBigShort said:


> But now that I have bought and sold and transferred it, I can see clearly its potential to be used as a currency.
> That said, its not without its difficulties and how this all ends up remains to be seen. Some say it will go to zero, others to $100,000. I not sure of either. But I would factor in one thing, that the way we will be transacting with each other in financial terms looks set to be something quite different as to the way we transact today in the not too distant future.
> Exciting times ahead I would say.



But that is exactly the point. How can Bitcoin ever be a currency if you don't know if it will be worth zero or $100,000. That's not a small range. Never mind the technology but until you can stop the speculating and the noise and the hype around it, it will never be used as a currency because it is.

As for the future and how we transact with each other being different, well that is hardly a big call. There are already numerous non-traditional banking ways of transferring money and paying for things with almost zero transaction fees. This is very different to the vision that people have of Bitcoin replacing the world's currencies or of blockchain technology changing the world.


----------



## TheBigShort

jman0war said:


> I have a hunch the same posters that appear to be clueless regarding crypto are similarly clueless that young people such as today's teens, aren't into Facebook; and that this generational divide is going to carry some serious implications for that company.



My eldest is only 11. The words 'Facebook' and 'Boring!' are synonymous with each other in his mind.


----------



## Sunny

jman0war said:


> I have a hunch the same posters that appear to be clueless regarding crypto are similarly clueless that young people such as today's teens, aren't into Facebook; and that this generational divide is going to carry some serious implications for that company.



Don't need to be young to not be "into" Facebook.


----------



## Sunny

jman0war said:


> I found this article rather telling.
> 
> The Bank of International Settlements (BIS) expresses some concern over central banks issuance of digital currency (CBDC).
> Essentially, if Central Banks issue their own cryto, they are worried that punters will be able to transfer money out of their local banks and into say, a larger one like the Central Bank really quickly, facilitating 'bank runs'.



That's not what they are saying. Tell me one central bank that takes deposits from individuals or 'punters'?


----------



## jman0war

Brendan Burgess said:


> If you are planning your finances seriously, you should do so based on analysis not hunches, magical thinking, or anecdotes from your wife.
> 
> Bitcoin is a bag of hot air, fairy dust, whatever.
> 
> You have been told this on numerous occasions, yet not one of the faithful has yet come up with any basis for a valuation above zero.
> 
> No one has explained why its price went from $1,000 to $20,000 in a year.
> 
> There is no basis for it to have any value above zero. So you can only rely on magical thinking supported by your wife's anecdotes and, now, the demise of Facebook.  Discussing it with you is like talking to flat earthers.  They are fully convinced that the round earth theory is a conspiracy and they have all the stories and arguments to support them.
> 
> Check out how reasonable this guy sounds: https://www.youtube.com/watch?v=pYcnLj8suLw
> 
> Brendan


Brendan i have on more than one occassion presented to you why anything including Bitcoin has value.
It's called "Subjective Theory of Value".
You on the other hand, have repeatedly refused to offer any sort of theory or reasonings behind your valuation.


----------



## TheBigShort

Sunny said:


> But that is exactly the point. How can Bitcoin ever be a currency if you don't know if it will be worth zero or $100,000. That's not a small range. Never mind the technology but until you can stop the speculating and the noise and the hype around it, it will never be used as a currency because it is.



That's a fair point, granted. There is a lot of noise at both ends, at the zero end and at the €100,000 end. But I'm referring to its _potential_



Sunny said:


> As for the future and how we transact with each other being different, well that is hardly a big call. There are already numerous non-traditional banking ways of transferring money and paying for things with almost zero transaction fees. This is very different to the vision that people have of Bitcoin replacing the world's currencies or of blockchain technology changing the world.



Non-traditional ways banking ways that are using the banking infrastructure as a trusted system? Would that be fair?

The purpose or use for bitcoin in my opinion is its potential to hold my money outside of this system. Not all of my money, not today anyway, but the having the option to do so is a great idea imo.
Granted, it has a long, long way to go if ever, to achieve this. But ultimately I think the concept has now been bedded and is more likely, than not, to gain traction. If that occurs, it may be through bitcoin, or some other crypto, we will have to wait and see.


----------



## TheBigShort

Brendan Burgess said:


> If you are planning your finances seriously, you should do so based on analysis not hunches, magical thinking, or anecdotes from your wife.



But you have taken out a short bet on bitcoin? You have even put a stop-loss on its price rising way above where it is now? What analysis did you use to choose the stop-loss limit that you did - or is it just a hunch you have?


----------



## TheBigShort

https://www.rte.ie/news/2018/0313/946993-bis_crypto-currency_warning/

RTE is covering the BIS/crypto story here.

_"The world's top central banking body has said that the creation of crypto-currencies, such as bitcoin, by central banks could revolutionise the global financial system."_


----------



## jman0war

Sunny said:


> That's not what they are saying. Tell me one central bank that takes deposits from individuals or 'punters'?


Whether punters move their digital funds from their local bank, into a Central Bank or just into to a larger commerical bank, the net result remains the same.

There are other articles in the recent past that have mentioned Central Banks issuing digital currency that could result in Central Banks also holding deposits and basically taking over some of the roles of commercial banks handle today.

Cut out the middle-men if they aren't doing anything useful.


----------



## Brendan Burgess

TheBigShort said:


> What analysis did you use to choose the stop-loss limit that you did



Hi Shortie

Bitcoin is worth nothing. A bag of air is worth nothing.  Fairy dust is worth nothing. If you want to argue that Bitcoin is worth €x, you have to show some analysis to support that value.  I can't prove a negative. I can't prove that a bag of air is worth nothing.  Someone who asserts that it is worth something, has to do that. 

I chose my stop-loss limit purely on the basis of what I am prepared to lose.  Bitcoin is worth nothing and that is its potential.  Unfortunately, there are enough faithful out there that they might push the price up to more than I can afford to lose. That is how I chose my stop-loss limit.

Brendan


----------



## jman0war

A bag of air can be worth absolutely everything if you're underwater.


----------



## TheBigShort

Brendan Burgess said:


> If you want to argue that Bitcoin is worth €x, you have to show some analysis to support that value



Plenty of posters have given you lots of detail as to why they believe bitcoin has value. You are not convinced and as such you value it at zero.
Plenty of posters can give me lots of detail as to why gold is valued at $1,300 today. That does not stop me from considering those reasons and thinking that it is under-priced or over-priced, or even that is has had its day and only holds token value now.
Value is subjective, in the eye of the buyer and seller.

You appear to be making the mistake of comparing bitcoin to a profit producing asset, it is not.
There is a high amount of speculation attached to it no doubt, but ditto Bransons Virgin Galaxy, Elon Musks Space X or Solar City, or the Mars One project. All of these projects are high risk, highly speculative and with a lot of money invested in them and non-profit making. Why would anyone back them? There is no guarantee that any profit will ever be made from these projects.

Are they worthless?

Hardly, something good might come out of them? Is that a possibility? Perhaps not what they originally hoped for, but its possible that new concepts, new boundaries of aviation science and space science are being tested here, leading to future projects that will hold value.

Is it possible that the bitcoin concept has the possibility to disrupt, or to provide an alternative to the current monetary system? If you think yes, like I do, then that has value.


----------



## Brendan Burgess

TheBigShort said:


> Why would anyone back them? There is no guarantee that any profit will ever be made from these projects.
> 
> Are they worthless?



People invest in them because they think that they will get a return on their money. They expect those projects to make profits. There is no such expectation in Bitcoin.  You are prepared to pay $8,000 for it only because you believe a "bigger fool" will be prepared to pay you more in the future. 


There are some reasons for spending money when you don't expect a return:
1) A vanity project
2) A worthwhile service to humanity 

But these are spending and not investment.

Brendan


----------



## TheBigShort

Brendan Burgess said:


> People invest in them because they think that they will get a return on their money.



Not always the case. These are highly speculative projects and anyone investing in them will be aware that there is a good chance they wont make a return.
However there is also a sense of being part of something that may produce breakthroughs in science and engineering, that may ultimately transform the way we live. Being part of that holds value.
Investing time and money does not always have to equate to profit. That is why a 'worthwhile service to humanity' can also be an investment, even if it costs you financially.


----------



## jman0war

Owning Bitcoin is claiming a stake in that open source project.
There are no promises of dividends or profit-making made to anyone.

Let's just see where this technology goes and how it progresses.

The fact that regulators, G20 leaders and the Bank for International Settlements (BIS) are talking about it means it's disrupting them.
Or at minimum they recognize the potential disruption and are reaching for the panic button.


----------



## Duke of Marmalade

jman0war said:


> There are other articles in the recent past that have mentioned Central Banks issuing digital currency that could result in Central Banks also holding deposits and basically taking over some of the roles of commercial banks handle today.
> 
> Cut out the middle-men if they aren't doing anything useful.


How many times has it to be emphasised that there is a complete disconnect between blockchain technology and the bitcoin it transfers.  These Central Bank mutterings are about using blockchain to speed up international transfers of securities.  They are not about issuing a new currency.  Transactions will still be in Fiat.  In fact if it was a new currency sponsored by Central Banks that would be anathema to the disciples of Shortie Syndrome.

So to repeat earlier comments, if the Fed do enable blockchain transfers of $ it will have no impact whatsoever on the value of the $.  Bitcoin is a nothing safely transferable by blockchain technology.  Wherefore does that give bitcoin an exchange rate of $20,000 or $10,000 or $1,000 or anything at all.


----------



## jman0war

Actually Duke, we don't know.
BIS could just as well use a blockchain-based digital currency of their own, modeled exactly like Bitcoin.
Perhaps pegged to the US dollar if that makes you feel better about it.

_
Away from the public eye, change may also be happening and perhaps sooner. The BIS report canvasses a second, complementary, model of CBDCs (Central Bank Digital Currency) aimed at financial institutions that would build on the blockchain technologies underlying bitcoin. Such tokenised forms of digital central bank money could potentially help streamline many of the cumbersome clearing and settlement processes that are currently needed to complete securities and foreign exchange trades. So far, however, central bank experiments with such forms of CBDCs have not shown conclusive benefits for wholesale payments and beyond, but technology and design are evolving quickly._
https://www.bis.org/review/r180313a.htm

_*A general purpose CBDC *could have wide-ranging implications for banks and the financial system.
_
General purpose 'Central Bank Digital Currency'?
If it were a USD, why wouldn't they just call it an eDollar or something.


----------



## jman0war

This central bankers speech is quite interesting.
It's from the Vice Governor of the Czech National Bank, speaking to BIS (a cartel, i mean, an organization of central bankers).

He discusses what's driving central banks issuance of digital money and then gets into some scenarios.

_But instead, I will stress - and this is my point today - the positive philosophical influence of bitcoin on the conservative world of central banking. True, it is far from clear that anytime soon a full-fledged digital currency (be it blockchain based or not) will be created by a central bank (some of you may be following the debate in the Riksbank in Sweden), but the last three years have seen an explosion of research on this idea in many central banks. Bitcoin must be credited for this powerful intellectual stimulus. When so many professors at the most esteemed universities of the developed world are not thinking about potential reforms of the current monetary order, we have received a stimulus from the libertarian IT guys instead. Fine_.

"_Helicopter money_" is an interesting idea, instead of quantitative easing.
Basically air dropping all deposit holders x amount of new digital coins during recession.
Discusses some problems with this, and then there's this little Orwellian bit:

_If the central bank allowed transfers from bank accounts to the digital currency, it would have to cap the amount a single individual could hold in the digital currency, perhaps at the level of the median monthly salary. In the absolute extreme, the central bank could also determine what goods the helicopter money could be spent on. _
_
https://www.bis.org/review/r180308a.htm
_


----------



## Duke of Marmalade

_jman _I agree that this BIS stuff is confusing, indeed to me a tad disturbing.  What I feel they cannot possibly mean is illustrated by the following fictional press release.

_"Today the BIS has launched biscoin.  It is based on blockchain technology.  It has no objective valuation basis and it is not linked in any way to any conventional currency.  The protocol will only allow 15 million units to be created so look guys this is even more scarce than bitcoin.  Its exchange rate will be determined by supply and demand so, ready, set , go let the brawl begin to establish its price." _


----------



## jman0war

Bitcoin has got them thinking, imagining, and inventing the future.
BIS wants to put themselves firmly at the centre of that future, which is not surprising.
But the fact is, it's happening.

They casually mention 'the next recession' like it's a surety.
Let it play out, Bitcoin looks long term bullish from where i'm sitting.


----------



## TheBigShort

Duke of Marmalade said:


> So to repeat earlier comments, if the Fed do enable blockchain transfers of $ it will have no impact whatsoever on the value of the $.



This makes no sense to me. The whole purpose behind blockchain, as presented in the form of bitcoin, is to provide _trustless _financial transactions. 
What point a Fed Res backed crypto if they can devalue it, like in 1933, or abandon the system altogether like in 1971 or mass produce like with QE? 
As jman0war quotes above, the mindset is of central control;



jman0war said:


> I_f the central bank allowed transfers from bank accounts to the digital currency, it would have to cap the amount a single individual could hold in the digital currency, perhaps at the level of the median monthly salary. In the absolute extreme, the central bank could also determine what goods the helicopter money could be spent on._


----------



## jman0war

Anyway, BIS is one to follow on your twitter feed Duke.
It's good to know what the enemy is thinking.


----------



## tecate

jman0war said:


> Bitcoin has got them thinking, imagining, and inventing the future.


When has banking been disturbed in how they do things?  If nothing else, can those either opposed to cryptocurrency or who don't have any belief in it understand that at a basic level, if it can light a fire under them and get them to offer an improved value proposition to consumers that in itself is a win?  Of course, I believe it can achieve a lot more but we will have to see how it plays out.



jman0war said:


> in looks long term bullish from where i'm sitting.


My immediate concern right now is the Tether issue.  Can't justify holding any crypto until that is truly outed and dealt with...which could be some time.
It's ironic but if what we think is at play with Bitfinex/Tether, it's completely averse to what bitcoin is all about.


----------



## Duke of Marmalade

tecate said:


> My immediate concern right now is the Tether issue.  Can't justify holding any crypto until that is truly outed and dealt with...which could be some time.
> It's ironic but if what we think is at play with Bitfinex/Tether, it's completely averse to what bitcoin is all about.


I decided in the interests of my crypto education to Google "Tether".  What an eye opener.  My read, but correct me where wrong, is as follows.

Tether is crypto backed by real US $ reserves, or so say Tether; so that 1 Tether coin is worth 1 US $.  (B/S are you watching?  Note that Tether does not  have a limited supply and is based on double trust - trust in Tether corp and trust in US $.)  So what is it for?  It is to enable crypto transfers of US $ so as to make the crypto exchanges fast but mostly because crypto exchanges find it difficult to have relationships with conventional banks.  Tether is in effect the US $ banker for the crypto exchanges.  As I understand it Tether has become more than that - it is now a significant part of the crypto exchange market - being responsible for as much  as 50% of any price rises.  So when you see the bitcoin latest price in $ you are probably really seeing its price in Tether coins.

Now by a remarkable coincidence the amount of Tether coins in existence more than doubled to over $2bn during the recent bitcoin downturn.  Where on earth did the Tether company get that amount of US $ to maintain their claim that Tether is 100% backed by US $?  The obvious suspicion arises.  Was Tether in fact "printing" these coins (could happen even for non central bankers don't you agree B/S?) so as to support the bitcoin price?   Does that explain the mini dead cat bounce?  In the last 24 hours 1.7bn Tether coins were transacted.  Is that what is supporting the market?  To fuel this conspiracy theory Tether  is unable to provide audit proof that it has the US $ backing for these coins and in fact its accountants ditched them very recently and it is under investigation by the US authorities.

The Daily Telegraph predicts that if Tether is exposed as not having these reserves then there would be an immediate 80% fall in the bitcoin price.  Does anybody really believe that Tether has those US $ reserves backing its coins?  I think _Boss _the timing of the burst is becoming clearer - weeks rather than months.  _tecate _you are right, Tether is the key to all this, and I respect your judgement for getting out until (if) it gets sorted.  People like _jman _will of course continue to see bull signs, no hope there I'm afraid.


----------



## tecate

Crypto will survive this Tether fiasco.  However, Id imagine anyone holding crypto will get badly burnt whenever it is dealt with.  It remains to be seen how or when that will happen.  However, it's another reason why regulation (in the right way) can be positive for bitcoin and crypto generally.


----------



## Sunny

Duke of Marmalade said:


> I decided in the interests of my crypto education to Google "Tether".  What an eye opener.  My read, but correct me where wrong, is as follows.
> 
> Tether is s crypto backed by real US $ reserves, or so say Tether; so that 1 Tether coin is worth 1 US $.  (B/S are you watching?  Note that Tether does not  have a limited supply and is based on double trust - trust in Tether corp and trust in US $.)  So what is it for?  It is to enable crypto transfers of US $ so as to make the crypto exchanges fast but mostly because crypto exchanges find it difficult to have relationships with conventional banks.  Tether is in effect the US $ banker for the crypto exchanges.  As I understand it Tether has become more than that - it is now a significant part of the crypto exchange market - being responsible for as much  as 50% of any price rises.  So when you see the bitcoin latest price in $ you are probably really seeing its price in Tether coins.
> 
> Now by a remarkable coincidence the amount of Tether coins in existence more than doubled to over $2bn during the recent bitcoin downturn.  Where on earth did the Tether company get that amount of US $ to maintain their claim that Tether is 100% backed by US $?  The obvious suspicion arises.  Was Tether in fact "printing" these coins (could happen even for non central bankers don't you agree B/S?) so as to support the bitcoin price?   Does that explain the mini dead cat bounce?  In the last 24 hours 1.7bn Tether coins were transacted.  Is that what is supporting the market?  To fuel this conspiracy theory Tether  is unable to provide audit proof that it has the US $ backing for these coins and in fact its accountants ditched them very recently and it is under investigation by the US authorities.
> 
> The Daily Telegraph predicts that if Tether is exposed as not having these reserves then there would be an immediate 80% fall in the bitcoin price.  Does anybody really believe that Tether has those US $ reserves backing its coins?  I think _Boss _the timing of the burst is becoming clearer - weeks rather than months.  _tecate _you are right, Tether is the key to all this, and I respect your judgement for getting out until (if) it gets sorted.  People like _jman _will of course continue to see bull signs, no hope there I'm afraid.



Indeed and the relationship between Tether and Bitfinex exchange...........


----------



## TheBigShort

Duke of Marmalade said:


> (B/S are you watching?



I'd say the question is, have you been watching?



TheBigShort said:


> In fairness, given the allegations of price manipulation and bitcoins current price trajectory, methinks it is time to sell up some more. Another 40% of my holding gone today. I'm down to 20% of what I held at most



You are about six weeks behind the curve.

Nevermind, what else have you got for us?



Duke of Marmalade said:


> Note that Tether does not have a limited supply and is based on double trust - trust in Tether corp and trust in US $.



Yes, sounds dodgy, don't like it.



Duke of Marmalade said:


> So what is it for? It is to enable crypto transfers of US $ so as to make the crypto exchanges fast but mostly because crypto exchanges find it difficult to have relationships with conventional banks. Tether is in effect the US $ banker for the crypto exchanges



So Tether has a conventional relationship with the US banking system? Wouldnt surprise me. As has/is being pointed out to you, that system is corrupted to the core. It is disease ridden. Full of fraud and manipulation. For sure, the system is so vast that certain levels of fraud and manipulation can be absorbed, but this is just another indicator of how bad it really is.
Imagine being able to set up a company claiming that there is $2bn in reserves, and for it to take this long before someone questions that claim?

Perhaps there is a cure, but I wouldn't too confident that there is.



Duke of Marmalade said:


> Where on earth did the Tether company get that amount of US $ to maintain their claim that Tether is 100% backed by US $? The obvious suspicion arises. Was Tether in fact "printing" these coins



Exactly! Dodgy or what?



Duke of Marmalade said:


> To fuel this conspiracy theory



A conspiracy theory, no, not you...surely not you, Duke?



Duke of Marmalade said:


> Tether is unable to provide audit proof that it has the US $ backing for these coins and in fact its accountants ditched them very recently and it is under investigation by the US authorities.



So essentially it "printed" a bunch of coins, which by themselves had nothing going for them - then claimed they were backed by US$ reserves....and the banks fell for this?



Duke of Marmalade said:


> The Daily Telegraph predicts that if Tether is exposed as not having these reserves then there would be an immediate 80% fall in the bitcoin price.



When did it predict this? Six weeks ago? The price has fallen 50-60% since then.



Duke of Marmalade said:


> Does anybody really believe that Tether has those US $ reserves backing its coins?



I don't.


----------



## Brendan Burgess

TheBigShort said:


> So essentially it "printed" a bunch of coins, which by themselves had nothing going for them - then claimed they were backed by US$ reserves....and the banks fell for this?



What banks fell for this? 

It's getting very complicated. 

Is this correct? 

Tether issued these coins. 
Bitcoin owners bought them with BTC. 
Presumably some eejits actually paid cash for them as well. 
Now the promoters of Tether own a lot of Bitcoin and have a lot of cash, although presumably not $2 billion in cash. 

Brendan


----------



## TheBigShort

Brendan Burgess said:


> What banks fell for this?
> 
> It's getting very complicated.



True, it is. I'm not sure, I'm just relying on what the Duke said;



Duke of Marmalade said:


> So what is it for? It is to enable crypto transfers of US $ so as to make the crypto exchanges fast but mostly because crypto exchanges find it difficult to have relationships with conventional banks. Tether is in effect the US $ banker for the crypto exchanges



Perhaps I misinterpreted. But I don't see how you could transfer US$ without using the conventional banking methods. But I'm happy to accept that I have misunderstood and got this bit wrong.


----------



## tecate

Brendan Burgess said:


> It's getting very complicated.
> 
> Is this correct?
> 
> Tether issued these coins.
> Bitcoin owners bought them with BTC.
> Presumably some eejits actually paid cash for them as well.
> Now the promoters of Tether own a lot of Bitcoin and have a lot of cash, although presumably not $2 billion in cash.


The idea behind Tether is that it tracks the USD and they are to hold equivalent USD.  It was/is used by people holding other crypto's when they want to opt out of whatever crypto they're holding.  Cashing out to FIAT can be expensive and difficult.

The fatal flaw is that it is centralised.  I looked at it a long time ago but for this reason I opted out.  Furthermore, burried in their t&c's it states that they are not obliged to meet dollar value.

I knew it was dodgy a long time ago.  What I didn't see until late January was the effect it could have on btc through their actions.  Most likely BTC liquidity is completely false right now as a direct result of Tether.


----------



## Negotiator

It's impossible to know how many people actually hold Tethers on average at any given time (the amount of the float that is in use per se) but this is the key figure to understanding the risks. The exchanges can have any amount of Tether but if the punters don't actually use them then it doesn't matter. 

I don't trust Tether at all and feel very uncomfortable holding them but I have only held them for relatively short periods of time. They are a great way of exiting the Crypto market for a short period of time but obviously creates a new risk. Could it all go t1ts up?  Definitely but it's a necessary evil until a better solution is found. In fact the concept of Tether is absolutely fine but it needs to be properly audited on a regular basis and given a lot more transparency. 

I think Tether is most vulnerable when the markets falls considerably so if it didn't collapse at around the $6k mark then I think it will need to fall a good bit below this price for it to be an issue again. Just my 2 cents on it, obviously anything is possible!


----------



## Sunny

Negotiator said:


> It's impossible to know how many people actually hold Tethers on average at any given time (the amount of the float that is in use per se) but this is the key figure to understanding the risks. The exchanges can have any amount of Tether but if the punters don't actually use them then it doesn't matter.



Of course it matters. The price of Bitcoin is being manipulated with false liquidity and if rumours are to be believed, Bitfinex (just happens to have the same CEO as Tether) is trading Bitcoin using made up Tether for it's own benefit.


----------



## TheBigShort

I would have thought it was people buying bitcoin with tether, inflating the bitcoin price with unverified amounts of $US via Tether coin. 
From what im reading above Tether was bought with bitcoin instead? Wouldnt that reduce the bitcoin price against the dollar?


----------



## TheBigShort

Sunny said:


> Of course it matters. The price of Bitcoin is being manipulated with false liquidity



Does it matter that such false liquidity is so easily introduced and not verified before it is accepted? 
From my reading it appears that all you need is some slick marketing and shiny teeth and hey presto! - you can trust that I have $2bn in reserve!


----------



## tecate

TheBigShort said:


> I would have thought it was people buying bitcoin with tether, inflating the bitcoin price with unverified amounts of $US via Tether coin.


It's Bitfinex/Tether buying BTC with Tether they've magic'ed up. 


They're acting like their own private central bank! It's everything BTC aims not to be.

I agree with Negotiator that it would be useful if properly regulated...but that won't be via Bitfinex/Tether.


----------



## tecate

TheBigShort said:


> From my reading it appears that all you need is some slick marketing and shiny teeth and hey presto! - you can trust that I have $2bn in reserve!


Those guys are not bothered.  At this point they can issue it at will. No slick marketing required.

They're in the BVA.  The yanks supoena'd them but they don't have to comply. Hopefully they find a way to get at them and reign them in.


----------



## jman0war

> Bitmex Research released an in-depth report on Tether today, Feb. 19, detailing the reasons why Tether is most likely backed by sufficient fiat reserves after all, and what problems with regulatory bodies Tether will most likely encounter in the future.


They are concerned that it could be subject to government shutdown.
https://cointelegraph.com/news/bitm...enough-cash-reserves-could-still-be-shut-down


----------



## Negotiator

tecate said:


> The yanks supoena'd them but they don't have to comply. Hopefully they find a way to get at them and reign them in



They basically dumped all their US customers last year so they wouldn't have to deal with the Yanks. Their excuse was that US customers only accounted for a very small amount of their business so it wasn't worth all the red tape etc etc. A perfectly viable reason but we don't know whether it was more to do with the whole Tether situation or not.


----------



## Gus1970

Brendan Burgess said:


> I can't prove that a bag of air is worth nothing.



Oh yes you can! Go to the market and offer it for sale. If you have no bidders, the bag is worth nothing.

Now do the same with a bitcoin.


----------



## Sunny

jman0war said:


> They are concerned that it could be subject to government shutdown.
> https://cointelegraph.com/news/bitm...enough-cash-reserves-could-still-be-shut-down



Dear God. From the report:

_The Bitmex report attempts to refute those rumors by showing a possible correlation between the rising cash reserves of the International Financial Entities (IFE) banking category in __Puerto Rico__, under a section entitled “The lack of transparency may not indicate fraud.”

Cointelegraph recently reported that Puerto Rico may be emerging as a “__crypto tax paradise__.”

The Bitmex reports puts forward Puerto-Rican-based Noble Bank as a possible candidate for holding Tether’s cash reserves, mainly because it is the one of the two full-reserve banks in Puerto Rico that publicly operates with crypto._

All good with Tether then. Nothing to worry about as the money was in Puerto Rico all this time.....Well there was some money belonging to someone being held in some bank in Puerto Rico. What other assurances do people want??


----------



## jman0war

well at least BitMEX tried.
What evidence do you have to the contrary?

I'm not sure why a "crypto tax paradise"  is singled out.
It would make PR a likely place to find such bank deposits, would it not?


----------



## TheBigShort

Sunny said:


> All good with Tether then. Nothing to worry about as the money was in Puerto Rico all this time.....Well there was some money belonging to someone being held in some bank in Puerto Rico. What other assurances do people want??



Not much of a sales pitch for either Tether or fiat there. Looks like no-one can assure anyone of anything.


----------



## Duke of Marmalade

Brendan Burgess said:


> What banks fell for this?
> 
> It's getting very complicated.
> 
> Is this correct?
> 
> Tether issued these coins.
> Bitcoin owners bought them with BTC.
> Presumably some eejits actually paid cash for them as well.
> Now the promoters of Tether own a lot of Bitcoin and have a lot of cash, although presumably not $2 billion in cash.
> 
> Brendan


No I don't think that is it.  I think it is cruder than that.  They allegedly issued the coins to themselves allegedly pretending they could do so because they had sufficient US $ to back these newly printed coins.  They then allegedly used the freshly printed coins to buy bitcoin thus allegedly supporting the price.  A very significant amount of supposedly US $/bitcoin trades are in fact Tether/bitcoin trades and create the illusion that real US $ are being used to but bitcoin.


----------



## Brendan Burgess

Hi Duke

I think we are saying roughly speaking the same thing. 

I say: BTC owners bought Tethers.
You say: Tether bought BTC 

So the Tether demand pushed up the price of BTC. 

Why did they not sell some of the BTC for real cash? 

None of this makes any sense, but maybe in the mad, mad, mad, mad, mad, mad World of BTC, it does.

Brendan


----------



## jman0war

If they don't have the actual Bitcoin then their customers would not be able to move their coins.

Additionally their customers would not be able to buy other alt coins on their exchange with their BTC. It would be found out.


----------



## Duke of Marmalade

Brendan Burgess said:


> Why did they not sell some of the BTC for real cash?
> 
> Brendan


They probably did.  They effectively had a printing machine for US $ supposedly backed by real US $.


----------



## Brendan Burgess

It appears that the fall today is due to Google banning ads for cryptocurrencies and ICOs.

https://www.reuters.com/article/us-...CN1GQ0GD?utm_source=Twitter&utm_medium=Social

_Under the new policy, Google said it would ban ads for cryptocurrencies and related content such as initial coin offerings, crypto exchanges and cryptocurrency wallets and advertisements providing trading advice.
_
But it's also banned ads for spread betting!

_Google also said on Wednesday it would stop ads for financial products like binary options and synonymous products, contracts for difference, rolling spot forex and financial spread betting._


----------



## Negotiator

Brendan Burgess said:


> I say: BTC owners bought Tethers.
> You say: Tether bought BTC
> 
> So the Tether demand pushed up the price of BTC.



There's a lot more to Cryptos than Bitcoin. For example, I have never sold BTC for Tethers EVER and yet I have held Tethers on dozens of occasions. How many other Cryptopians have done the same?  I would say a large %. 

I also think that Tether has had practically ZERO influence on the price of BTC. The reason why the price would fall if there was a serious Tether issue would be more to do with confidence in Exchanges as the likes of Bitfinex is one of the biggest (if not THE biggest) and it is closely associated with Tether so it would be very serious for the market in general.



Brendan Burgess said:


> Why did they not sell some of the BTC for real cash?



Because traders like to sit out the market for a short period of time ready to buy back in. To do this via FIAT can be a lengthy process depending on the amounts involved, not to mention the cost of doing it.


----------



## TheBigShort

Brendan Burgess said:


> I think we are saying roughly speaking the same thing.
> 
> I say: BTC owners bought Tethers.
> You say: Tether bought BTC
> 
> So the Tether demand pushed up the price of BTC.



I think you are saying the complete y opposite to each other. 
If im buying Tether with BTC (effectively offloading BTC for US$) then the BTC price will fall.  

The only sense I can make of it is that the exchange owners introduced a new coin, tether, and that punters bought it with €$£ and then those €$£ were used by the exchange owners to buy bitcoin, ramping up the price of bitcoin but falsely claiming that those €$£ were held on reserve for tether or,
punters bought tether with €$£ for the purposes of avoiding exchange transaction fees trading in bitcoin and other cryptos and that the exchange owners used the €$£ to buy BTC but are now under scrutiny for the tether reserves, that are actually BTC reserves? 
Or something like that, if thats not the same thing repeated


----------



## Sunny

How can anyone say tether has had zero impact on the price of bitcoin???


----------



## Negotiator

Sunny said:


> How can anyone say tether has had zero impact on the price of bitcoin???



This is how Sunny.....

There are roughly 2.2bn Tethers in circulation but that doesn't mean there are all in use so let's say half of them are in use at any given time as I'd imagine most exchanges would keep a float in case of any spikes given how volatile the market is.

So that leaves us with 1.1bn. That would represent a mere 0.75 of 1% of the market cap of Bitcoin or circa 0.35 of 1% at it's peak.

The numbers are miniscule when you put them in perspective.

The real question that we should be asking is how much Tether does each exchange hold relative to it's day to day cash requirements as that could put them under.


----------



## TheBigShort

Negotiator said:


> There are roughly 2.2bn Tethers in circulation



Representing, apparently $2.2bn.



Negotiator said:


> That would represent a mere 0.75 of 1% of the market cap of Bitcoin or circa 0.35 of 1% at it's peak.



Thats the way I would read it. 
In all of this, it appears, there are three players, Tether, Bitcoin and US$. If you hold tether its possible you hold nothing? If you hold the other two, you are fine.

On the otherhand, its possible that there are US$ dollars behind Tether, just that they are off-shore, under some Puerto Rican bankers mattress, on some yacht somewhere in the Caribbean sea with a bunch of other yachts owned by bankers that have US$ dollars on board and the bankers are so high from partying that nobody can remember which paradise account the money came from. Hence the difficulty in auditing.


----------



## Brendan Burgess

TheBigShort said:


> If you hold the other two, you are fine.



I am confused.  Have you not argued that the dollar is going to be heavily devalued due to corrupt bankers and QE? 

Brendan


----------



## TheBigShort

Brendan Burgess said:


> I am confused.  Have you not argued that the dollar is going to be heavily devalued due to corrupt bankers and QE?
> 
> Brendan



Ba-doosh! Nice one Brendan, you have cornered me there. Lets see if I can wriggle out of it? 

"...if you hold the other two you are fine _for the time being. That is, both bitcoin and $US have ready made markets that will accept each other as legitimate forms of payment. I cant be sure about Tether, and given the controversy surrounding it I wouldnt be surprised if its value went to zero. 
That said, bitcoin is also highly volatile and considering the corruption inherent in the $US then dont be surprised if either of them bite you in the backside too. 
However, purely in the context of the controversy surrounding Tether, they are fine."_


----------



## Sunny

Negotiator said:


> This is how Sunny.....
> 
> There are roughly 2.2bn Tethers in circulation but that doesn't mean there are all in use so let's say half of them are in use at any given time as I'd imagine most exchanges would keep a float in case of any spikes given how volatile the market is.
> 
> So that leaves us with 1.1bn. That would represent a mere 0.75 of 1% of the market cap of Bitcoin or circa 0.35 of 1% at it's peak.
> 
> The numbers are miniscule when you put them in perspective.
> 
> The real question that we should be asking is how much Tether does each exchange hold relative to it's day to day cash requirements as that could put them under.



This is why all this is a complete bubble. There is absolutely no rational analysis by some people here. Some other people seem to be fully aware and happy to take the risk which is fair enough. But others......

The problem isn’t the amount of tether that is held by exchanges or even the amount in circulation. The issue is the strong correlation between the issuance of new tether which looks like it made up out of thin air and the rise in price of bitcoin. When the price of bitcoin fell from the highs, it looks like it was manipulated by some company in the British Virgin Islands creating Monopoly money and who just happen to own their own exchange which is one of the largest if not the largest bitcoin exchanges despite not being exactly open about it. 

It would be the equivalent of the Irish stock exchange printing a couple of billion of notes, purchasing BOI shares and everyone talking about how BOI was a great investment. 

And before anyone says it, I know central banks can print money but if anyone tries to compare the FED to a company in the British Virgin Islands, I will know this discussion has lost the plot. 

Maybe there is no big deal here but I wouldn’t bet on it.


----------



## Brendan Burgess

Sunny said:


> It would be the equivalent of the Irish stock exchange printing a couple of billion of notes, purchasing BOI shares and everyone talking about how BOI was a great investment.



Very good analogy Sunny.

But they would not have to print a couple of billion.  A few million should be enough to cause a spike in the price of BoI but, of course, you would need a few billion, to keep the bubble going. 

The question is would owners of BoI shares sell them in exchange for these "notes"?  Would the ISE then hold onto the BoI shares or feed them slowly back into the market for real cash? 

Brendan


----------



## tecate

Negotiator said:


> So that leaves us with 1.1bn. That would represent a mere 0.75 of 1% of the market cap of Bitcoin or circa 0.35 of 1% at it's peak.


Isn't the issue that the same can be said of btc market cap?  i.e. there's only a certain proportion of it that's liquid?  Therefore, the proportion of dodgy tether or btc bought with dodgy tether swirling around is higher if we take out the sizeable quantity of btc that is not being traded?



Sunny said:


> And before anyone says it, I know central banks can print money but if anyone tries to compare the FED to a company in the British Virgin Islands, I will know this discussion has lost the plot.


I don't like the ability to magic up money by either of them.


Sunny said:


> Maybe there is no big deal here but I wouldn’t bet on it.


I believe it is a big deal - and one that can't be dealt with soon enough so that crypto can move past that.  Regulation is going to be required to reign these guys in and prevent future versions from pulling the same stunt.

However, whilst I believe that some folks are going to get badly burnt here, this doesn't spell the end of crypto in any way, shape or form.  It's just another issue that needs to be resolved and shored up in it's ongoing development.


----------



## Firefly

tecate said:


> Regulation is going to be required to reign these guys in and prevent future versions from pulling the same stunt.



Hi tecate,

What in your view would this regulation look like, who would perform the regulation and how would they do it?

Firefly.


----------



## tecate

Firefly said:


> Hi tecate,
> 
> What in your view would this regulation look like, who would perform the regulation and how would they do it?
> 
> Firefly.


If there's going to be a centralised crypto like Tether, then there will have to be a body that can verify that there are USD on account to back Tether - just like they claim.  Who would perform it?  In this particular instance with them working out of the BVA, I'm not sure.  How does it work for banks that work out of the BVA?


----------



## jman0war

Where did that chart go, of tethers in circulation and the sudden uptick?
Could that coincide with Bcash price pump, or CBOE and CME Futures?
Or even that Mt. Gox trustee, bear whale dumping coin?


----------



## ant dee

Firefly said:


> Hi tecate,
> 
> What in your view would this regulation look like, who would perform the regulation and how would they do it?
> 
> Firefly.



Well, if a tether-like product is regulated properly, I cannot see how it would not end up being like a regular online bank...


----------



## tecate

ant dee said:


> Well, if a tether-like product is regulated properly, I cannot see how it would not end up being like a regular online bank...


Tether is different. It's a centralised crypto.  I wouldn't be a fan..but then it does have a use case.  If it didn't people wouldnt be using it (see earlier in this thread for use case).
There are some start ups trying to be both a bank and crypto exchange - OR - allow customers to hold both so there is some merit in your point so long as you accept that both exist - FIAT and Crypto.


----------



## Firefly

ant dee said:


> Well, if a tether-like product is regulated properly, I cannot see how it would not end up being like a regular online bank...



But a regular online back is regulated by a central bank somewhere...


----------



## ant dee

Firefly said:


> But a regular online back is regulated by a central bank somewhere...


That's my point really. Since it is is centralised, it should be properly regulated. There should be insurance.


----------



## Firefly

Bitcoin below $7k now...time to buy?


----------



## Brendan Burgess

Hi fly

It's just the normal volatility. 

I got excited before as it fell towards $6,000 so I am not excited now.

Brendan


----------



## Negotiator

Brendan Burgess said:


> Hi fly
> 
> It's just the normal volatility.
> 
> I got excited before as it fell towards $6,000 so I am not excited now.
> 
> Brendan



Go on outta that Brendan, I bet you're checking the price every hour!   In fairness you must be sitting on a 7 or 8 grand profit at this stage!


----------



## honeybadger12

I will buy some bitcoins if the price falls close to $5,000. It's insane how a few highly respected investors are predicting it will reach nearly $25,000 by the end of the year.


----------



## tecate

honeybadger12 said:


> Personally I think bitcoin's bottom will be around $5,000


I'd be tempted to buy back in sub 5k..


----------



## honeybadger12

tecate said:


> I'd be tempted to buy back in sub 5k..



It's only a matter of waiting for all the dead wood to sell off their positions.


----------



## Brendan Burgess

Negotiator said:


> Go on outta that Brendan, I bet you're checking the price every hour!



Hi Negotiator 

I had missed this.

You know that the mad thing is that you are not far off the truth. 

Although falls or rises in the stock market would have a much bigger impact on me, I check Bitcoin more often. 

That might be because I know that my position in Bitcoin is only temporary, whereas I am a long-term buy and holder of shares. 

In practice, I don't even need to watch Bitcoin as I have set a limit of $3,000 - in other words, when it falls to $3,000, my position will be closed automatically. 

It is a bit frustrating though how long it's taking for the price to fall to its true value of zero.  I would be much happier if it crashed now and I would no longer have a position.

Having said that, the optimal outcome for me would be a drop to $3,000 and then a recovery back to $12,000 where I would sell short again. 

Brendan


----------



## Negotiator

Brendan Burgess said:


> It is a bit frustrating though how long it's taking for the price to fall to its true value of zero. I would be much happier if it crashed now and I would no longer have a position.



Spoken like a true Crypto trader! 

You've made about 50% (maybe more including interest and more again return on capital deployed due to leverage etc) return in just a few short months and you wish your target would come quicker!   It's funny how Cryptos trading has that effect on you regardless of which side of the trade you're on! 

I would cash this out now as there seems to be decent enough Support around current levels and volumes have dried up a good bit too which could mean all the weak hands have been shaken out of the market leaving very few sellers. 

We also seen a huge amount of FUD since the January including hackings, outright bans on exchanges and ICO's, Scams, Tether nervousness, traders being hit with massive tax bills forcing them to dump their positions etc etc.

I think we've had a pretty decent shakeout in the market now and people will be a lot more careful in choosing which coins they put money into. I think the massive increases of the past are long behind us now but wouldn't be surprised if the market ticks up throughout the summer.

Do I think it's possible it will go to $3k? Absolutely, but very unlikely imo.

Good luck with your trade though, it was a brave move and you deserve to be rewarded for the risk taken!


----------



## Duke of Marmalade

Negotiator said:


> Good luck with your trade though, it was a brave move and you deserve to be rewarded for the risk taken!


I will let the _Boss _speak for himself but I followed his recommendation and did a bit of shorting myself at 14,600.  I can assure you it was anything but brave - I thought I was on to a sure thing.  In fact I am so cowardly I got out around 8,400.


----------



## MrEarl

Credit where it's due....

Our lads on short positions have certainly done well based on current prices and what they got in at.  Obviously the trick is to close out for significant profit, and if it were me, I would have been a bit like Duke and closed out already.



Brendan Burgess said:


> .....
> 
> Although falls or rises in the stock market would have a much bigger impact on me, I check Bitcoin more often.
> 
> That might be because I know that my position in Bitcoin is only temporary, whereas I am a long-term buy and holder of shares.



I suspect it may be the extreme volatility that is causing you to check prices so often, and the fact that you may not be used to taking on high levels of risk.

Would you ever go to a casino (or an online casino) and play a few hands of cards, or roulette etc. money at stake, out of interest ?  

I see trading in cryptos as having a level of risk closer to gambling, than dealing in quoted equities, to be honest.

The Coinbase app allows you to set alerts, to tell you when the price of certain cryptos has moved up or down.  You can set numerous alerts at different prices for say Bitcoin, and get a little notification on your phone when that price has been reached. It may be a more convenient way to feed the addiction than having to go to a website on a regular basis, to check prices 



> It is a bit frustrating though how long it's taking for the price to fall to its true value of zero.  I would be much happier if it crashed now and I would no longer have a position.



To be honest, I think part of the frustration for you is that you want it to go to zero, so you can be proven entirely right here given the strong stance you've taken against Bitcoin and other cryptos having any value.  That's not a criticism here btw.

You have an opportunity here to close out your current position and make quite a nice profit, surely you must be tempted ?

There would be nothing to stop you taking new (smaller) positions into the future, even at lower prices than $3k and profit further if your belief that Bitcoin is worthless does come to pass.  In the interim, you get to cash in and enjoy some of the benefit of you past wisdom.



> Having said that, the optimal outcome for me would be a drop to $3,000 and then a recovery back to $12,000 where I would sell short again.
> 
> Brendan



If that happens, I think every one of us will be shorting Bitcoin


----------



## Brendan Burgess

MrEarl said:


> I see trading in cryptos as having a level of risk closer to gambling, than dealing in quoted equities, to be honest.



Mr Earl,

I don't see myself as "trading in cryptos".

It may well be gambling but with the odds stacked in my favour. I understand the risk involved and I might lose my stake.

I have short sold a bag of hot air at $14,600 which is currently $7,700.

That seems very different from the punters who are betting on the short-term moves based on codswallop such as this:


















I must say that I have never liked "double bottom necklines". A bit to bearish for my liking.

Brendan


----------



## Negotiator

Brendan Burgess said:


> Mr Earl,
> 
> I don't see myself as "trading in cryptos".
> 
> It may well be gambling but with the odds stacked in my favour. I understand the risk involved and I might lose my stake.
> 
> I have short sold a bag of hot air at $14,600 which is currently $7,700.
> 
> That seems very different from the punters who are betting on the short-term moves based on codswallop such as this:
> 
> 
> View attachment 2735
> 
> 
> View attachment 2733
> 
> 
> 
> View attachment 2734
> 
> I must say that I have never liked "double bottom necklines". A bit to bearish for my liking.
> 
> Brendan



You are absolutely trading in cryptos Brendan, you've taking a short position on Bitcoin. 

The examples you gave of traders using technical analysis for Cryptos is not really much different to using it for equities. Whilst I believe TA can be a tool in trading to those who fully understand it, it can't be relied upon solely. So my point is, this type of madness happens in both equities and crypto trading!


----------



## Brendan Burgess

Negotiator said:


> this type of madness happens in both equities and crypto trading!



Absolutely agree with you. It's nonsense in both. 

Brendan


----------



## TheBigShort

Brendan Burgess said:


> It is a bit frustrating though how long it's taking for the price to fall to its true value of zero.



This would suggest Brendan that you have a timeframe in mind as to when it will fall to zero? 
I would have thought a bag-of-hot-air, that once it burst, its only trajectory would be to zero?


----------

