Bitcoin in a hyperbolic bubble

[letitroll]

If you can't answer my question, then maybe you can ask 'the authorities' to answer it. ...i.e. how does the G7 banning bitcoin/crypto fix the ransomware issue?

Ban/cripple/hamper whatever......they simply need to make it hugely crippling painful to use and useless for crime & gambling......on ramps / off ramps shut down for crime proceeds..........taxes on crypto gains to put on foot with other assets

The value of crypto and its adoption to date.........has blinded folks like yourself @tecate i think who have a kind of utopian view of whats happening in this space really..........its endearing but ultimately your naive on how puss filed this space really is............my supposition is once the gamblers and criminals leave or are forced out of the network.........the true underlying economic/societal value that underpins 'the BTC network' is very low.......the gamblers, speculators and criminals abandon it......and BTC is back to a couple of bucks a coin.........I believe the experiment is being run right now and we'll find out in time

 

[Duke of Marmalade]

@tecate that interview (love in) with Ross Stevens was truly gut wrenching, I could only stomach 40 mins of it.
Don't tell me this isn't a cult. RS is into bitcoin because of growing inequality, it will help the poor man. It will give personal sovereignty. He quotes a new saint for the cult, some indy driver that refuses to be sponsored by fizzy drinks companies or oil companies, he wants to drive for bitcoin "for the good of humanity", no less. However he is not from the fundamentalist wing, he does not believe that central bankers are the anti christ - no they "mean well", they just can't help their upbringing - he makes this point with "humility and empathy" (Lord forgive them, they know not what they do).

Here are just a few snippets of his nonsense.
Bitcoin is not volatile. Why? because anyone is free to use it as their Unit of Account in which case it would be the dollar that is volatile.
He used to think that there was a real chance of bitcoin going to zero. That is now no longer possible so we have a hugely asymmetrical risk - no chance of zero and no cap to the upside. This does not apply to other crypto which still have a chance to go to zero.
Bitcoin is consistent with Darwin's theory of evolution as it enables reproduction. I'm serious folks, even the sycophantic interviewer had to take two at that.
Gold has not a limited supply, if its price went to $100k the miners would come out in their masses and increase the supply. He asks the interviewer was he aware that bitcoin was totally limited in supply as revealing the third secret of Fatima.
Within a year he sees widespread demand from folk to have at least some of their wages and pensions paid in bitcoin.

 

[tecate]

Ban/cripple/hamper whatever......they simply need to make it hugely crippling painful to use and useless for crime & gambling......on ramps / off ramps shut down for crime proceeds..........taxes on crypto gains to put on foot with other assets

That's completely and utterly unrealistic. It would have to be shutdown in EVERY nation on the planet - every last one - with no exceptions. You have not thought this through - and more alarmingly, you're prepared to trample over innovation along the way. We talk about bitcoin - it's just one project - this measure that you're proposing would include all decentralised crypto projects -and all the use cases that they are being developed to serve.

The value of crypto and its adoption to date.........has blinded folks like yourself @tecate i think who have a kind of utopian view of whats happening in this space really..........its endearing but ultimately your naive on how puss filed this space really is............my supposition is once the gamblers and criminals leave or are forced out of the network.........the true underlying economic/societal value that underpins 'the BTC network' is very low.......the gamblers, speculators and criminals abandon it......and BTC is back to a couple of bucks a coin.........I believe the experiment is being run right now and we'll find out in time

So you've already said and I vehemently disagree with your appraisal. I suggest we park it up there.

 

[tecate]

@tecate that interview (love in) with Ross Stevens was truly gut wrenching, I could only stomach 40 mins of it.

For sure - it must have been incredibly painful watching for someone who has been diametrically opposed to bitcoin/decentralised crypto before he even approached said discussion 4 years ago. Somewhere within that discussion was mention of a 'beginners mind' - that's not something you bring your dukeness.

Don't tell me this isn't a cult.

You can't help yourself, Duke....from the guy who told us that his plan is to have blind faith in central bankers and hope they can figure things out on that basis. The 'In God We Trust' cult.

Bitcoin is not volatile. Why? because anyone is free to use it as their Unit of Account in which case it would be the dollar that is volatile.

FIAT currency has been purposefully and willfully debased since the time of the Romans (when they paired away gold / silver from the coins). In the past 12 months, many of the central bank high priests behind the leading fiat currencies have magic'ed up more $ than has been issued over the course of decades - combined. Are you also a holocaust denier because that's in this territory.

Gold has not a limited supply, if its price went to $100k the miners would come out in their masses and increase the supply.

Once again - the Duke tries to defy proven logic. Bitcoin is perfectly finite. Gold is not. If the cost of gold goes up, then mining becomes more lucrative. If a gold prospect isn't viable today, it may become viable tomorrow should the price go up. We saw this play out with oil - with fracking technology having been developed as a direct consequence - resulting in far more oil being exploited today. If the price of bitcoin goes up, there is no way to extend the supply. Only a prejudiced crank would try to deny that.

All the same old stuff from the guy that when challenged to put the price of a couple of pints at risk on a wager re. bitcoin once again exceeding $20,000, all we heard was crickets. That's the level / strength of conviction you have in this nonsense.

 

[letitroll]

That's completely and utterly unrealistic. It would have to be shutdown in EVERY nation on the planet - every last one - with no exceptions. You have not thought this through - and more alarmingly, you're prepared to trample over innovation along the way. We talk about bitcoin - it's just one project - this measure that you're proposing would include all decentralised crypto projects -and all the use cases that they are being developed to serve.

Never said it had to be or will be shut down in every country - i AGREE that is unrealistic...........it simply will be choked off......the same way company ownership secrecy is choked off to a couple of backwater tax haven islands these days.....even the Swiss were pressured and driven out of their bank secrecy position by the G7 who saw its externalities for society......this movie has been played before.........take a look at the market cap of Credit Suisse .......to see what happens when a significant portion of your users/customers were scumbags and criminals leveraging your superior widget for the proceeds of crime.........the same faith awaits BTC / crypto equivalents.....99% fall in value from BTC's all time high is my bear case

 

[WolfeTone]

(1) Is your supposition that Bitcoin/Crypto has ZERO incremental benefit in the masking of identify, as compared to cash/bank wires in the pursuit of crimes? Please answer.

I honestly do not know as I have never used it for pursuit of crimes.
My gut instinct is that it has zero (or at worst, next to zero) incremental benefit from cash (bank wire, yes) for hiding identity.
Let me elaborate.
I'm of the view that the primary motivator of involving oneself in criminal activity is to enrich oneself (EVC).
But as your twitter feed informs us "... ransomware is the only usecase for crypto..."

So what is the point of illicit activity obtaining bitcoin or any other crypto if you cannot lavish yourself in the EVC?

The ONLY benefit for illicit activity is to convert the ill-gotten goods into $$ - otherwise it is a pointless exercise. This is the same for most illegally obtained, held or stolen goods where the underlying motive is the ESV- bicycles, cars, household goods, dogs, heroin, cocaine etc.
The aim is to move the 'hot' goods into convertible cash to enjoy the trappings of wealth this criminal activity promises.
It may be possible that you have a cash buyer for your bitcoin, but that just demonstrates the equality between bitcoin and cash for identity masking.

The other way ( I accept there may be other ways due to my lack of expertise in crime) is to transfer your bitcoin into a REGULATED exchange, say Coinbase.
And as authorises introduce more regulation then the question of how you came upon such an amount of bitcoin may need to be answered - in the same way as if you lodged a large amount of cash into your account and are asked to prove the means of that lodgement.

and every day this week the authorities back me up

How long so before bitcoin is crushed?

 

[tecate]

Never said it had to be or will be shut down in every country - i AGREE that is unrealistic...........it simply will be choked off......the same way company ownership secrecy is choked off to a couple of backwater tax haven islands these days

Then you understand that in no way shape or form will banning bitcoin/decentralised crypto have the desired effect that you started out with i.e. preventing it being used by those that carry out ransomware.

the same way company ownership secrecy is choked off to a couple of backwater tax haven islands these days.....even the Swiss were pressured and driven out of their bank secrecy position by the G7 who saw its externalities for society......this movie has been played before.........take a look at the market cap of Credit Suisse .......to see what happens when a significant portion of your users/customers were scumbags and criminals leveraging your superior widget for the proceeds of crime..

You have not in any way thought this through. First of all, you're talking about a moving target. As regards the countries that it may be traded out of, how on earth do you think that the US or whomever is going to bring that about? Lets say you drive it to failed states - then what? The US are going to fix all those failed states?

99% fall in value from BTC's all time high is my bear case

I expect an 80% fall from all time high this cycle on the basis that we still have not arrived at that all time high yet. However, my expectation is that this innovation continues to develop - just like it has done in previous cycles. Price action is price action. It does serve some purpose in reeling in new entrants into the eco-system. However, developers get their best work done during bear markets and it's building out the tech and eco-system that is of far greater importance.

 

[WolfeTone]

.......take a look at the market cap of Credit Suisse .......to see what happens when a significant portion of your users/customers were scumbags and criminals leveraging your superior widget for the proceeds of crime.........the same faith awaits BTC / crypto equivalents.....99% fall in value from BTC's all time high is my bear case

What you seem to be suggesting is that authorities will drive out the illicit activity in crypto?
This is a GOOD thing for crypto, it only enhances its reputational status amongst the vastly greater law-abiding public.
Arguably, the negative headlines and unsubstantiated claims of vast criminal activity for bitcoin is suppressing its adoption by many.

 

[WolfeTone]

........take a look at the market cap of Credit Suisse

Just another point about this. Credit Suisse and the wider banking cartel are organisations involved in illicit criminal activity using cash balances as the means.
Cash, bitcoin, poppy plant, coca, hemp, dogs, bicycles, whatever... have never been the problem.
It's what people do with them is the problem.
If authorities 'crush' illicit activity in bitcoin then expect its price to soar.

 

[Duke of Marmalade]

For sure - it must have been incredibly painful watching for someone who has been diametrically opposed to bitcoin/decentralised crypto before he even approached said discussion 4 years ago. Somewhere within that discussion was mention of a 'beginners mind' - that's not something you bring your dukeness.


You can't help yourself, Duke....from the guy who told us that his plan is to have blind faith in central bankers and hope they can figure things out on that basis. The 'In God We Trust' cult.


FIAT currency has been purposefully and willfully debased since the time of the Romans (when they paired away gold / silver from the coins). In the past 12 months, many of the central bank high priests behind the leading fiat currencies have magic'ed up more $ than has been issued over the course of decades - combined. Are you also a holocaust denier because that's in this territory.


Once again - the Duke tries to defy proven logic. Bitcoin is perfectly finite. Gold is not. If the cost of gold goes up, then mining becomes more lucrative. If a gold prospect isn't viable today, it may become viable tomorrow should the price go up. We saw this play out with oil - with fracking technology having been developed as a direct consequence - resulting in far more oil being exploited today. If the price of bitcoin goes up, there is no way to extend the supply. Only a prejudiced crank would try to deny that.

All the same old stuff from the guy that when challenged to put the price of a couple of pints at risk on a wager re. bitcoin once again exceeding $20,000, all we heard was crickets. That's the level / strength of conviction you have in this nonsense.

Well you didn't previously in this thread entirely agree with your new hero. You have admitted that bitcoin is volatile (down 11% today) something to do with a voyage of price discovery, I think you explained (please don't ask me to source). Ross states that bitcoin is not volatile, it is the dollar which is volatile. Have you changed your mind and now agree with the guru?
Do you agree with him that within a year there will be widespread demand for at least part of wages and pensions to be paid in bitcoin?
Can you explain (and do you agree ) that bitcoin will support Darwin's requirement for reproduction? Even the sycophantic interviewer baulked at that.
Try and separate your answers from attacks on me, which of course I do not in any way resent, but they are a distraction.

 

[DazedInPontoon]

A single exchange like Coinbase has 56+ million customers, institutions hold at least 56 billion dollars worth of bitcoin and people still think it's just some kind of underground criminal tool.

(56 must be number of the day)

 

[tecate]

Well you didn't previously in this thread entirely agree with your new hero. You have admitted that bitcoin is volatile (down 11% today) something to do with a voyage of price discovery, I think you explained. Ross states that bitcoin is not volatile, it is the dollar which is volatile. Have you changed your mind and now agree with the guru?

You seem to be struggling with comprehension difficulties so let me help you out. Stevens is saying that if the measure is going to be a conversion from btc to fiat, then given that we've established that fiat has and continues to be debased since the time of the Romans, then of course there will be volatility.

 

[Duke of Marmalade]

You seem to be struggling with comprehension difficulties so let me help you out. Stevens is saying that if the measure is going to be a conversion from btc to fiat, then given that we've established that fiat has and continues to be debased since the time of the Romans, then of course there will be volatility.

You didn't answer my questions. I answer yours. Good night (possibly not in Dodge).

 

[tecate]

You didn't answer my questions. I answer yours. Good night (possibly not in Dodge).

I didn't - because knowing your past form on this subject area, I knew that there was a high likelihood that he didn't say what you claim or in the way that you claim. And sure enough, once again Duke you fail to disappoint. Are you so entrenched in your views that you can't help yourself?

This is what he actually said...


From 15:35 onwards ...he states:

"The most important trades we make are the trades we make with our future self. We all have a Darwinian propulsion towards holding the soundest money possible."
He goes on to say that its instinctive that people don't want to end up with something valueless (i.e. a currency that NOBODY can deny is being continually debased) as it's a threat to our survival. He likens that instinct to the other primal instincts we have as humans.

You twisted that into something that Goebbels or Chemical Ali couldn't possibly match.

On enabling people to buy/obtain bitcoin...He said that his company has partnered with Fortune 500 company FIS - who in turn will enable banking app functionality - such that it will be much easier for consumers to buy and sell bitcoin through the app offered by their current bank. That means that as retail banks offer this functionality, ordinary people feel more secure in purchasing through an organisation they've been banking with already. They're already KYC'ed which is huge as one of the issues holding crypto back in recent years has been the friction involved with people having to go to the trouble of opening up separate crypto exchange accounts with entities that they're not familiar with/don't trust - and with interfaces that are intimidating (as they're built for traders rather than your ordinary Joe).

On retail bank credit cards, the option to receive rewards in BTC will be enabled. There are already two startups in the rewards space that offer rewards in BTC ( fold.app & Lolli ) and they've been doing really well - it's an area that's expected to grow rapidly.
On the timeframe for these developments, he stated that nothing happens fast in banking but his expectation is that the first banks to do this will do so in 2022.

In the insurance business, he foresees a scenario where the consumer will be given the option to elect to receive 10% of their monthly annuity in bitcoin. He then foresees a scenario in the future where employees can elect to receive 5 or 10% of their salaries in bitcoin. In terms of timeframe, all of that he says is coming in the next 12 to 24 months. That's what he actually said.

Do I believe that this will happen within that timeframe? We already know that banks are gearing up to offer bitcoin. If he means that the first signs of that will show up in the next 12-24 months, then that seems entirely plausible. Bear in mind that my expectation would be that such an eventuality would start with progressive tech companies in the US.

 

[WolfeTone]

US inflation, reasons to be worried

Here is one for the CB cultists. The language in this says it all. But due to the life-long indoctrination, the faith, it passes for reasoned logical comment.
Not so much the commentator himself but rather the comments from CB.

In case you hit a paywall;

"It would be fair to conclude that inflation expectations are moving up. But, at current levels, they will not concern the Federal Reserve all that much..."
- Well, that's ok then. As long as CB is not concerned then there is nothing for anyone to be concerned about?

"... as Jay Powell, Fed chair, said last August, “we will seek to achieve inflation that averages 2 per cent over time. Therefore, following periods when inflation has been running below 2 per cent, appropriate monetary policy will probably aim to achieve inflation moderately above 2 per cent for some time.”

What is he talking about? What does "averages over 2 per cent over time " mean? How much time is he talking about?

"Therefore, following periods when inflation has been running below 2 per cent, appropriate monetary policy will probably aim to achieve inflation moderately above 2 per cent for some time.”

So how long has this period of inflation to last? What is 'moderately above 2%'?

Here we go:

"Because inflation has fallen short of the goal by a cumulative total of 5 percentage points since 2007, this could justify, say, 3 per cent inflation for five years, before a return to 2 per cent."

So having failed to reach a 2% target on average over the last 14yrs (average was 1.65%, or 17% short of the target on average, every year, for 14yrs) it is now suggested that a 3% would be sustainable for 5yrs before returning to 2% (the target that has not sustained for 14yrs).

Perhaps I'm being a little harsh? Perhaps an average of 1.65% instead of average of 2% over 14yrs isn't such a bad result considering the innumerable variables of an economy so big?
On the face of it probably not, not to the faithful anyway. But are there any other factors worth considering? The commentator highlights four factors of concern. This is the most significant.

"The government and substantial swaths of the private sector have huge debt liabilities and borrowing plans."

So while CB's were celebrating and congratulating themselves on 'managing' inflation, that inflation was being exported as debt onto the balance sheets of sovereign, corporate and individuals disproportionately boosting asset prices.

Speaking of volatility, it is said here that the depreciation of US$ is 2% pa over the long term.

Somewhere between 20-25% of all US dollars circulating were printed into existence were in 2020.
In order to sustain an average 3% inflation rate over next 5yrs, CPI basket of goods will have to near double in price in that period.

Good luck 'managing' that (average) 3% inflation rate target.

 

[tecate]

US inflation, reasons to be worried

Here is one for the CB cultists. The language in this says it all. But due to the life-long indoctrination, the faith, it passes for reasoned logical comment.
Not so much the commentator him but rather the comments from CB.

These last two sentences from the article you quoted from, Wolfie:

" It is hard to believe these emergency monetary policies should continue for years, as many at the Fed think. I doubt whether they should continue even now."

There's no doubt but that this monetary expansion has assisted the crypto price upswing. In crypto circles, the notion of the central bank high priests tapering off the magic money is being considered as a threat to this bull run. However, many believe that they simply won't be able to. They tried that after the last financial crisis and quickly did a u-turn. We're in the age of free money and universal basic income (UBI).

 

[Duke of Marmalade]

@WolfeTone
I am addressing you here as @tecate is in pure denial mode. This is what his latest bitcoin evangelist actually said.

We have a Darwinian propulsion to want sound money. Think of it with unsound money we have no food, no shelter, no mate, no reproduction.

The interviewer sums up this theory by observing that “reproduction is important”.
I kid you not Wolfie.
I ask @tecate does he agree with this Darwinian theory, and he calls me Goebbels/Chemical Ali. Sure sign he is squirming.

There were a number of points where I agreed with the prophet.
Bitcoin is worthless of itself, its only value is as a medium of future exchange
Other cryptos have a very real chance of going to zero
Central bankers are well intentioned.

 

[WolfeTone]

The interviewer sums up this theory by observing that “reproduction is important”.
I kid you not Wolfie.

Yes I watched it. It was in the context of philosophising about money. What it is and what it does. He wasn't specifically referring to bitcoin with the exception of describing it as hard money (something that holds its value over time) being of greater value than soft money (that what loses value over time). Bitcoin is hard money.

In a modern context, in Ireland and other developed economies, no food, shelter, mate, reproduction, is manifesting itself in unaffordable housing prices, extortionate rents, negative interest rates on deposits, subdued wages increases, reduced family size, delayed family planning.
"Slumming it", the "long commute", living in digs etc, is no longer the preserve of the 20-somethings, it is firmly embedded into a significant portion of the 30-something population. That portion of the population who had realistic expectations of starting families etc are being put on the long-finger. Instead they are living at home sustaining the pension fund of mum for longer and longer.
By themselves, or even with a partner, they cannot sustain an affordable independent lifestyle that puts food on the table, providing shelter and starting a family.

CSO Average age of mothers

 

[Duke of Marmalade]

Yes I watched it. It was in the context of philosophising about money. What it is and what it does. He wasn't specifically referring to bitcoin with the exception of describing it as hard money (something that holds its value over time) being of greater value than soft money (that what loses value over time). Bitcoin is hard money.

In a modern context, in Ireland and other developed economies, no food, shelter, mate, reproduction, is manifesting itself in unaffordable housing prices, extortionate rents, negative interest rates on deposits, subdued wages increases, reduced family size, delayed family planning.
"Slumming it", the "long commute", living in digs etc, is no longer the preserve of the 20-somethings, it is firmly embedded into a significant portion of the 30-something population. That portion of the population who had realistic expectations of starting families etc are being put on the long-finger. Instead they are living at home sustaining the pension fund of mum for longer and longer.
By themselves, or even with a partner, they cannot sustain an affordable independent lifestyle that puts food on the table, providing shelter and starting a family.

CSO Average age of mothers

Another heroic try Wolfie. Believe me if bitcoin was the mainstream currency of choice we would be in a far far worse condition. We have learnt that a fixed money supply is not fit for purpose (meeting the needs of technology driven superfast growing economies) just as we have learnt that the horse is not fit to be the transport of choice.
On Ross Stevens, he is quite clear that it is bitcoin which he adulates, he is actually scathing of other cryptos.
I am not downplaying the social problems you allude to though maybe I will have a try. Compared to almost any previous period in history they are modest. I am thinking Ireland in the 1920s, 1930s, 1940s, 1950s, 1960s, 1970s, 1980s. Now in the 90s/00s we did seem to go into hyperdrive but that looks like an illusion with hindsight and yes it was partly fuelled by the monetary phenomenon of low euro interest rates.
If you believe that all those previous periods would have been ones of economic bliss, or even better than they were, if only we had a fixed money supply, well I can't prove you are wrong, but I profoundly believe that to be the case.

 

[WolfeTone]

We have learnt that a fixed money supply is not fit for purpose

I'm not disputing this. This is why I dont advocate that bitcoin will replace central banks.
I do think it has potential to put manners on central banks.
I accept the fluidity of the fiat system has many benefits, but let's not get bogged down in the advancement of humankind since the dawn of time most of a which a central bank was neither here nor there.

The crux of the issue, as I see it, is the operation of a sound monetary system. The system, as it operates, is commandeered by central authorities and a banking cartel.
The bond market and the stock market long being revered as the signalling mechanism to central authorities of any particular fiscal or Monetary policy applied.
Joe soap public would just go with the flow, hoping to be on the right side of policy decisions implemented for the "greater good" or "well intended" as Ross mentions. And in this part of the world we can say with confidence that we have, in the main, been served well.
But as the saying goes, past performance is no guarantee of future returns... and in the quest to deliver in the name of the greater good it would be wrong not to acknowledge that there have been casualties as a consequence of policy decisions implemented by central authorities. At an extreme end, the rise of fascism in Europe in 1930's is testament to that.
But where is the option to dissent at an individual level? Where is the option to decide that the central policies of tax, or interest rates, are not reflective of the actual events that any particular individual, anywhere, is experiencing.

A critical element of any developing economy and society.