Why is Bitcoin "digital gold" crashing right now?

[tecate]

Bitcoin does not have any edge theoretical or otherwise on divisibility. Back off.

What has been clear from the outset of this aspect of the discussion is that gold is the one that loses out in terms of divisibility. That Bitcoin is scored slightly better than FIAT in terms of divisibility is technically correct. It's yourself that's sensitive on that score and I think you should park it up yourself. If not, please cite a similar comparison that doesn't score Bitcoin and FIAT in this way when it comes to divisibility.

 

[tecate]

We really are in the realm of fantasy economics. Capitalism is dead now, how much longer is the pretense going to continue for? In the end, it isnt nuclear holocaust, famine or rising ocean levels, instead it is a tiny microscopic virus that is sticking the final nail in the coffin.

This provides some good commentary on the Fed's corporate bond buying announcement:

https://twitter.com/gaborgurbacs/status/1272647910543556615?s=20


The kicker is that it's being done to bolster corporates - not mom n' pop businesses. This is precisely the type of inequitable Central Bank behaviour that led to the launch of Bitcoin in the wake of the 2008 financial crisis. We also have a new development in the world of financing with the advent of the Initial Bankruptcy Offering (IBO).

 

[Duke of Marmalade]

What has been clear from the outset of this aspect of the discussion is that gold is the one that loses out in terms of divisibility. That Bitcoin is scored slightly better than FIAT in terms of divisibility is technically correct. It's yourself that's sensitive on that score and I think you should park it up yourself. If not, please cite a similar comparison that doesn't score Bitcoin and FIAT in this way when it comes to divisibility.

I searched but couldn’t find any other divisibility comparison between bitcoin and fiat.
However I found This link which is probably the most objective general comparison I have found, nearly all other comparisons are written from a bitcoin bias. It is unambiguous that bitcoin could have no value.
What I did find was a reference that bitcoin could be divided further if needs be by a change in the protocol. Fiat is similarly infinitely divisible without needing changes in protocol. It is a total red herring yet Mr Kelleher marks fiat down against bitcoin on this score.
Gold, diamonds, rubies, real estate and works of art are all more or less indivisible. They are all stores of value. Divisibility is not in any way a requirement of a store of value. Why did you include it in your list which you have asserted on many occasions was only addressing the store of value aspect?

 

[Leo]

Not natively you don't - and the bigger point is that what you describe with the Euro is only possible through a centralised party. Bitcoin is decentralised - it's a technology of trust.

As a consumer, why do I care if the functionality is native or not? What's the benefit? The only reason I can see where that might have value is if I want to start coding again so I can create my own smart contracts. The vast majority of people aren't going to do that, we they will use the services created by third parties just like I do with fiat today.

A technology of trust with no accountability and no oversight. I prefer to have my bank, Mastercard or Visa providing oversight and protecting me from fraudsters and giving me the ability to reverse a transaction should I send money to the wrong account.

Review the definition of a micro-transaction here. They make plenty of sense - and visa can't transact them economically.

Brilliant, so show me an example of where these micro-transactions transact at tiny fractions of a cent?

I think you need to review what the Lightning Network is then - as you must be misunderstanding something.

Thanks, I understand it well enough to know it is not bitcoin.

There was 'hype' back in late 2017 surrounding Bitcoin/Crypto/Blockchain/DLT/Smart Contracts. I'm not aware of any hype right now.

Almost 3 years later, in an era of hyper-adoption, they haven't changed the world, maybe it's time to move on from thinking all money needs to support smart contracts.

It will allow people to take control over their own digital identity - and in turn take greater control with regard to their data and privacy of said data. Included in that will be the facilitation of the ability to sell personal data (or aspects of it) or not.

How?

That's not my understanding but you're the expert apparently.

In a decentralised system, where is the data stored? In a private database in a secure data center?

If it's all automated and the only thing that the consumer has to do is select certain options on a decentralised application, then why not?

A complete financial profile costs less than $0.005 per person at the moment, and that's way more data than most people will ever willingly share. If decentralisation ends up with more people exposing their data, do you think the price will go up or down?

Compliance is part of the legacy world. The type of 'compliance' you are referring to was never envisaged with decentralised digital currencies in mind. When I send Bitcoin from my Bitcoin wallet to someone elses Bitcoin wallet, there's no regulation involved - it wasn't designed with that in mind as it isn't designed to be part of the conventional system.

So you're happy to encourage money laundering and facilitating rogue states like North Korea get around international sanctions? Regulation of financial services serves the greater good. It's not always done well, but we don't make murder legal just because we don't convict 100% of perpetrators.

Again, what about decentralisation prevents compliance?

 

[Leo]

The digital entries of fiat on peoples bank accounts are every bit as divisible as bitcoin, if need be. And there is no constraint on digital transactions as evidenced by me giving an example of Airtricity charging €0.1496 per unit. You are being blinded by the granularity of its coin, which is not relevant to the divisibility debate.

That's a very good point, the crypto believers seem to limit their interpretation of money to the physical manifestation. I wonder why the fixation on that, is it because they long to hold something that represents bitcoin?

Divisibility without function is pointless, unless there is demand to transact at sub cent levels, bitcoin is more divisible than is useful.

 

[Duke of Marmalade]

That's a very good point, the crypto believers seem to limit their interpretation of money to the physical manifestation. I wonder why the fixation on that, is it because they long to hold something that represents bitcoin?

Divisibility without function is pointless, unless there is demand to transact at sub cent levels, bitcoin is more divisible than is useful.

Kelleher displayed either a woeful naïveté or just a self fulfilling desire to drum up any advantage for bitcoin in bigging up this divisibility thing. tecate should know better but he has this trait that once he starts to defend a point he just won't drop it against all the odds.
I don't think he has made one concession so far. I, on the other hand, have made the humiliating concession to Wolfie that the cult status of bitcoin has greatly weakened my conviction that it is going to zero any time soon.

 

[elacsaplau]

...…….but he has this trait that once he starts to defend a point he just won't drop it against all the odds.

kettle calling black pot the the?

 

[Duke of Marmalade]

Flattering to see the usual hurlers on the ditch pouring over my every word

 

[tecate]

It is a total red herring yet Mr Kelleher marks fiat down against bitcoin on this score.

I guess we'll have to go back over this one more time. It was more or less agreed that the greater point in terms of divisibility was that gold fails the test. However, Kelleher - who you introduced to the discussion - is technically right. As it stands today, Bitcoin has EIGHT places of decimal. FIAT has TWO.

That's a very good point, the crypto believers seem to limit their interpretation of money to the physical manifestation. I wonder why the fixation on that, is it because they long to hold something that represents bitcoin?

Wishful thinking my friend. :-D

Divisibility without function is pointless, unless there is demand to transact at sub cent levels, bitcoin is more divisible than is useful.

Ok, so you at least accept that it is more divisible. Can you go and tell Dukey as he seems a tad confused. As regards function, FIAT has extra 'ability' that Bitcoin doesn't have. It can just be printed off - there's no limit to it. That's why those eight places of decimal are needed for hard money (Bitcoin) and they're not necessary for 'money printer go brrr' FIAT.

Kelleher displayed either a woeful naïveté or just a self fulfilling desire to drum up any advantage for bitcoin in bigging up this divisibility thing.

As outlined previously, you introduced him/his article to this discussion without citing his work but selectively quoting his article out of context because a particular tract of text in isolation supported your world view. Now, you trash talk his article. You couldn't make this stuff up.
Secondly, you can dispute it all you want but the facts don't lie. Bitcoin has EIGHT places of decimal, FIAT money has TWO. He's not wrong to point this out. You have been invited to cite another source that sources Bitcoin and FIAT differently on this fundamental characteristic - and you've failed despite having tried to source a differing view.

tecate should know better but he has this trait that once he starts to defend a point he just won't drop it against all the odds.

You mean I won't be brow beaten into accepting an untruth from you? Sounds about right.

I don't think he has made one concession so far.

I haven't had to make 'concessions'. I can list off a whole host of issues and challenges with Bitcoin/cryptocurrency that I readily acknowledged/brought up myself without any pressing from you or anyone else. Contrast that with you and others taking the naysayer/no-coiner side of this discussion. I've brought this up a few times. How many positive characteristics of Bitcoin have you acknowledged? Answer - not one.
That to me lacks credibility.

 

[Firefly]

You mean I won't be brow beaten into accepting an untruth from you? Sounds about right.

QED..

 

[tecate]

As a consumer, why do I care if the functionality is native or not? What's the benefit? The only reason I can see where that might have value is if I want to start coding again so I can create my own smart contracts. The vast majority of people aren't going to do that, we they will use the services created by third parties just like I do with fiat today.

There's a third party involved. If you can't see the benefit of peer to peer value transfer then I can't help you.
Nobody ever suggested that consumers would start coding their own smart contracts!

A technology of trust with no accountability and no oversight.

The accountability comes via opensource code that is open to community scrutiny.

I prefer to have my bank, Mastercard or Visa providing oversight and protecting me from fraudsters and giving me the ability to reverse a transaction should I send money to the wrong account.

Go and use it then - and pay the 3% extra for the billions that are clocked up in credit/debit card fraud every year then (the 3% being rolled in to the price of the good/service). So if you had the opportunity to pay $10 for something with visa or $9.50 with Bitcoin, you'd still pay with visa right?

Thanks, I understand it well enough to know it is not bitcoin.

Luckily not everyone is going to judge this based on your semantics. Whether you like it or not, Lightning Network is developing nicely into a role where it can effect Bitcoin transfers at scale - with low transaction time/cost.

Almost 3 years later, in an era of hyper-adoption, they haven't changed the world, maybe it's time to move on from thinking all money needs to support smart contracts.

Another guy in a hurry! How long did the development of the internet, AI, mobile tech, IoT or any other technology take?
Nobody said that money 'needs' to support smart contracts. However, clearly its a feather in its cap if it can. Or are you going to suggest to everyone that there's no value in smart contracts whatsoever?

How?

Go read up on decentralised identities and find out. We've been here many times before - i'm not going running around fetching and carrying for you Leo.

In a decentralised system, where is the data stored? In a private database in a secure data center?

If you are saying that I don't have the knowledge and claiming that you do, then drop the questions and start with the answers.

A complete financial profile costs less than $0.005 per person at the moment, and that's way more data than most people will ever willingly share. If decentralisation ends up with more people exposing their data, do you think the price will go up or down?

I guess we'll see how it all pans out. All these foolish people going to great trouble to establish decentralised data marketplaces. Don't know what they could be thinking of!

So you're happy to encourage money laundering and facilitating rogue states like North Korea get around international sanctions?

I never said such a thing.

Regulation of financial services serves the greater good.

By trampling over people's financial privacy? Try again!

It's not always done well

No kidding? That's an understatement. The friction it causes is unreal. The cost of such systems is unreal - and is ultimately borne by the consumer. Financial services companies and banks have no business taking the role of the police - they'll tell you that themselves.

we don't make murder legal just because we don't convict 100% of perpetrators.

I'm not even sure what this is for an analogy.

Again, what about decentralisation prevents compliance?

Asked and answered. That you don't like the answer is your problem Leo.

 

[tecate]

QED..

If you mean QED insofar as I won't countenance blatant lies, then sure - we're on the same page

 

[Duke of Marmalade]

I guess we'll have to go back over this one more time. It was more or less agreed that the greater point in terms of divisibility was that gold fails the test. However, technically, Kelleher - who you introduced to the discussion - is technically right. As it stands today, Bitcoin has EIGHT places of decimal. FIAT has TWO.

I too am going to try one more time, probably the last as this really is a mole hill made into a small hillock by Keleher and promoted to Mount Everest by your good self.
If I fail to get the satoshi to drop this time then I can only come to one of three conclusions.
1. I am just hopeless at explaining these things, though Leo gets the point. I suspect that even some of the hurlers on the ditch get it too.
2. It is not General Relativity but it is a reasonably nuanced point confronting first impressions. If it is beyond your intellectual capacity then it would be unfair of me to keep exposing that deficiency.
3. Having taken a position you will die in a ditch before you withdraw from it. Given that after 21 pages of mostly dialogue you are of the view that nothing that you have said needs corrected this third would I think be the correct explanation. You might be PM of the UK some day.

So here goes one more time, very very slowly.
I am not so versed in the minutiae of bitcoin as your good self and was surprised to learn that in fact bitcoin's divisibility is not at all limited to 8 decimal places. By changes to the protocol the divisibility of bitcoin is in fact unlimited.
So to is fiat in its digital manifestation except it doesn't even need the equivalent of a change to the protocol to go to whatever number of decimal places its customers may demand. The understandable illusion that entrapped Mr Kelleher is the granularity of its physical manifestation or maybe the fact that there isn't an actual name for € .0000001, say, whereas there is a name for 1/100 millionth of a bitcoin - the satoshi.

 

[tecate]

I too am going to try one more time, probably the last as this really is a mole hill made into a small hillock by Keleher and promoted to Mount Everest by your good self.

You're the one that's labouring the point Dukey - when it has been acknowledged from the outset that in the comparison of gold/bitcoin/FIAT in terms of divisibility - gold is the loser. That's not Kelleher's doing - he's technically correct to say that Bitcoin has greater divisibility than FIAT. One has eight places of decimal - the other has two places of decimal. What part of that do you not understand?
I also invited you to cite another interpretation that didn't demonstrate the same ranking as Kelleher and you've been unable to do so.

2. It is not General Relativity but it is a reasonably nuanced point confronting first impressions. If it is beyond your intellectual capacity then it would be unfair to keep exposing that deficiency.

You can't prove your point so you will resort to this nonsense? As you wish, Dukey.

3. Having taken a position you will die in a ditch before you withdraw from it.

As alluded to in my last post, there's a very quick and easy test for this. Outline to readers where you have once acknowledged a positive trait of Bitcoin. On the flipside, I can list a whole host of posts where I've drawn attention to shortcomings and challenges facing Bitcoin.

Given that after 21 pages of mostly dialogue you are of the view that nothing that you have said needs corrected

I'm sorry that you feel aggrieved that our opinions on aspects of the subject differ.
The fact of the matter is that over the years, I've learned plenty from others on discussion boards such as this. The irony is that you continually claim that Bitcoin is a 'cult' when in fact your own preconceived notions and an underlying deep seated political view is clouding your ability to assess Bitcoin pragmatically.

So here goes, very very slowly.
I am not so versed in the minutiae of bitcoin as your good self and was surprised to see that in fact bitcoin's divisibility is not at all limited to 8 decimal places. By changes to the protocol the divisibility of bitcoin is in fact unlimited.
So to is fiat in its digital manifestation except it doesn't even need the equivalent of a change to the protocol to go to whatever number of decimal places its customers may demand. The understandable illusion that entrapped Mr Kelleher is the granularity of its physical manifestation or maybe the fact that there isn't an actual name for € .0000001 whereas there is a name for 1/100 millionth of a bitcoin - the satoshi.

As outlined above and in far too many posts on this thread than should be needed....
- Bitcoin has eight places of decimal - FIAT money has two.. Kelleher and his article were introduced to this discussion by you. At this point, I'd suggest you contact him directly if you feel that strongly about it. And everyone else that published such a table - as it seems all the ones you found in your search were the very same.

 

[Leo]

Ok, so you at least accept that it is more divisible. Can you go and tell Dukey as he seems a tad confused.

They're both divisible to the point of futility, why go further? Crypto fans have failed to justify why they feel this is such a strong point.

There's a third party involved. If you can't see the benefit of peer to peer value transfer then I can't help you.
Nobody ever suggested that consumers would start coding their own smart contracts!

So no benefit over my current use of fiat, thanks.

So if you had the opportunity to pay $10 for something with visa or $9.50 with Bitcoin, you'd still pay with visa right?

Give me an example of one thing I can buy with bitcoin for $9.50 that would cost $10 with Visa?

Lightning Network is developing nicely into a role where it can effect Bitcoin transfers at scale - with low transaction time/cost.

No, you're effectively buying LN tokens with bitcoin that you can then trade or exchange (assuming there's a funded path established), and at a later date you can trade those tokens back for bitcoin. There isn't a single bitcoin that lives on the lightning network.

Another guy in a hurry! How long did the development of the internet, AI, mobile tech, IoT or any other technology take?

Well, IoT to take one of your examples is considered to have taken up to 8 years for mass adoption, some claim less. Mass adoption of eBooks took a similar timeframe, mass adoption of tablet computing was even quicker, mass adoption of microwave ovens also happened very quickly. We're 11-12 years into bitcoin, the rate of adoption is actually quite slow.

Go read up on decentralised identities and find out. We've been here many times before - i'm not going running around fetching and carrying for you Leo.

So you don't understand well enough to back up your claims, fine.

 

[Duke of Marmalade]

- Bitcoin has eight places of decimal - FIAT money has two..

I fear that it may be explanation 2 in post #414 that prevents you understanding that fiat in its digital manifestation is not restricted to 2 decimal places. Ask Airtricity - €0.1496 per unit . Ask any life company who routinely quote their unit prices to 3 decimal places.
It would be unfair of me to keep exposing your blind spot on this, so relax I will spare your blushes.

 

[Leo]

The understandable illusion that entrapped Mr Kelleher is the granularity of its physical manifestation or maybe the fact that there isn't an actual name for € .0000001, say, whereas there is a name for 1/100 millionth of a bitcoin - the satoshi.

He also doesn't grasp the reality that consumer demand is for less divisibility, look at the success of the elimination of 1 & 2c coins from circulation. Also, in PAYE calculations, credits and benefits are rounded to the nearest Euro in the individual's favour.

 

[WolfeTone]

Im going to stick my nose in here and hopefully broker a truce, albeit I take the liberty of thinking that I understand each position?

The question of divisibility. I think it is agreed that bitcoin and fiat beat gold hands down? The question is the difference between bitcoin and fiat alone.

I think Duke and Leo are correct in saying that bitcoin is no more divisible than fiat as, depending where the decimal point is placed

Fiat 10000000.00
Bitcoin 10.00000000

both equally divisible, and accepting the fixed position of the decimal point, to the left the number is infinite.

tecate is correct in saying that bitcoin is more divisible at a micro level.
Leo is correct to ponder 'so what? who buys stuff at a micro level'.

So a little example perhaps.

According to todays exchange rate, 1 Vietnamese Dong will buy you circa 0.00004240 US dollars. According to tradingeconomics.com, the 'living wage' of an individual in Vietnam is circa 5,500,000 Vietnamese Dong, or $234 a month.
Now Im not sure how far 5.5m Dong will go, but ifs its a 'living wage' then perhaps enough to feed, clothe, keep the lights on and not much else.
If there is any change left over, I suspect it could be in the region of cents, or a few dollars at best.

Although a participant and contributor in the global economy he is blocked out from perhaps exploiting the true value of the fruits of his labour by virtue of not having access to the worlds leading currencies of $ or € or £Stg, instead he gets paid in Dong. His labour would extract maybe $10 ph in the US. In Vietnam its roughly $1.4ph.
He is not alone, there are billions of people like him, aspiring to the first world in any way they can - even to the point of suffocating in the back of airtight refrigerated lorries, or travelling in overcrowded vessels and drowning in the Mediterranean for instance.

On the other hand, if he has a smart phone, internet connection and a private wallet he could convert or receive bitcoin for his Dong. If he bought back in 2008, he could be retiring himself and his family now. If he buys today, for sure he may only receive, say 0.00097235 of a bitcoin but at least it is 0.00097235 of something, rather having no access at all. So there is hope, albeit highly speculative.

tecate has frequently referenced the people's of the second and third world, the unbanked. He has often citied these people are who are excluded, in no small part because the global financial system is unduly dominated by first world bungling financial overseers.
Bitcoin offers, or its concept does, a level playing field to everyone. Given the price of one bitcoin to $9000, the micro divisibility is an advantage over fiat.

 

[Duke of Marmalade]

I am sure you mean well Wolfie. I think what you are saying is that fiat has the scope to be as divisible as people want it to be but bitcoin currently facilitates more divisibility. Thus I agree that it is not actually possible to have an account balance in your high street bank less that 1 cent. I suppose it is possible to have just 1 satoshi in your bitcoin wallet. Mr Kelleher rates fiat a notch below bitcoin on divisibility and his commentary indicates that he does not think this to be a negligible disadvantage.
As to gold versus fiat versus bitcoin, physical gold is obviously left for dead when it comes to divisibility (albeit gold backed currency got round that). But that is only relevant as a medium of exchange. tecate has included divisibility as a factor in store of value, which clearly it isn't, witness gold, diamonds, rubies, real estate, works of art.

 

[Leo]

tecate has frequently referenced the people's of the second and third world, the unbanked. He has often citied these people are who are excluded, in no small part because the global financial system is unduly dominated by first world bungling financial overseers.

2 out of every 3 unbanked say they are so because they don't have sufficient money to justify opening an account. When everything you earn goes to feed your family and keeping a roof over your heads, having a bank account or the ability to hold bitcoin is of little value, You also can't overlook that a very large portion of those people have no independent means (women mainly). Also significantly for women in a number of countries with larger shares of unbanked, once married they are expected to hand over full financial control to their husbands. Accounts being too expensive is only cited by a very small percentage as the sole reason they do not have an account.