"Comparing Bitcoin to Ponzi Schemes is unfair...

[tecate]

What does that mean? There are currently c. 2,000,000,000,000,000 satoshis in existence. How many ounces of gold? Or are you referring to atoms? Be a bit more precise.

I can tell you unequivocally that as per the bitcoin protocol, its designed to never exceed 21 million bitcoin. I see you've gone for the extreme fractional representation - in which case I would like to ask - if you continue slicing up a pizza, do you suddenly have more pizza than when you started? Now lets talk gold. I could ask you how much gold there is in the world - but I won't because you won't be able to give me an answer.

And then we have the 2,000 crypto lookalikes. Gold's lookalikes can be counted on the fingers of one hand.

Of the 2,000 crypto projects - only a handful have been designed to take on a store of value/money use case. Of that handful, none can match bitcoin's network security. Those that are direct replicas have at one time or another been compromised on the basis of network security. And then there is network effect. Bitcoin is a trillion dollar asset. I'm open to it being usurped but its reasonable to expect that not only will the challenger have to match bitcoin's abilities it will need to be 10x better to usurp it at this stage.
Why is gold more valuable than other commodities? Because it has two key characteristics - durability and scarcity. Bitcoin possesses these characteristics and many more besides.

Admittedly the protocol limits the supply of bitcoin, but my understanding is that even this is not immutable.

That's correct. However, I'd encourage you to take a closer look at bitcoin development. Whereas other crypto projects take a move fast and break things approach, bitcoin development is insanely conservative and slow - and achieved by consensus. In theory, its possible that the cap could be changed in the same way as its possible yet incredibly unlikely that all participants to this discussion take the decision to cut off their ears. It's incredibly unlikely that any bitcoin user would ever want bitcoin to be anything other than a fixed cap digital asset - it's a fundamental prerequisite to what gives it utility and value.

 

[Duke of Marmalade]

@tecate Still, what do you mean that it is scarcer than gold? I'll grant that its supply is more limited but why do you say scarcer?
I once got censured by the moderators for suicide reference; just a warning, though admittedly reading some of these threads could be dangerous in that regard.

 

[tecate]

@tecate Still, what do you mean that it is scarcer than gold? I'll grant that its supply is more limited but why do you say scarcer?

As a fixed cap digital asset, bitcoin's scarcity is absolute. Gold's scarcity is not absolute - that's why you can't provide an answer to the question of how much gold exists. Current gold supply averages out at around 2% /year. However, there's nothing preventing a supply shock. If the price of gold goes up, then the means by which to extract it intensify. If the price of bitcoin goes up, the supply remains the same. Nobody can manipulate that.
Bitcoin is also auditable via a public blockchain. Gold cannot be audited very easily - which is how Wall Street has manipulated the gold market via paper gold products that don't have actual backing with physical gold as they should.

I once got censured by the moderators for suicide reference; just a warning, though admittedly reading some of these threads could be dangerous in that regard.

Ok, no worries - I've amended the analogy provided.

 

[Duke of Marmalade]

As a fixed cap digital asset, bitcoin's scarcity is absolute. Gold's scarcity is not absolute - that's why you can't provide an answer to the question of how much gold exists. Current gold supply averages out at around 2% /year. However, there's nothing preventing a supply shock. If the price of gold goes up, then the means by which to extract it intensify. If the price of bitcoin goes up, the supply remains the same. Nobody can manipulate that.
Bitcoin is also auditable via a public blockchain. Gold cannot be audited very easily - which is how Wall Street has manipulated the gold market via paper gold products that don't have actual backing with physical gold as they should.


Ok, no worries - I've amended the analogy provided.

You are talking potential supply, not scarcity. Rockets for space tourists are extremely rare, though in theory they have unlimited supply potential.
I agree that the prospect of bitcoin participants cutting off their ears is remote though they do seem to be deaf to the academic community talking common sense.

 

[tecate]

You are talking potential supply, not scarcity. Rockets for space tourists are extremely rare, though in theory they have unlimited supply potential.

Hmm...there's still quite an important distinction between scarcity and absolute scarcity. If supply is open to being variable, then that has consequences in terms of overall scarcity.

I agree that the prospect of bitcoin participants cutting off their ears is remote though they do seem to be deaf to the academic community talking common sense.

Seeing as its Christmas Eve's Eve, I'll give you points for that one for entertainment value.

 

[DazedInPontoon]

Meanwhile in NFT-land...

I think we can all find common ground on this one.

 

[time to plan]

to Ponzi Schemes"


Search for

Why bitcoin is worse than a Madoff-style Ponzi scheme​

and you will get to the article in the FT.



the longstanding sceptical view by many economists and others that what bitcoin really is, in effect, is a Ponzi scheme. Brazilian computer scientist Jorge Stolfi is one voice who has contended this. His view is based on the following observations: Investors buy in the expectation of profits. That expectation is sustained by the profits of those that cash out. But there is no external source for those profits; they come entirely from new investments. And the operators take away a large portion of the money.

It's ridiculous to call BTC a Ponzi scheme. It's a pyramid scheme.

 

[time to plan]

As a fixed cap digital asset, bitcoin's scarcity is absolute. Gold's scarcity is not absolute - that's why you can't provide an answer to the question of how much gold exists. Current gold supply averages out at around 2% /year. However, there's nothing preventing a supply shock. If the price of gold goes up, then the means by which to extract it intensify. If the price of bitcoin goes up, the supply remains the same. Nobody can manipulate that.
Bitcoin is also auditable via a public blockchain. Gold cannot be audited very easily - which is how Wall Street has manipulated the gold market via paper gold products that don't have actual backing with physical gold as they should.

So if there were a quintillion times as many bitcoin, it would still be scarcer that Gold.

 

[Marc]

Ok folks here is our take on this

Cryptocurrency: Should you invest? - Everlake

globalwealth.ie

You need to separate the potential future benefits of the blockchain from the clear pump and dump/pyramid scheme characteristics of cryptocurrency.

We looked hard to find any justification to put money into this and can’t find one. It’s a classic speculative bubble and those late to the party will lose their shirt.

Those who argue that it’s different because of some Symantec technicality probably have a stake they are trying to pump.

It’s not regulated and when it goes south you will have nobody to blame but yourself. You have been warned

 

[tecate]

So if there were a quintillion times as many bitcoin, it would still be scarcer that Gold.

It's scarce because they're not making any more of it. They're not making any more gold either - giving it its primary value-instilling characteristic - scarcity. The distinction is that bitcoin's scarcity is absolute - gold's is not. If the price of any conventional commodity goes up, supply is more likely to increase. That's not the case when it comes to bitcoin. There continues to be growing acceptance within conventional finance of its position alongside gold as a store of value, an acknowledgement that it has taken a certain market share away from gold and a belief that it's likely to take more.
Your earlier pyramid claim has been covered comprehensively. If you believe it to be a pyramid scheme, fair enough.

You need to separate the potential future benefits of the blockchain from the clear pump and dump/pyramid scheme characteristics of cryptocurrency.

So blockchain, not bitcoin? I feel like I'm back in 2017.

We looked hard to find any justification to put money into this and can’t find one. It’s a classic speculative bubble and those late to the party will lose their shirt.

People do tend to get out ahead of their skis where tech-based hype cycles are concerned. However, I'd hardly call this a 'classic' speculative bubble. Bitcoin has been through a number of these cycles before. Each time it was written off. Each time, it carried on from where it left off. I'm not aware of the well known classic speculative bubbles of the past that followed that pattern.
There will be more of those events - although they may not be as pronounced where bitcoin is concerned by comparison with crypto generally. I think anyone would be wise to be mindful of any market becoming incredibly frothy - whether its bitcoin, crypto generally or any other market.

Those who argue that it’s different because of some Symantec technicality probably have a stake they are trying to pump.

The opposite could also be said. i.e. those that are not vested in it having not done their homework when they first wrote it off have an interest in perpetuating that original line of thinking and argument that its the same as tulips/ponzis/pyramids, etc.
To write off any merits as semantics doesn't seem reasonable to me. In this instance, there doesn't seem to have been any upside found whatsoever. I'm discounting the 'blockchain not bitcoin' finding as that is akin to suggesting 'intranet not internet' (which was something that played out back in the dot com times). If there's a suggestion that centralised blockchain is beneficial - then that's wayward - as centralised blockchain equals a run of the mill database. If we're talking about decentralised blockchain, then we're talking about one or more of the crypto projects that have been written off in your analysis.

It’s not regulated and when it goes south you will have nobody to blame but yourself. You have been warned

People should be cautious in their approach and do their own due diligence. As I've mentioned many times, I'm fully accepting of the notion that bitcoin could fail (although the idea that it's going to go to zero has become more and more unrealistic to me over the course of these discussions here). I've no doubt that there will be periodic price resets - as there have been in the past.

What I'm not accepting of is the notion that it will go to zero come what may. Several folks here have insisted that there is no conceivable way that bitcoin can continue to develop and continue to succeed. Not to be open to the possibility of its ongoing development/adoption is wayward to my mind.

On the suggestion of 'nobody to blame but yourself', I agree. As far as I'm concerned, that's exactly the way it should be. Ordinary people are deprived of the ability to invest in opportunities at a very early stage. Bitcoin/crypto has represented the first occasion when an asset class has been brought up to trillion dollar market status by the sheer will of retail investors/participants. Wall Street didn't have a hand in it - as they've always had in everything else. In the US VCs and accredited investors have the opportunity to invest in projects at an early stage. The ordinary joe is excluded for his own good. People come down on either side of the argument, but my view is that everyone should have the opportunity to invest in whatever they like - and everyone should take responsibility for their own actions. I don't believe in governmental hand holding in that instance. If there is something positive that could be done though, its to teach investment/economy/banking/financial markets basics in our schools. Although maybe that would be too disruptive...

 

[tecate]

It seems that the guys n gals at the KPMG Canada office have been carrying out research whilst sitting on the toilet scrolling social media. Who knew..

 

[Duke of Marmalade]

This is it! The moment the cult has been waiting for. The Toronto office of KPMG have decided to court cultists. Where 1 goes the other 10s of thousands of accountancy offices must surely follow.
Add this to the long list of institutional adapters - Microstrategy, Tesla etc.

 

[tecate]

This is it! The moment the cult has been waiting for. The Toronto office of KPMG have decided to court cultists. Where 1 goes the other 10s of thousands of accountancy offices must surely follow.ssing
Add this to the long list of institutional adapters - Microstrategy, Tesla etc.

10s of thousands? I think its a case of whether the other three want to do themselves a similar favour. Now I don't really give a fiddlers if they do or they don't but c'mere and tell me...will they be in the karzy - whilst on twitter - when the dam bursts and they have a similar eureka moment?

 

[Duke of Marmalade]

10s of thousands? I think its a case of whether the other three want to do themselves a similar favour. Now I don't really give a fiddlers if they do or they don't but c'mere and tell me...will they be in the karzy - whilst on twitter - when the dam bursts and they have a similar eureka moment?

Headquartered in Amstelveen, Netherlands, although incorporated in the United Kingdom, KPMG is a network of firms in 145 countries

Offices in 145 countries and no less than 72 in US alone but hey the Toronto office chasing cult business is big, big news for cultists.

 

[tecate]

Offices in 145 countries and no less than 72 in US alone but hey the Toronto office chasing cult business is big, big news for cultists.

Well said Duke. They don't have an M.Sc. between the lot of them in that Toronto office. They should send out one of their top bean counters from Amstelveen to put this sort of thing down. Maybe he/she can take the toilets out - clearly it's where all the social media scrolling is done and where the big ideas are coming from. Can't mess around with this sort of stuff - what with the risk of contagion.

 

[DublinHead54]

I think these headlines are a bit clickbait and don't paint the full picture. I assume that any bitcoin held represents a small portion of the treasury assets and not an indication that firms are moving away from cash or other assets. It would be completely foolish for a corporate treasury function to put all its assets into Bitcoin, just like it would be to hold it all in cash.

The purpose of the treasury function is.....Treasury involves the management of money and financial risks in a business. Its priority is to ensure the business has the money it needs to manage its day-to-day business obligations, while also helping develop its long term financial strategy and policies.

Case Study:

MicroStrategy (Nasdaq: MSTR), the business-intelligence software company that’s taken to accumulating bitcoin, said it 1,914 bitcoins between Dec. 9 and Dec. 29 for about $94.2 million in cash.

• The company paid an average price of $49,229 per bitcoin, it said in a statement
• As of 9th Feb the 1,914 bitcoins are valued at ~$84m a ~11% devaluation
• The value dropped to a low of ~63m a ~33% drop
  
  
  It would not make sense to manage a business with this level of volatility, and thats why treasury functions don't manage their assets in Stocks. All this shows is that the technology is strengthening that corporates can now hold it via 3rd party custodies, its not an indication that fiat cash is becoming useless in my opinion.
  
  
  
  
  

 

[tecate]

So long as folks read the complete article - beyond the headline - then I don't think that there's any case of 'clickbait' or misdirection.

The significance of the development is not so much KPMG Canada's use of BTC/ETH as a treasury asset themselves ( they didn't disclose how much they've put on the balance sheet - it could be diddly squat ). What's important is the IP they're developing with regard to the use of digital assets as a treasury asset - combined with their expertise in navigating taxation/regulation. We're seeing greater moves towards enabling digital assets beyond the curtailment that current taxation rules place on them. The likes of KPMG will have its own role to play in that process. It will also be better placed to advise corporates who want to utilise digital assets as a balance sheet constituent going forward.

It's an individual - but not insignificant building block. In the same way as Square enabling lightning network on its own platform and in effect onboarding 70 million users onto the network is another individual yet significant development (coming at it from a completely different perspective entirely). Or take the emergence of Blackrock's (worlds largest asset manager ) plans to facilitate the trading of bitcoin on its platform. Individually, not such a big deal - collectively, all these developments matter.

 

[DublinHead54]

So long as folks read the complete article - beyond the headline - then I don't think that there's any case of 'clickbait' or misdirection.

The significance of the development is not so much KPMG Canada's use of BTC/ETH as a treasury asset themselves ( they didn't disclose how much they've put on the balance sheet - it could be diddly squat ). What's important is the IP they're developing with regard to the use of digital assets as a treasury asset - combined with their expertise in navigating taxation/regulation. We're seeing greater moves towards enabling digital assets beyond the curtailment that current taxation rules place on them. The likes of KPMG will have its own role to play in that process. It will also be better placed to advise corporates who want to utilise digital assets as a balance sheet constituent going forward.

Based on the article you posted, your statement is a stretch in my opinion. The article actually says they bought it via Geminis custody service, so all they did was send x dollars to Gemini who purchased and hold the amount of bitcoin for them, they aren't building IP. A consulting firm like KPMG doesn't have to hold Bitcoin on their balance sheet to be able to consult on Bitcoin, hence why consulting firms already offer tax and treasury advise on crypto.

I actually think this isn't really very newsworthy, and is just a bit of a marketing ploy by KPMG. I don't think its a strong signal that the tide is turning, although it is always good to see more adoption.

 

[tecate]

The article actually says they bought it via Geminis custody service, so all they did was send x dollars to Gemini who purchased and hold the amount of bitcoin for them, they aren't building IP

Of course they're using a custodian. Show me one corporate not using a custodian when it comes to digital assets. As regards not building IP, they're not building IP as a custodian, no. In other ways closer to the services they actually offer, I believe it likely.

A consulting firm like KPMG doesn't have to hold Bitcoin on their balance sheet to be able to consult on Bitcoin, hence why consulting firms already offer tax and treasury advise on crypto.

I didn't say that they do have to. What I am saying is that the more up close and personal they get with digital assets, the better an understanding they're likely to have. There are regulatory/taxation/accountancy hurdles that still exist when it comes to a corporate putting digital assets on its balance sheet.

I actually think this isn't really very newsworthy, and is just a bit of a marketing ploy by KPMG. I don't think its a strong signal that the tide is turning, although it is always good to see more adoption.

You're very much entitled to your opinion but its one I disagree with.

 

[DublinHead54]

Of course they're using a custodian. Show me one corporate not using a custodian when it comes to digital assets. As regards not building IP, they're not building IP as a custodian, no. In other ways closer to the services they actually offer, I believe it likely.



I didn't say that they do have to. What I am saying is that the more up close and personal they get with digital assets, the better an understanding they're likely to have. There are regulatory/taxation/accountancy hurdles that still exist when it comes to a corporate putting digital assets on its balance sheet.


You're very much entitled to your opinion but its one I disagree with.

Tecate, the article you posted doesn't provide any evidence to support your opinion. There is no reference to building IP and you yourself have said holding Bitcoin via a custodian is not evidence of building IP.

I'll say it again, I think that article is just a bit of a non-story given that consultancies already offer a number of services regarding blockchain and crypto assets and have done for years. You don't need to buy bitcoin to understand it or provide tax and regulatory advise on it, just the way you don't need to be a billionaire to provide tax advice to a billionaire.