Key Post Bitcoin is a clearly identifiable economic bubble

DublinHead54 said:
I also think in general this whole Web3 and multiple Layer2's has just over complicated the entire ecosystem. I struggle to keep up and think this overall impacts adoption rates.
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I think this is a vaild point. The whole thing is just difficult to understand and not worth the hassle for the vast, vast majority of people. It's a lot easier to use Mastercard or even Revolut.
 
Well if Smithers is bringing him his cornflakes then the @Duke of Marmalade is well advised.

You do know that Andrew Smithers is one of the best regarded investment economists of the last 30 years. https://www.ft.com/andrew-smithers
 
Unfortunately we are currently in a everything Bubble

But you must admit Crypto has come down a lot from its highs but property and shares are still going up

Stocks Bubble
Property House/Land Bubble

Nothing goes up for ever .
 
DublinHead54 said:
I wouldn't classify an ETF as general use
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I agree. However, a secondary effect of an ETF may be to make general use more attractive if volatility is reduced.

DublinHead54 said:
An ETF is an investment product, which in my opinion takes BTC further away from its intended use as a global decentralised currency.
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"Intended use" is something that has been discussed here in the past in detail. At the end of the day, BTC has a few uses. Primary among them are use as a decentralized currency and use as a decentralized store of value. I agree that there's nothing decentralized about an ETF and there are some risks if such products accounted for too large a proportion of overall BTC holdings.

Yes, there's a risk here and I've come across plenty of chatter re. the impact this may have on crypto exchanges. I see it as an inevitability that the bigger platforms offer these products whether its through ETFs or by listing individual digital assets. That said, you say that it pulls people away from the 'crypto' ecosystem. I'm not a BTC maxi, I try to keep an open mind on projects but I believe that 95% of them vaporize over the longer term anyway. Many believe that 'crypto' has just been a distraction from the development of bitcoin as an asset.

Beyond that, this is the reason that an ETF is not the holy grail. It has to be one of a myriad of advances in furthering adoption (directly or indirectly). One thing that gets lost here a lot is that people look at this from the perspective of their own scenario in Ireland. Bitcoin is a global asset. Reasons to use the asset differ from place to place.

DublinHead54 said:
If we are just using a price target as an indication of adoption, I don't fully agree with that.
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I kinda-sorta agree with you. I mean if its for a store of value use case then it has significance....working it back to overall market cap rather than a focus on the unit price per se.

DublinHead54 said:
I don't think BTC can be both an investment product and a currency at scale.
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Why?

I can't discount that. I think the eventuality is an inevitability whatever the rationale is for bringing it about so we'll have to see. As I mentioned at the outset, I'm conscious of the fact that Wall Street has long since captured the gold market and manipulated its price.

DublinHead54 said:
I also think in general this whole Web3 and multiple Layer2's has just over complicated the entire ecosystem. I struggle to keep up and think this overall impacts adoption rates.
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I don't disagree with that. I think though that it will settle eventually. I also think that ever better product will be built to bring it to the ordinary Joe in a much more seamless way.

I agree with plenty of the concerns you've raised there. That said, its for these reasons that I've said that an ETF (with both the risks/benefits that it may bring) is one of a whole host of items that need to happen to further adoption (directly and indirectly).
 
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cremeegg said:
Well if Smithers is bringing him his cornflakes then the @Duke of Marmalade is well advised.

You do know that Andrew Smithers is one of the best regarded investment economists of the last 30 years. https://www.ft.com/andrew-smithers
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Fair point although I was thinking Waylon here rather than Andrew
jumper1 said:
But you must admit Crypto has come down a lot from its highs but property and shares are still going up

Nothing goes up for ever .
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And you must admit that you're measuring that from it's last ATH price and working on from there. Zoom out and you'll see that its going up and to the right. As regards 'nothing goes up forever', I would say that if the measure of how it goes up is in pairing it with the USD (or any other fiat currency), then it will continue to go up due to the non-finite nature of those currencies. Otherwise, if we accept that bitcoin hasn't reached maturity, that means that there's an expectation of further use going forward. If there's further use, then that means more demand. More demand on a finite asset.....you can figure out the rest.
 
Duke of Marmalade said:
no prizes for guessing that it will convince me that this is all one massive self* delusion.
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Given your even-handed approach to the topic, I wouldn't expect anything less Duke. I wouldn't bother using the 'convince' word though. I highly doubt there's anyone out there trying to convince you of anything! I certainly am not.

Duke of Marmalade said:
Jackdaws are known to find intrinsic value in things that glitter.
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However, I had complete faith in you that you'd be sufficiently triggered to come out with this pure gold (or glitter as the case may be). I know it will be inconvenient to your need to discuss jackdaws for me to point out that intrinsic value doesn't come about without an evaluator - that evaluator being human. I do apologize. But the point stands. Someone mentions intrinsic value of gold as jewelry then why can't another group of people determine ease of transmission, decentralized cross border transmission, etc. in the same way relative to bitcoin.
 
tecate said:
Why?
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Simply as an investment will always need to be quoted vs Fiat currency to measure success of the investment vs as use as a currency it is intended to be quoted in BTC / satoshis.


What are some of the other top items?
 
DublinHead54 said:
Simply as an investment will always need to be quoted vs Fiat currency to measure success of the investment vs as use as a currency it is intended to be quoted in BTC / satoshis.
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I don't see that as an issue at all. BTC doesn't need to replace fiat. It needs to be an easily available option alongside it, to keep it in check (and anyone who wants a well managed fiat should want that too). I don't really care what the unit of account is. There are plenty of wallets that will very seamlessly calculate the conversion when using whatever fiat currency as the unit of account.

DublinHead54 said:
What are some of the other top items?
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Making further in-roads re. merchant adoption. It needs to appear in POS systems alongside all of the other existing payment options.

Greater levels of education re. bitcoin, how to store it, transact with it, etc. In El Salvador the government has gotten behind the addition of Bitcoin into the school curriculum, covering all of these basics. There's also an NGO running its own educational program there. Over the longer term, that will be meaningful.

The development of more of these community-based circular bitcoin economies is useful from the point of view of education and bringing BTC to ordinary folks in the developing world. Since those developments in El Salvador, similar initiatives have popped up in Brazil, Honduras, Guatemala, The Philippines, Vietnam, South Africa and Costa Rica. I'd like to see these develop further. Another couple of developing nations recognizing bitcoin as legal tender wouldn't hurt either (although the IMF is throwing its weight around, warning them all off taking this route).

I believe there's also a problem to be solved in terms of self custody. It's a feature and benefit but one that comes with great responsibility and one that these last couple of generations are not used to. We're used to having a centralized entity to fall back on when losing access to a system. There needs to be a manner in which this can be tackled to ensure self custody while taking the risk of losing access out of the equation.

User experience needs to improve also in terms of wallets. And as regards Bitcoin's layer 2 (Lightning), there are plenty of issues that have yet to be ironed out.

Network effect can be difficult to achieve but so long as that network effect is expanding (as it has been), then it can get to where it needs to be. I'm fully on board with the use of bitcoin and based on the part of the world I'm located in, to use it more frequently would be very much worthwhile for me (much less so if I was in Ireland). But I need more people using it - so that I can use it more. It's like the roll-out of the phone back in the day. If you and I had a phone but nobody else did, then that's useful but not that useful. If everyone has a phone, then its exponentially more powerful. Network effect.

If more folks hold a little bit of BTC in a digital wallet, then dependency on exchanges will also fall - as at that point, people can exchange it between themselves with much more ease.

Demographics also plays a role. I had someone approach me recently - wanting to know how he could move $ from one country with capital controls to another country with capital controls using bitcoin. The guy was 60 and not technically savvy. I told him to do it the old school way and walk it in, which still left him with plenty of red tape on the other end (because otherwise I'd literally have to do it for him and that wasn't practical, nor did I want to). The money was clean but folks in Ireland have no idea what nonsense exists in developing world banking systems (which is very relevant in terms of use case for bitcoin). Imagine he had to make four cross-border journeys to do this - the time that took, the security risk and the cost?

The generation coming up behind us will be entirely digitally native. That makes a difference and with that, I believe that it will be much easier to bring about adoption via that demographic.
 
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Fair enough, I don't think it is that simple. As using it as a currency unless everything in the trade lifecycle is valued in BTC as the base currency rather than just quoted in BTC then it will be subject to price variations. Also as you mentioned an ETF = Wall Street and the potential for manipulation.
 
DublinHead54 said:
Fair enough, I don't think it is that simple. As using it as a currency unless everything in the trade lifecycle is valued in BTC as the base currency rather than just quoted in BTC then it will be subject to price variations.
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There's an ever growing group of people having to deal with that issue, living in one country and getting paid in a different currency. It's also a feature of trade lifecycle if there's an international element to that (which oftentimes there is). It's a difficulty but not a show stopper. This is also where broadening the market cap via the other store of value use case can be helpful (as it should reduce volatility).

DublinHead54 said:
Also as you mentioned an ETF = Wall Street and the potential for manipulation.
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100%. Bitcoin doesn't exclude anyone from using it. It's always been inevitable that there would be more involvement from Wall Street. We'll have to see how a combination of the core features of bitcoin together with the community that has gathered around it can stave off any potential damage here. At the very least, due to its nature, its far less open to manipulation than gold has been...but we won't know precisely how this plays out until it happens.
 
jumper1 said:
Maybe Bitcoin is not the .com of the 2020's maybe its AI .
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I don't think there's an either/or as regards what technology/innovation ends up being successful. I think that the impact of AI will be far bigger but that in no way detracts from the impact that blockchain and decentralized money/systems can have. We have a perfect storm of new tech coming to the fore between blockchain, AI, IoT, 5G, etc. I'd also imagine that there will be innovation arising that combines these different technologies.
 

Agree, Bitcoin has been great at effectively being borderless, and solving the remittance cost problem. I do think at times this is part of the whole 99% vs 1%, the issue of cross border remittance has impacted generally immigrants and thus it's never been a big enough issue for Banks or other players to fix.
 

Interestingly I read somewhere the other day that usage of Chat GPT has started to decline.

Observationally when banks looked at adopting blockchain the main driver in my opinion was to cut staff and costs, not because the technology was (potentially) better. I think the approach for AI is the same, the question asked is 'how can I use this to cut costs' rather than 'how can I use this to make the service better'.

I think if you are building a product from scratch you will consider a blockchain solution, but for large corporations with legacy piecemeal systems the lift is too much to replace systems that work ok.
 
It's a pity it uses more energy than Norway though
 
tecate said:
Given your even-handed approach to the topic, I wouldn't expect anything less Duke. I wouldn't bother using the 'convince' word though. I highly doubt there's anyone out there trying to convince you of anything! I certainly am not.
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I got to page 4 of this paper and was in danger of becoming physically sick, so going no further.
It finds that its model would require actors to have infinite exposure to bitcoin funded by infinite shorting of equities/bonds. They admit this is not realistic and so they arbitrarily "tweak" the model so that bitcoin has a normal expectation to fall by 90% p.a. but this is compensated by the 1 in 1,000 "bliss regime" where bitcoin goes into the millions that the earlier posted spoof math came up with. Let me explain that again. Even if your normal expectation is that bitcoin will decline by 90% p.a. it still has a valid place in your portfolio because of the 1 per 1,000 chance of the "bliss regime".
I kid you not folks. And this so called mathematical development is peppered with fancy terms like skewness and much fancier and of course with references to learned works. So how did they get to this preposterous conclusion? Well they took as their data base a price trajectory from 1 pizza per 5,000 bitcoin to $30k per 1 bitcoin in 12 years. That's about a 10 million fold growth in 12 years. They then used this data to come up with a mathematical model for the future trajectory. You could do the same for Amazon, I guess.
No wonder Blackrock give a blood curdling disclaimer for this insane, pretentious hubris from folk fronting as Blackrock staff.
 
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Having spent the last few years in the developing world, it's not something that will be fixed willingly - just in case anyone thinks, ah sure they'll just fix it and put paid to these crypto fools. They'll continue with the grift. In the same way as some central banks/currencies behave better than others. Very hard to change very well developed (mis-) behavior.

DublinHead54 said:
I think if you are building a product from scratch you will consider a blockchain solution, but for large corporations with legacy piecemeal systems the lift is too much to replace systems that work ok.
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Isn't this where the big banks have come unstuck, bogged down by rickety systems that they can't get out from under while challenger banks have taken to eating their lunch?

Duke of Marmalade said:
I got to page 4 of this paper and was in danger of becoming physically sick, so going no further.
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Sounds like there were half digested crunchy nut flakes everywhere. Not good Duke.

But how could this have happened? I mean, the BlackRock sort, in my case, I'd spit on them but they're your Brethren. I've been very careful to curate citations to meet your 'high standards' and I get shouted at if I ever link to anything coming from the great unwashed (crypto peeps). But this was from three bigwigs in the world's biggest asset manager. Extraordinary.

So they shouldn't have worked back from the pizza purchase? When was it @JimmyB99 said you first said it was a no-no? $180? Could they have started from there instead?

Duke of Marmalade said:
No wonder Blackrock give a blood curdling disclaimer for this insane, pretentious hubris from folk fronting as Blackrock staff.
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Yeah, I could have this all wrong but I'd imagine 99.999% of such reports would ordinarily contain such a disclaimer.
 
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DazedInPontoon said:
Here's the thing though, this is the data, it actually happened.
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I am not questioning the data. I am questioning the assumption that any mathematical fit for this phenomenal performance is in any way a pointer to the future. What if the data analysis started at ATH of $67k? More relevantly I am sure a mathematical fit for Amazon's performance since its launch would also demonstrate amazing "skewness" and it too would suggest 1 in 1,000 "bliss" scenarios where Amazon is bigger than today's whole stockmarket cap combined.
I meant it when I said that I have respect for your rational approach in these matters. I do not believe that you accept that even if an investor expects bitcoin to fall by 90% p.a. that the 1 in a 1,000 chance of a "bliss" scenario justifies having it in a portfolio. Please say you do not go along with that.
 
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Fidelity make the point today that Bitcoin is just a young scut by comparison with present day Facebook. Presumably they'd say the same thing about Amazon.
 
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