Big jump in Bitcoin...

[tecate]

I agree that the nature of regulations may need to be different but it would have to achieve the same thing - who is initiating a transfer, who is receiving it, scrub names against sanctions lists, monitor unusual transactions and report them. If these aren't achieved but it is still plugged into the mainstream infrastructure then it just becomes a massive loophole

Well, they may as well move directly to a blanket ban (if they consider that a wise move) - as Bitcoin by its very nature is at least pseudo-anonymous (and can be fully anonymous with the right approach). Who is initiating a transfer and receiving a transfer - well, they can use (and are using) specialized software in order to chase that. However, people are not going to willingly provide that info. It's one of the fundamentals of decentralised cryptocurrency. And of course, there-in lies the problem. They (governments and government agencies) simply have to make their minds up as to how they're going to deal with this.

 

[EmmDee]

Well, they may as well move directly to a blanket ban (if they consider that a wise move) - as Bitcoin by its very nature is at least pseudo-anonymous (and can be fully anonymous with the right approach). Who is initiating a transfer and receiving a transfer - well, they can use (and are using) specialized software in order to chase that. However, people are not going to willingly provide that info. It's one of the fundamentals of decentralised cryptocurrency. And of course, there-in lies the problem. They (governments and government agencies) simply have to make their minds up as to how they're going to deal with this.

Well - not so much. It just means it can't easily convert to currency on the banking infrastructure. It could happily exist anonymously with no regulation as a "walled garden". Likewise we could choose to use stones between us as a value token. Doesn't need to be regulated at all - can be ignored. The problem occurs when we want to switch to currency.

Which brings us to your original problem... you wanted to get out of Bitcoin. But a bit like any other investment, there are risks involved which need to be understood when going in. It seems one of the risks of Bitcoin is liquidation risk. You like the benefits of Bitcoin but are blaming others for the disadvantages of it

 

[Duke of Marmalade]

tecate I am not convinced by your explanations of the “uptick”
Panicking equity investors: No. If there was panic about the value of FIAT currencies, yes that might explain things. But equity investors are not in a panic about the value of the currencies. In times of panic there is a flight to safety - bitcoin ain’t safe.
The Halving: the supply of bitcoin is controlled and everybody knows what it will be in the future. There is no new development here and so no reason for a “uptick”. In fact the scarcity is not increasing, it is decreasing. There are 16.7m bitcoins in supply now and there will be more next year
Big names accepting bitcoin: Are they really? Will Starbucks really be pricing in bitcoin? Or as a marketing gimmick will they be setting up an interface which converts bitcoin at the going rate to dollars?
Maybe developments on the futures exchanges are having an influence, I remember that was behind the surge in 2017. I’ll buy that one but does it really explain a 100% jump?

 

[Brendan Burgess]

Really only two other possible reasons for the price surge
1. A sudden jump in the demand to buy lattes with crypto. or
2. Renewed speculation that the price will soar If this then I have the supplementary question: what is fueling this speculation?

It wasn't much different with the dot.com bubble. There was no connection between the price of the shares and the underlying performance of the company. It was very old fashioned to dare suggest that there had to be such a relation.

But prices went up and down fuelled by any rumour or development. "Fyffes is about to add .com to their name" share price starts rising. Most of us knew it was irrational, but couldn't really profit from it.

Bitcoin has an advantage over hypervalued shares. With shares you can point out that the price is a multiple of the revenues and the company has little prospect of making profits. Bitcoin doesn't face that restriction - there is nothing on which to base the valuation.

We know it's worth zero. Absolute zero and, in time, its price will match its value. But it has survived much longer than I expected. Will it crash to zero before the end of 2019? I thought it would have gone most of the way by the end of last year, but it didn't.

But at some stage it will go to zero - hopefully, it doesn't rise above my close out limit before then.

Brendan

 

[tecate]

You like the benefits of Bitcoin but are blaming others for the disadvantages of it

I'd like there to be clarity. Because what we are saying is that banks don't cash out funds that emanate from a cryptoexchange -full stop. Let them all come out and say that then.

I opened up a bank account on the explicit basis that I would be financing it through cryptocurrency - that was what was explained to them. If they had an issue with it on opening, that was the time to disclose it. The very same with all the exchanges that have set out on that basis - only for banks to later pull the rug out from under them when they were in the middle of meeting the needs of customers.
That 'disadvantage' is being imposed by regulators and banks - it comes from them and of course I will blame them for it. The suggestion seems to be that conventional systems can't be changed - they can and they should. But otherwise, you're right. The crypto-space will overcome those difficulties one way or another.

 

[tecate]

It wasn't much different with the dot.com bubble. There was no connection between the price of the shares and the underlying performance of the company. It was very old fashioned to dare suggest that there had to be such a relation.

But prices went up and down fuelled by any rumour or development. "Fyffes is about to add .com to their name" share price starts rising. Most of us knew it was irrational, but couldn't really profit from it.

Bitcoin has an advantage over hypervalued shares. With shares you can point out that the price is a multiple of the revenues and the company has little prospect of making profits. Bitcoin doesn't face that restriction - there is nothing on which to base the valuation.

We know it's worth zero. Absolute zero and, in time, its price will match its value. But it has survived much longer than I expected. Will it crash to zero before the end of 2019? I thought it would have gone most of the way by the end of last year, but it didn't.

But at some stage it will go to zero - hopefully, it doesn't rise above my close out limit before then.

Brendan

Respectfully, the only possibility of it dying away is if another cryptocurrency manages to get out in front of it in every respect. Otherwise, it's not going to zero. New technologies and markets come with hype cycles - and there's no doubt there's more than an element of that involved here. Markets may be irrational and this one often is. But then Bitcoin has been declared dead and buried umpteen times.

 

[Folsom]

But then Bitcoin has been declared dead and buried umpteen times.

That is very interesting. Im wondering however, if so many people of reasonable intelligence and of reasonable influence cannot understand bitcoin, its mechanics, its draw, etc, then isnt that a big problem for bitcoin?

 

[tecate]

That is very interesting. Im wondering however, if so many people of reasonable intelligence and of reasonable influence cannot understand bitcoin, its mechanics, its draw, etc, then isnt that a big problem for bitcoin?

In terms of its use as a day to day transactional currency, certainly. There's a volume of work to be done to make it easier to use. We've had the same with many technologies in the past. For example, getting email from a point where only geeks could manage it to the point where your granny could use it took some time.

As a store of value (and many will dispute its development as a store of value), its still a difficulty but there are plenty of people who can use it as a store of value and custody it themselves or have someone else custody it. That I also expect to be made more customer friendly as we progress.


One other thing to bear in mind. Cash is going - it's just a matter of the timeframe. Sweden is almost cashless already. However, they have long since had a project open with a view towards launching a central bank digital currency (CBDC). As someone who comes from the perspective of decentralised crypto, a centralised digital currency isn't very interesting to me. However, from the perspective of conditioning people into using a digital currency, then it's highly significant.

 

[Duke of Marmalade]

That is very interesting. Im wondering however, if so many people of reasonable intelligence and of reasonable influence cannot understand bitcoin, its mechanics, its draw, etc, then isnt that a big problem for bitcoin?

Au contraire. There are of course the nerds who understand it and love it for its aesthetic beauty. There are also the religious zealots who see it as fingers to the financial order. But my guess is that speculative surges such as we see now are driven by neither of these constituencies but by folk who haven’t a clue what it is but are ready to pounce on the least sign that the price might go sky rocketing. Now if these latter folk really did understand how crypto worked and in fact how crude a technology it is they wouldn’t touch it with a barge pole.

 

[tecate]

Au contraire. There are of course the nerds who understand it and love it for its aesthetic beauty. There are also the religious zealots who see it as fingers to the financial order.

I see. So these institutional investors who are getting involved in the market are religious zealots? The pension fund managers that have added crypto to their portfolios, the same?
There are all sorts of folk implicated with cryptocurrency and blockchain right now. Yes, some approach from the perspective of crypto and blockchain with a view towards it providing a mechanism to help to advance society in various ways. Only a blind man can't see that the technology has such attributes and the potential to benefit society provided its correctly implemented.

As regards the 'religious zealot' jibe, having had this debate/discussion with you many times, yours is just as much an entrenched view as I've found amongst no-coiners. The zealotry cuts both ways.

But my guess is that speculative surges such as we see now are driven by neither of these constituencies but by folk who haven’t a clue what it is but are ready to pounce on the least sign that the price might go sky rocketing.

There's a hype cycle associated with any form of promising new technology. We see the same with AR/VR/AI. As regards this recent uptick - the reasons I provided you with above cover it. Do people sit up and take notice, then FOMO in afterwards? Sure. Greed is part of the human condition. It may be especially on show in this market - but it's to be seen in every other market too - to varying extents.

Now if these latter folk really did understand how crypto worked and in fact how crude a technology it is they wouldn’t touch it with a barge pole.

If you're going to make that claim, then you'll have to back it up with...something. So...please tell us how it's such a 'crude' technology?

 

[Brendan Burgess]

So these institutional investors who are getting involved in the market are religious zealots? The pension fund managers that have added crypto o their portfolios, the same?

Absolutely. The dot.com bubble was not fuelled by a few mad individual zealots. Big funds bought them as well.

There are all sorts of folk implicated with cryptocurrency and blockchain right now.

Why do you put both crytpo and blockchain in the same sentence like that?

We are not dismissing the blockchain as being worthless - just Bitcoin.

Brendan

 

[tecate]

Absolutely. The dot.com bubble was not fuelled by a few mad individual zealots. Big funds bought them as well.

Sure, but there was something tangible behind it. There is something tangible behind this too. Will people get their fingers burnt - for sure, many will. This market has proven to be cyclical - and so, we will have that happen again. It doesn't mean that there are not good fundamentals behind it (even if people pile in at the end and go over-board). There are other aspects that can't be compared with the dot com bubble. It's a scarce asset and that affects the supply/demand dynamic. Of course, from your perspective, it's got a value of zero and that's fine. It's a question of whether others share that view. As it stands at this moment, people determine it's value at $8086. Perhaps that dynamic will change and it will collapse permanently. That's your opinion albeit that it's not one I share.
Other than that, thanks for confirming that Duke's notion that Bitcoin is the sole preserve of 'religious zealots' is inaccurate.

Why do you put both crytpo and blockchain in the same sentence like that?

I've every right to do so as Bitcoin is a blockchain technology - the original blockchain technology. The establishment financial services set started with this mantra of 'Blockchain, not Bitcoin'. Jamie Dimon called it a fraud. Roll on a few months and J.P. Morgan is launching its own cryptocurrency. Facebook banned cryptocurrency related advertising. They just changed that policy considerably as news emerges that they will launch their own cryptocurrency within weeks.

In terms of extended blockchain use cases, be aware that Microsoft have opened an identity project which will run on top of the Bitcoin blockchain network. That has surprised many but it seems that technologists are finding ways to add other services with Bitcoin at its core using secondary layer. I guess they want to use it as its proven itself - unlike younger blockchain networks.

 

[Duke of Marmalade]

I see. So these institutional investors who are getting involved in the market are religious zealots? The pension fund managers that have added crypto to their portfolios, the same?
There are all sorts of folk implicated with cryptocurrency and blockchain right now. Yes, some approach from the perspective of crypto and blockchain with a view towards it providing a mechanism to help to advance society in various ways. Only a blind man can't see that the technology has such attributes and the potential to benefit society provided its correctly implemented.

As regards the 'religious zealot' jibe, having had this debate/discussion with you many times, yours is just as much an entrenched view as I've found amongst no-coiners. The zealotry cuts both ways.


There's a hype cycle associated with any form of promising new technology. We see the same with AR/VR/AI. As regards this recent uptick - the reasons I provided you with above cover it. Do people sit up and take notice, then FOMO in afterwards? Sure. Greed is part of the human condition. It may be especially on show in this market - but it's to be seen in every other market too - to varying extents.

If you're going to make that claim, then you'll have to back it up with...something. So...please tell us how it's such a 'crude' technology?

Zillions and zillions of trial and error attempts to solve a hashtag. Givuz a break, doesn’t get more crude than that.

 

[Brendan Burgess]

Of course, from your perspective, it's got a value of zero and that's fine. It's a question of whether others share that view.

Hi Tecate

Let's say that I think that Ryanair is a good company and the share is worth buying. I do a calculation based on earnings - I work out that its value is €10. If the price is less than that, I buy. If it's more than that, I don't.

So you must presumably have done some calculation to arrive at a valuation for Bitcoin? So could you share that with us? Forget the price - tell us what you think the value is.

Brendan

 

[tecate]

Zillions and zillions of trial and error attempts to solve a hashtag. Givuz a break, doesn’t get more crude than that.

To solve a what now?
I'm sorry the thing didn't arrive out of the box and disrupt world finance in one day as per your requirements. I dont have the same problem as you seem to have with trial and error. It's how practically EVERYTHING is improved upon.

Hi Tecate

Let's say that I think that Ryanair is a good company and the share is worth buying. I do a calculation based on earnings - I work out that its value is €10. If the price is less than that, I buy. If it's more than that, I don't.

So you must presumably have done some calculation to arrive at a valuation for Bitcoin? So could you share that with us? Forget the price - tell us what you think the value is.

Brendan

Quite happy to answer Brendan but I'll get there by asking you this. Do you believe that gold is an asset? If so, what mechanism do you use to determine its price?

 

[Duke of Marmalade]

Oh please. Of course R&D does involve trial and error. Having found the answer we advance. In crypto the trial and error puzzle is merely to slow down the miners. No advance at all when the solution is found. I am presuming tecate that you do understand blockchain though that comment gives me doubt.

 

[Brendan Burgess]

Do you believe that gold is an asset? If so, what mechanism do you use to determine its price?

He tecate Quite happy to answer, but I will get there by answering you this? Do you or your partner own any gold jewellery? Have you seen any gold artifacts? Have you handled a gold coin? Have you seen any paintings which used gold leaf?

Do you use any products which the industrial process required gold in its use?

So, yes gold has both an industrial and an aesthetic value.

But let me make it quite clear, that if I applied that metric to my Ryanair share certificates, they would be worth zero.

Brendan

 

[tecate]

Oh please. Of course R&D does involve trial and error. Having found the answer we advance. In crypto the trial and error puzzle is merely to slow down the miners. No advance at all when the solution is found. I am presuming tecate that you do understand blockchain though that comment gives me doubt.

Ok, so glad you accept that trial and error helps us to advance technologically. Not sure why you threw your hands up at it initially, though.

As regards what the trial and error involves in cryptocurrency, it isn't what you claim. Firstly there is a whole host of stuff that is being worked on - far too long to post here. You talk of miners and cryptocurrency yet there are many significant projects in cryptocurrency and blockchain that don't involve miners. There are also proof of stake based networks where the mining overhead is not as resource intensive yet there are other significant trade offs. i assume that you mean't proof of work and Bitcoin rather than cryptocurrency generally.

As regards my understanding of blockchain, I'm not a cipher punk, a cryptographer or a developer. I don't come from a professional background when it comes to the nuts and bolts of blockchain. However, I don't have ANY insecurities in asking someone to explain something. Please clarify what it is specifically that leads you to believe I don't understand blockchain? (or I guess specifically which aspect of it I don't understand - because at no stage am I claiming to know everything there is to know about blockchain - or even half of what there is to know...although current life sees me researching aspects of both the technology and the market connected with it - together with other emerging technologies on a daily basis).

 

[tecate]

He tecate Quite happy to answer, but I will get there by answering you this? Do you or your partner own any gold jewellery? Have you seen any gold artifacts? Have you handled a gold coin? Have you seen any paintings which used gold leaf?

Do you use any products which the industrial process required gold in its use?

So, yes gold has both an industrial and an aesthetic value.

But let me make it quite clear, that if I applied that metric to my Ryanair share certificates, they would be worth zero.

Brendan

I don't live a salubrious life, Brendan - so I don't own any gold. However, are you saying that gold doesn't have any value then?...or only that you can't use the same metric to assess its value? If the latter, how do you assess its value?

 

[Brendan Burgess]

No, I am saying that they have completely different metrics for valuing them. Gold has a value to people who like gold jewellery and works of art. If I apply that metric to Bitcoin or Ryanair share certs, they have no value whatsoever.

A financial asset which does not have any aesthetic value such as Bitcoin or Ryanair must be valued by something other than the greater fool theory.

Brendan