Bitcoin

[cAPSLOCK]

So, you do not understand that Bitcoin is a form of cryptocurrency? Frequently referred to by the term "crypto?" Good to know.

First of all... I like to have discussions and I am intrigued by disagreement. But sarcasm in the form of personal attacks are something I will not tolerate.

Of course I know that people use the term "crypto" to enclose all cryptoassets of which BTC is one. I am making the point that Bitcoin is special amongst that set. Like a square is a special rectangle. And there are many old school Bitcoinners who see a clear difference between Bitcoin and the vast vast majority of other crypto asset projects.

And as a reminder...
• BTC has no depositor insurance whatsoever
• BTC spent most of the past year melting down
• The Fed has not and will not rescue BTC
• BTC has been involved in a variety of scams and frauds

Granted, stocks share some of these features (e.g. no deposit insurance; occasionally crashes). But at least that stuff is regulated, and you don't have to worry about the CEO of the NYSE stealing your stocks and taking off for Bermuda.

What commodoty or property does NOT have these properties? If the value of my house goes from 500k to 10k the FDIC is not going to bail me out. Same with gold, collectables, and so on. If you want insurance on them then you have to pay for that insurance with something. The Fed funds their insurance with inflating the supply.

Or, not. I noticed that your comparison chart was awfully selective about its dates.

YOURS is selective. You selected 3 years. And just like almost any 3 year peiod you pick in Bitcoin you will have more value at the end than at the beginning.
MY graph was the entire chart from inception to the time the chart was made. I could fill in the little dip since then too if I wanted to.

Tell that to the people who got wiped out because the exchange they used failed... or [/url=v]because they accidentally threw the hard drive with their private key in the trash.[/url]

It is my responsibility as to what I do with my coins. If you leave them on some idiotic exchange then you might lose them. They were not yours in the first place. And if you lose your keys that is also kind of touugh luck.

Bitcoin is a decentralized digital bearer asset (first ever). Just like a pocket fuull of $100 bills if you lose it, you have lost it.

You've got less than $250k in Bitcoin. Those coins aren't insured by anyone. And that's your idea of a hedge against bank failures. But you know that $250k in cash would be insured. What the what?

What do I need to insure them against? Theft? Loss? Devaluation? Inflation?

• If someone ever gets more than 51% of BTC, you're screwed (that happened to Bitcoin SV in 2021)

That 51% attack was on a fraud chain. "Bitcoin SV" is a fraud like almost all crypto. It is a particularly bad one though in many regards/ Not the least of which is the fact that so few people mine it that it CAN be 51% attacked. Bitcoin cannot be successfully, really. It is a technical explanation that I am not going to waste my time on assuming we will remain at odds on this issue.

So your idea of a good hedge is an asset class that's under repeated attacks from governments?

Yes. Particularly if it can withstand them.

Unless it goes to $0, BTC will never stabilize. It can't. It has no mechanism to stabilize its exchange rates or purchasing power.

It will stabilize when it's value is too large for the sorts of swings we see today. Gold shares many properties with Bitcoin, and has a fairly stable price. It is also worth 15-20x by market cap.

Can I laugh at you when it drops to $10, too?

Of course. But I bet you a bitcoin it will never drop to that price.

 

[Visbek]

sarcasm in the form of personal attacks are something I will not tolerate.

Fair enough, let's proceed.

I am making the point that Bitcoin is special amongst that set.

You presented no evidence whatsoever to support that claim, either previously or in this post.

there are many old school Bitcoinners who see a clear difference between Bitcoin and the vast vast majority of other crypto asset projects.

A vague appeal to people with a vested interest is not evidence.

I've also been following BTC since its early days. It's little more than a libertarian fantasy that has utterly failed at its primary mission -- which is why you're still valuing it in terms of dollars, and seeing deflation as a win (whereas, for an actual currency, deflation is a death sentence).

What commodoty or property does NOT have these properties?

Bank accounts have depositor insurance.

Government bonds are backed by the governments that issue them. While some of those may be speculative, US bonds are classified as the most secure asset in the world today. (That's why SVB held so much of their reserves in US securities.)

Bank accounts and brokerages protect against fraud.

Real estate is a tangible and functional asset. Even if your mortgage is underwater, you've still got a roof over your head.

We've clearly seen the FDIC bail out depositors of SVB.

As noted, crypto is almost completely unregulated, which leads to far more rampant fraud than we see in stock markets, bond markets, and certainly retail banks.

On a side note, bubbles aren't "hedges." They're just bubbles.

The Fed funds their insurance with inflating the supply.

Nope, wrong. The FDIC is funded by the banks. The Fed has taken other roles this past week or so.

No one, by the way, bothered to step in when the global crypto market melted down, and several of the biggest exchanges collapsed into fraudulent fiery heaps, burning up billions of digital gains. Again, that isn't a quality most people look for in a hedge.

YOURS is selective. You selected 3 years....

lol... My point would be no different if we selected the entire lifespan of crypto. And it included the recent month or so where BTC went up.

You're trying to claim that crypto isn't a bubble, but you did so by selecting a chart that cut out all of the crashes.

And just like almost any 3 year peiod you pick in Bitcoin you will have more value at the end than at the beginning.

Uh, hello? That's because BTC's prices only took off 2 1/2 years ago. That may well not be the case in, say, November 2024.

MY graph was the entire chart from inception to the time the chart was made.

And since that chart was made before multiple crashes, it isn't useful. It certainly doesn't prove that BTC/crytpo are anything other than an incredibly volatile speculative asset.

It is my responsibility as to what I do with my coins. If you leave them on some idiotic exchange then you might lose them.

True, but as I pointed out in a subsequent post: You can also lose them if you're managing your own crypto. At least 20% of BTC is now permanently inaccessible because people simply can't remember a password, or lost a hard drive with their key on it. Again, these make for bad hedges.

That 51% attack was on a fraud chain.

It's a vulnerability in most blockchains, including BTC.

"Bitcoin SV" is a fraud like almost all crypto.

Must... not... be... sarcastic!!!

It will stabilize when it's value is too large for the sorts of swings we see today.

Its market cap in November 2021 was $1.4 trillion. That didn't stabilize it.

Again, it cannot be stabilized, because there is no entity capable of changing the supply.

I might add, what do you think would happen if BTC somehow hovered at $50,000 for a year? People would bail, because they'd see that its value was no longer rising. I doubt it would even last that long.

Gold shares many properties with Bitcoin, and has a fairly stable price. It is also worth 15-20x by market cap.

Nope, gold is not stable. It probably just seems that way if you're accustomed to the ridiculous volatility of BTC.

 

[PoS]

Lol. ALL Bitcoinners get it. It has been compared to that market bubble since the very beginning. Thing is, the longer it lasts, the more it proves that comparison incorrect.

I made some money in crypto a few years back (not with BTC), but I pulled out because I just didnt have the time to study the market.

 

[cAPSLOCK]

You presented no evidence whatsoever to support that claim, either previously or in this post.

Well. There are several reasons BTC is unique amongst the sector, and honestly this is a long and complex topic, but I will list a few:
1. It was first
2. It was fair (no pre mine, ninja mine, dev tax, foundation cut, and so on)
3. It has the most hash power behind it (it is arguably the most powerful single purpose network on the planet)
4. It is the Schelling point.
5. It has remained the most distributed and decentralized.

Each of the above could be an essay unto itself. But the basic idea is once the cat was out of the bag for the problem BTC was trying to solve it became insurmountably difficult to do it again. Nearly every attempt has been gamed somehow by the creators. Pandoras box was opened.

I've also been following BTC since its early days. It's little more than a libertarian fantasy that has utterly failed at its primary mission -- which is why you're still valuing it in terms of dollars, and seeing deflation as a win (whereas, for an actual currency, deflation is a death sentence).

You are correct that BTC appeals to libertarians, and Austrian economists. That is for sure. And what we are seeing is a free market, decentralized monetary system designed with Austrian principals vs. a world system that is built onn Keynesian foundation. So which wins? The underdog that can never have more than a preset amount of units? Or the world system currently in the middle of printing itself out of an ongoing disaster.

This encapsulates my original point. If the Austrian system has a chance to beat the Keynesian one then this is the time, and this is the bet. It is a David vs Goliath story unfolding, for sure.

That said there are many leftists who have come to see that Bitcoin is favorable to the things they hold dear in spite of it not "sticking it to the rich". People in the global south are beginning to use the Bitcoin lightning network for daily commerce. And the unbanked now have a way into the world economy. See writings by Alex Gladstein. https://hrf.org/team/alex-gladstein/

Uh, hello? That's because BTC's prices only took off 2 1/2 years ago. That may well not be the case in, say, November 2024.

What? Maybe you think so... but Bitcoin bull runs, and pullbacks have been happening since at least 2011.

And since that chart was made before multiple crashes, it isn't useful. It certainly doesn't prove that BTC/crytpo are anything other than an incredibly volatile speculative asset.

OK. I have fixed the chart by hand... here ya go:


(continued next post)

 

[cAPSLOCK]

It's a vulnerability in most blockchains, including BTC.

The 51% attack is, at this point, practically impossible for BTC. You are correct several other chains that use POW are vulnerable (and other consensus mechanisms like POS are inherently vulnerable forever). In fact, few are not. This is ANOTHER reason that Bitcoin is different than the rest of "crypto". At this point the attacker would have to have the power and resources of a nation state, or perhaps a REALLY big tech company, and more likely both to pull it off. And the reward would not be worth the result which is a single double-spend. The best recent analysis of this I know of is here (And as far as I can tell Andreas would absolutely NOT be a libertarian)...

Its market cap in November 2021 was $1.4 trillion. That didn't stabilize it.

Of course not. That is not near enough liquidity pool for it not to see swings. That is still like 1/7th of Gold. And not even enough to equal APPL's market cap. Bitcoin will need to bea couple orders of magnatude larger before the swings will calm down. And even then they will never stop. ALL assets fluctuate in value. Even monetary assets. Even the USD.

Again, it cannot be stabilized, because there is no entity capable of changing the supply.

I disagree with this Keynesian premise. And predict we are about to see the endgame of this exact idea play out before our eyes as the western central banks all try to print themselves out of oblivion. Take a deep breath, because it might just be the biggest thing we all see in our lives. We should hope so, since the only thing bigger would be the war that it might cause.

I might add, what do you think would happen if BTC somehow hovered at $50,000 for a year? People would bail, because they'd see that its value was no longer rising. I doubt it would even last that long.

Bail into what? All assets have tradeoffs for how they do/do not preserve value over time. Bitcoin's tradeoff is it's volatility. The USD loses value like a sieve. And that is up UNTIL now. We are about to see a LOT of new holes drilled into the dollar.

This is why I say Bitcoin is the hedge. Not because it is "safe", "insured", "backed by war", "controlled by a central authority".

But entirely because it is NOT those things.

 

[Gordy327]

I see bitcoin continuing to surge in value, well over $10,000. People that put money into this will be happy but I always get a sense its value is destined to fall eventually, perhaps crash under $1,000.

Any thoughts on this cryptocurrency?

How does one cash out cryptocurrency? In stocks, if my stocks are valued $10k more than my original investment, I can sell them & pocket the profit. What about for cryptocurrency?

 

[Visbek]

1. It was first

So what? That doesn't make it better, or safer, or more stable.

2. It was fair (no pre mine, ninja mine, dev tax, foundation cut, and so on)

"Fair?" Satoshi Nakamoto, whoever that is, is sitting on 1.1 million BTC. There are also numerous BTC whales who have enormous leverage simply because they bought a bunch of BTC when it was cheap.

3. It has the most hash power behind it (it is arguably the most powerful single purpose network on the planet)

Again, that doesn't make it better, safer or more stable.

4. It is the Schelling point.

So was MySpace. I.e. just being the default today doesn't mean it will be the default tomorrow. Not safer etc etc.

5. It has remained the most distributed and decentralized.

Not safer, not guaranteed etc.

Each of the above could be an essay unto itself. But the basic idea is once the cat was out of the bag for the problem BTC was trying to solve it became insurmountably difficult to do it again.

Yeah, not so much.

The alleged "problem" is that governments can't be trusted not to cause inflation -- even though numerous governments have done just that for decades.

The alleged "solution" to the "problem" results in what started as a currency, that has turned into a speculative object, that deflates and/or inflates more in a week than the USD usually does in an entire year.

The alleged "solution" has no mechanism to stop inflation or deflation. How is that a win for a currency?

The alleged "solution" doesn't stop fraud, or bad loans, or government interference, or establish trust. You don't even trust 3rd parties to hold onto your crypto assets!

The idea that it can't be replicated is ridiculous, as we've seen tech giants and first movers repeatedly superseded by others. (E.g. look at how far Ethereum's blockchain has come in half the time.)

That is for sure. And what we are seeing is a free market, decentralized monetary system designed with Austrian principals vs. a world system that is built onn Keynesian foundation. So which wins?

Fiat currency is centuries old, it wasn't built by Keynes.

The underdog that can never have more than a preset amount of units?

Yet again, that's not a plus. Do you really not understand why? Why a fixed supply doesn't stop inflation or deflation?

Or the world system currently in the middle of printing itself out of an ongoing disaster.

It appears to be successfully preventing a global recession. It has also successfully formed the backbone of international trade for decades.

If the Austrian system has a chance to beat the Keynesian one then this is the time, and this is the bet. It is a David vs Goliath story unfolding, for sure.

What nonsense. Do you buy dollars today because you think it's going to "win" in 30 years? No.

People in the global south are beginning to use the Bitcoin lightning network for daily commerce. And the unbanked now have a way into the world economy.

I've been hearing for years about how BTC is going to be used by actual consumers Real Soon Now. It hasn't happened.

OK. I have fixed the chart by hand... here ya go:

Lol... Not so much. It's a log chart, which completely obscures the fact that BTC crashed from around $65,000 to $20,000 in just 6 months.

Don't bother making another one, as the basic idea is useless anyway. The simple fact is that BTC has been a speculative bubble for less than 3 years. South Sea was fast, but not all bubbles pop immediately. "Tulip Mania" lasted 3 years. The subprime mortgage bubble was 4-6 years. The stock market bubble in the Roaring 20s lasted nearly a decade.

 

[Visbek]

The 51% attack is, at this point, practically impossible for BTC....

Only by today's valuations. There's no guarantee it will remain so high for so long, or that a large consortium can't possibly form -- especially if the value craters again.

At this point the attacker would have to have the power and resources of a nation state, or perhaps a REALLY big tech company, and more likely both to pull it off.

Or, just get a couple of whales together.

Of course not. That is not near enough liquidity pool for it not to see swings. That is still like 1/7th of Gold.

lol... Yeah, gold also has swings in price. In the past week, it's risen 3.56% against the dollar! Yet again, do you really not understand why that's a bad thing in a currency?

And not even enough to equal APPL's market cap.

You think Apple stock can't fall quickly? How cute is that?

Bitcoin will need to bea couple orders of magnatude larger before the swings will calm down.

Nope, sorry, wrong. Market cap does not prevent large fluctuations in value. Just the fact that the NYSE can crash in a matter of hours shows that your claim is patently incorrect.

I disagree with this Keynesian premise.

You can disagree all you want, but it's just a fact.

And predict we are about to see the endgame of this exact idea play out before our eyes as the western central banks all try to print themselves out of oblivion.

lol, no. In fact, the opposite is happening! The Fed is trying to tamp down demand-led inflation by cutting back on interest rates.

Take a deep breath, because it might just be the biggest thing we all see in our lives.

Or... All this fear that you're trying to foment about the banking system is already calming down, specifically as a result of government action.

Bail into what?

Some other speculative asset.

The USD loses value like a sieve.

lol, no. It usually inflates by 2% per year, and that's because... wait for it... the Fed has set, and adhered to, a 2% target since the early 1980s.

And yet again... Even given the recent bump, BTC has inflated around 70% in the past 12 months. Talk about "losing value like a sieve!"

This is why I say Bitcoin is the hedge. Not because it is "safe", "insured", "backed by war", "controlled by a central authority".

But entirely because it is NOT those things.

Or, you're saying it because it's the crypto talking point du jour.

 

[Bucky]

How does one cash out cryptocurrency? In stocks, if my stocks are valued $10k more than my original investment, I can sell them & pocket the profit. What about for cryptocurrency?

Same as stocks and the crypto market is always open.

 

[Germinator]

How does one cash out cryptocurrency? In stocks, if my stocks are valued $10k more than my original investment, I can sell them & pocket the profit. What about for cryptocurrency?

Same as stocks and the crypto market is always open.

https://www.fbi.gov/wanted/topten/ruja-ignatova/download.pdf

 

[cAPSLOCK]

Well it's been fun, @Visbek. I see no way we will come to any consensus. We have completely different worldviews. I do not value what you value, or believe what you believe.

The Keynes vs Austrian thing is fairly central. We even mean different things when we use the word inflation. I think the important part is supply inflation, and you see that to the answer to price inflation.

A lot of the push back here is of the flavor of the "greater fool" argument. (See above) I do not hold value in Bitcoin so I can cash it out later for dollars. I am not using it as a speculative investment (primarily) anymore but as a store of value. That makes me either the greater fool, or an early adopter. And any gains or losses due to the fluctuations of Bitcoin AND the dollar are a side effect. The dollar is still the unit of account. So the idea of it holding price is partly sleight of hand. In reality the dollar has inflated away the value of anyone who holds it. It's dismal. It has lost almost ALL value since 1900. Something like 98% I think.

And to keep claiming that the Fed has done such a good job keeping inflation at 2 percent (which means a loss of 97% of value over 100 years even if they COULD hit that target) is madness. Anyone who has opened a paper or their front door has seen this is not true. Buy any eggs recently? And the CPI is more sleight of hand. Lets make sure we can abuse market pressures to make it look like 2% again this year.

In REALITY we have been seeing something closer to 10% inflation since the pandemic. Someone not fluent with math might think... "well 10% is not that bad"... or "Its just 5x more than the target". But I trust you understand why this is false comfort.

Part of the reason bitcoin goes UP and has never really stopped going up is the meltdown of fiat currencies.

And yes Bitcoin is quite volatile. I am fine paying that price for the freedom of not having rich men decide how much value to steal from me over my lifetime via supply inflation.

The USD goes down in value over time smoothly.
BTC goes up over time with great swings.

The Bitcoinners have a saying I find distasteful... but I cannot resist saying it today. They say it to people who just refuse to see the truth that Bitcoin has been a successful monetary asset (with novel qualities) and is emerging as a fantastic store of value if you can stomach the swings.

HFSP - Have Fun Staying Poor.

I am not in Bitcoin to MAKE money. That has been a wonderful side effect. I do not need it to go up to be rich ... anymore. I store my value in it to protect it. And i never have believed it is without risk. In fact it's biggest risk is probably the government trying to outlaw it. They would hurt their own citizens, but never stop it. China already tried.

In my humble opinion it would be foolish not to hold a small portion of value in this asset. It is, as I opened here with a few days ago, a great hedge against... well, what we seem to be seeing unfold before our eyes right now.

In 3-5 years (I think 3-12 months is more realistic honestly...) when it's gone up again to spectacular heights, and possibly crashed back down 60% don't tell me I did not warn you.

 

[Germinator]

A lot of the push back here is of the flavor of the "greater fool" argument. (See above) I do not hold value in Bitcoin so I can cash it out later for dollars. I am not using it as a speculative investment (primarily) anymore but as a store of value. That makes me either the greater fool, or an early adopter.

The Bitcoinners have a saying I find distasteful... but I cannot resist saying it today. They say it to people who just refuse to see the truth that Bitcoin has been a successful monetary asset (with novel qualities) and is emerging as a fantastic store of value if you can stomach the swings.

HFSP - Have Fun Staying Poor.

I am not in Bitcoin to MAKE money. That has been a wonderful side effect. I do not need it to go up to be rich ... anymore. I store my value in it to protect it. And i never have believed it is without risk. In fact it's biggest risk is probably the government trying to outlaw it. They would hurt their own citizens, but never stop it. China already tried.

In my humble opinion it would be foolish not to hold a small portion of value in this asset. It is, as I opened here with a few days ago, a great hedge against... well, what we seem to be seeing unfold before our eyes right now.

bitcoin and the various other crypto currencies which has came about after the subprime economic meltdown IMHO isn't immune to a loss of confidence among crypto believers

AND if there is a loss of faith there will be a "yuge" and sudden crypto meltdown because it will be seen as being essentially worthless (or at least a lot less than it is up until this point in time,...) sorta like how there was a one time frenzy in beanie babies, then the price people were willing to pay came crashing down

The Beanie Baby Boom And Bust – What Happened?

Zac Bissonnette drew on hundreds of interviews to write a book about "mass delusion and the dark side of cute."

www.wbur.org

From the Archives: The PEOPLE Article That Kicked Off the Beanie Baby Craze, as Seen in Beanie Mania

As Beanie Mania on HBO Max shows, the Beanie Babies craze started in the mid-1990s after a local mom who loved the stuffed animals profiled Ty Warner for PEOPLE Magazine and made a fad a nationwide phenomenon. Read on for the original article

people.com

at first it might sound kinda out there comparing beanie babies and bitcoin, but when you think of it BOTH are a store of value for believers

the big difference between beanie babies AND bitcoin is,... the "store of value" (for crypto believers) has the ability to take out banks and cause uncertainty in the real economy (specifically when there amount of greater fools runs out AND believers panic),... while on the other hand bean beanie babies pose no danger to the economy

truth is crypto had a pretty good mania run-up in value (which specifically ran up in value during a era of very low cost borrowing)



bottom line,... given the 2023 meltdown in the banking system AND from what I can tell it was pushed over the edge by crypto speculators,... seems karma is going to eventually payback crypto zealots for saying HFSP (NOTE karma already had hit believers who trusted FTX)

 

[Visbek]

We even mean different things when we use the word inflation....

I'm using a completely standard definition of inflation as a decline in purchasing power. When the exchange rate of BTC drops from $64,000 to $24,000? That's inflation.

The idea that inflation only counts when it's a result of changes to the money supply is ludicrous.

And any gains or losses due to the fluctuations of Bitcoin AND the dollar are a side effect. The dollar is still the unit of account. So the idea of it holding price is partly sleight of hand. In reality the dollar has inflated away the value of anyone who holds it. It's dismal. It has lost almost ALL value since 1900. Something like 98% I think.

If inflation is 2% per year, then the purchasing power of $1 will be cut in half over 20 years. But that isn't a problem, because wages also increase, and long-term investments typically have returns much higher than 2%. E.g. the S&P's average return over 50 years is over 10%.

No one knows whether BTC will exist in 5 years, let alone 50, let alone predict its price next week.

And to keep claiming that the Fed has done such a good job keeping inflation at 2 percent (which means a loss of 97% of value over 100 years even if they COULD hit that target) is madness.

Between 1990 and 2019, including two major recessions, the US inflation rate has averaged 2%. That's just a fact.

Buy any eggs recently?

You're basing inflation on one commodity that's experiencing a supply crunch? You can't be serious.

For example, used cars fell almost 20% in price in 2022. Used cars are also a heck of a lot more expensive than eggs. Why aren't you noticing that?

And the CPI is more sleight of hand. Lets make sure we can abuse market pressures to make it look like 2% again this year.

Oh, spare me. If CPI is mere "sleight of hand," then why did it go up at all during the pandemic?

In REALITY we have been seeing something closer to 10% inflation since the pandemic.

10% meaning what, exactly? 10% between January 2020 and today? 10% YoY? 10% every year?

Part of the reason bitcoin goes UP and has never really stopped going up is the meltdown of fiat currencies.

What "meltdown?"

How is this hypothetical meltdown any better than BTC dropping from $64,000 to $24,000? Than almost every major exchange turning into dumpster fires? Than 20% of BTC permanently lost?

And yes Bitcoin is quite volatile. I am fine paying that price for the freedom of not having rich men decide how much value to steal from me over my lifetime via supply inflation.

So you prefer to just lose value to a faceless mob of computers. Cool.

By the way, is BTC a great store of value for those who bought it at $64,000?

Did you know that 70% or more of BTC investors have lost money on it?

The USD goes down in value over time smoothly.
BTC goes up over time with great swings.

BTC goes both up AND down. That's the problem.

The Bitcoinners have a saying I find distasteful... but I cannot resist saying it today. They say it to people who just refuse to see the truth that Bitcoin has been a successful monetary asset (with novel qualities) and is emerging as a fantastic store of value if you can stomach the swings.

lol, no. "Fantastic stores of values" don't lose 70% of their value in 6 months, or take 70% of investors to the cleaners.

HFSP - Have Fun Staying Poor.

Tell that to all the people who lost their crypto assets when exchanges like Mt Gox and FTX failed.

I store my value in it to protect it. And i never have believed it is without risk.

"I love squaring my circles!"

The bottom line is that crypto has made all the problems it was intended to solve 1,000 times worse. The value isn't stable. It's not insured. It inflates or deflates more in a single day than the USD over an entire year. It isn't usable as a currency. It's subject to the whims of whales and crypto bros. It can be impeded by governments. It's a frequent source and target of fraud and chicanery. You can't trust your holdings with 3rd parties. You can lose it in a hard drive crash or to a phishing scam.

It's no more of a hedge than a trip to the casino.

 

[cAPSLOCK]

seems karma is going to eventually payback crypto zealots for saying HFSP (NOTE karma already had hit believers who trusted FTX)

You are making several subtle but massive errors here.

HFSP is a taunt Bitcoin Maximalists use to mock "CRYPTO" people. And FTX and what happened with it is something Bitcoinners not only were able to avoid, but PREDICTED.
Also the sorts of zealots who use that saying would never have coins on FTX in the first place (FTX had little to do with Bitcoin), and even if they did they would not LEAVE them there. (Lookup NYKNYC - another saying).

Your narrative that crypto is responsible for the bank meltdown is pretty freaking cutting edge on the propeganda front... who are you again?

It's also absolute bullshit in my humble opinion. Bitcoin (or even crypto) cannot be a meaningless lark of a bunch of libertarian nerds have gone on for 14 years, AND responsible for the meltdown of western banks. It's actually neither. But that seems to be the common polarity assigned it.

The central banks, and fractional reserves, and other modern econ shenanagains have most certainly caused that. But many of us in the Bitcoin world have known for years they would be setting up a way to villify us. Congrats on that... if only you could work in some blame for Covid?

Of course Bitcoin has nearly nothing to do with the financial meltdown, and the dirivitive based businesses (GBTC) and all the shaydy exchanges also have no effect on Bitcoin, and little to do with it in the end. I do not convolve those "businesses" and Bitcoin itself. And before you say how will people get it then? Well the Nigerians using lightning network have been able to get it without even having bank accounts... I figure we westerners can figure out a way. What's wrong with most "Bitcoin Businesses" is that they are run by, and in the style of the old guard whose chickens are landing on their roost right now.

The US has the same choice as every individual. And if they choose to be last on the lifeboat then they will be handing the crown of being the leader in the Western hemisphere to El Salvador.

The people are awakening.

 

[Visbek]

HFSP is a taunt Bitcoin Maximalists use to mock "CRYPTO" people.

Didn't you try to taunt me with it?

And FTX and what happened with it is something Bitcoinners not only were able to avoid, but PREDICTED.

Yeah? Is that how they avoided Mt Gox?

I guess you're just going to ignore how Bitcoin arbitrage was Alameda's big early play?

Your narrative that crypto is responsible for the bank meltdown is pretty freaking cutting edge on the propeganda front...

No, it's just a fact.

SVB had a lot of clients working in crypto. As the sector continued to sink, they kept withdrawing funds, and that put a lot of pressure on SVB. It wasn't the only cause, but it was certainly a factor.

It's also absolute bullshit in my humble opinion. Bitcoin (or even crypto) cannot be a meaningless lark of a bunch of libertarian nerds have gone on for 14 years, AND responsible for the meltdown of western banks.

Yes, it can.

BTC was worth very little until 3 years ago, when a bubble formed. The bubble partially popped, took out SVB, which made already-panicky people hyperventilate.

By the way, have you noticed that there's a lot less panic this week? I wonder why? Could it be that... central banks kept the system intact, in a way that didn't happen to crypto companies for the past year or so?

Well the Nigerians using lightning network have been able to get it without even having bank accounts...

Replacing Western Union is hardly the foundation for replacing global currency.

 

[cAPSLOCK]

Didn't you try to taunt me with it?

Can you only think in black and white? It is usually used by bitcoin Maxis against alt-coiners... but there's no rule.

Yeah? Is that how they avoided Mt Gox?

Exactly how *I* avoided it. I never kept any coins there. It was a shady unregulated bitcoin exchange run by a goofball. MOST exchanges even today are fairly shady. Luckily there are still good places to buy bitcoin if you want it that are legit. (Kraken, Square, CashApp, Strike and so on). But bitcoin is NOT the exchanges. You do not even need an exchange to get it or give it to someone. Those are an interface to the old infected system.

I guess you're just going to ignore how Bitcoin arbitrage was Alameda's big early play?

I can see Alameda made its dumptrucks full of money selling their own shitcoin, and being a fraudulent bunch of crooks. Bitcoin has nothing to do with them any more than the USD is somehow responsible for what they did

BTC was worth very little until 3 years ago, when a bubble formed. The bubble partially popped, took out SVB, which made already-panicky people hyperventilate.

Subjective. Bitcoin the asset reached life changing levels of value for me in 2014. But bitcoin is currently worth very little when it comes to a global asset. So this last bubble was just another anthill in the series of them so far in its 14 year journey. It won't be the last.

By the way, have you noticed that there's a lot less panic this week? I wonder why? Could it be that... central banks kept the system intact, in a way that didn't happen to crypto companies for the past year or so?

I hope so. But I think it's much like the way a junkie keeps his system intact by making a quick trip down to his plug.

Jury is still out on how we will do. Here is a graph of the discount window. Looks even crazier than a bitcoin chart. The first spike is the 2008 crisis, that second little one is covid... and here we are in a new fronteir. ALREADY crushing 2008.



You sure we're good?

And again... "crypto companies" have no more to do with bitcoin than they do the fiat currencies of the legacy system the are also connected to. FTX was not bitcoin, and was actually fairly anti-bitcoin.

Replacing Western Union is hardly the foundation for replacing global currency.

Finally we have gotten somewhere. Yes. WU should be VERY afriad and getting on board as fast as they can or end up next to Blockbuster over there on the corner.

Because there's an asset that can be transmitted anywhere in the world directly from one person to another over the internet with final settlement happening is just seconds with absolutely NO NEED for a third party to be involved at all. The Salvadorians that live here and send money back to their families are ALL using this now.

That single way Bitcoin is being used is makes it worth WAY MORE than the market cap it currently has.

You have begun to see the light! I have a flicker of hope for you!

 

[cAPSLOCK]

I hope so. But I think it's much like the way a junkie keeps his system intact by making a quick trip down to his plug.

Jury is still out on how we will do. Here is a graph of the discount window. Looks even crazier than a bitcoin chart. The first spike is the 2008 crisis, that second little one is covid... and here we are in a new fronteir. ALREADY crushing 2008.

View attachment 67441955

You sure we're good?

Yeah... I do not think this thing is over yet.


Couple hours ago from London...

Bitcoin has nothing to do with this. That's the point of Bitcoin. It is not a part of the banking system that is currently collapsing. In fact it was created in response to that exact thing as well as some other hopeful ideals like privacy, sovereignty, independence, freedom. It is not perfect. And has challenges in all those ideals.

There are PLENTY of reasons NOT to "invest" in Bitcoin. I am glad to make a list, and this is not even close to complete: It is nascent technology. That alone is scary. The flailing central banks will likely ramp up their campaign to malign it at least, and will try to destroy it as well. And they are still a powerful foe. It could be broken, or successfully attacked. And as @Visbek has pointed out over and over it is extremely volitile. And you are on your own if you do it right... holding your own keys. It is like hiding digital gold in a digital mattress. And you might get tangled up with all the shady exchanges etc if you are not educated and careful. And the list can go on...

But the tech has been running for over a decade. No attacks have been successful in destroying it yet. And you better believe all kinds of people are trying to stop it, or steal from it, etc. It is an anti-fragile system. The more it is attacked, the harder it gets. It is based on immutable math. 2+2=4 might be attacked in the social sphere, but it will always remain true. And the rules of bitcoin are in THAT realm, not the realm of men.

If I were watching what was happening in the world right now, and understood the above... I would see NO REASON why I would not hide away just a little value in it. Certainly there are other hedges. Gold (partricularly physical gold) for example. I expect that value also to increase against the fiat currencies (actually I see it as fiat dropping against gold, but that is another topic), and it is certainly more proven, and much easier to understand. Yet it has also been effectively captured by the legacy system.

One thing I am worried about... it seems the powers that be are doing their best to close the on/offramps to their system as fast as they can. This does mean that people might find it harder to "sell" your Bitcoin. But thats the thing... once you understand what it is you also understand that you are not holding it to SELL it for paper money. It is the hardest asset ever created (that is PROVABLE and I will prove it simply if asked). It may be getting harder and harder to buy this with your paper money...

I will make an offer here. I have been a Bitcoinner since 2011. I understand it better than most people. I would be glad to privately (or publically) answer questions from anyone if they like. I will help you understand how it works, how to self-custody, what to avoid, and so on. I have long thought about offering this as a paid service. But since we seem to be on the brink of some serious shit, I will gladly help any of you onto the lifeboat who want to come.

Some see it as a big digital ponzi. Others see it as a lifeboat. And the sooner you get on it the better. Obviously this is NOT investment advice. I am not even suggesting you "invest" in it. Because I guarantee you if you get on this lifeboat you will see the value you choose to store there go up and down wildly against the USD.

But for all 14 years, when you zoom out 3-4 years, the prevailing trend has been UP the entire time. I believe that trend will continue, well, for at least as long as we are alive.

Bitcoin is an idea whose time has come.

 

[Visbek]

Exactly how *I* avoided it. I never kept any coins there.

That was a smart move. However, a lot of people at the time did fall for it -- they were handling 70% of BTC transactions at the time.

More to the point is that there is nothing inherent to BTC, or those holding BTC, which makes them immune to these types of crashes.

But bitcoin is NOT the exchanges.

True... but since there is so little you can buy directly with BTC,, avoiding the exchanges significantly reduces your ability to use the currency. More on this below.

I can see Alameda made its dumptrucks full of money selling their own shitcoin, and being a fraudulent bunch of crooks. Bitcoin has nothing to do with them any more than the USD is somehow responsible for what they did

...except that FTX was a crypto exchange. Not to mention that the price of BTC dropped after the FTX crash.

Subjective.

There's nothing "subjective" about it. BTC soared from $10,000 to $60,000 in about 6 months; and I wasn't the one who came up with the phrase "crypto winter."

Jury is still out on how we will do. Here is a graph of the discount window. Looks even crazier than a bitcoin chart.

You're comparing apples to oranges. The discount window isn't an exchange rate, and it's up because banks are worried that ordinary depositors will freak out and cause a run on their banks.

And again... "crypto companies" have no more to do with bitcoin than they do the fiat currencies of the legacy system the are also connected to. FTX was not bitcoin, and was actually fairly anti-bitcoin.

In case it isn't clear, I'm deeply unimpressed with this "Bitcoin Exceptionalism." Just being bigger than other currencies doesn't mean it is any safer.

E.g. is the USD somehow immune to all potential issues facing fiat currencies, just because it's a reserve currency and used for global oil purchases? I doubt you'd accept that argument.

Finally we have gotten somewhere. Yes. WU should be VERY afriad and getting on board as fast as they can or end up next to Blockbuster over there on the corner.

Yep, but again... this hardly means that BTC is going to become a major global currency.

After all, how are people using it? They convert one currency to BTC, transmit it, and convert it back. Any cryptocurrency can perform that intermediary role, and you have to use the kinds of companies that you're spitting on -- 3rd party exchanges.

This isn't more convenient or safer. It isn't even cheaper for many transactions.

Meanwhile, you might want to cool it when crowing about El Salvador. The rollout of BTC has been a disaster, with the authoritarian government buying high and losing millions that it can't afford to lose. It wasn't popular; the government's wallet app didn't work well and was rife with fraud; the crash has reduced purchasing power for ordinary people and edged the nation closer to default; mining operations use massive amounts of electricity that can't be spared; the government even arrested critics of BTC!

Will This Be the First Country Bankrupted by Crypto?

It’s been a year since El Salvador's President Nayib Bukele adopted bitcoin as currency. Things are not going well.

www.rollingstone.com

Similarly, Ecuador's attempt to use BTC as legal tender bit it in the ass. As a result, the government of Ecuador has basically banned bitcoin and is setting up its own cryptocurrency, controlled by Ecuador's central bank.

So much for the Triumph of the Defi.

Because there's an asset that can be transmitted anywhere in the world directly from one person to another over the internet with final settlement happening is just seconds with absolutely NO NEED for a third party to be involved at all.

Except you DO need 3rd parties, to convert the currency to and from BTC. E.g. Coinbase is a big player in remittances... and they're getting hammered right now. They had minimal exposure to FTX's flameout (losing only $15 million), but guess who's talking about contagion effects? Yep, Coinbase CEO Brian Armstrong.

 

[Germinator]

You are making several subtle but massive errors here.

HFSP is a taunt Bitcoin Maximalists use to mock "CRYPTO" people.

as 'a no coiner' that isn't the sentiment/vibe I'm feeling from crypto zealots and bitcoin maximalists

Your narrative that crypto is responsible for the bank meltdown is pretty freaking cutting edge on the propeganda front... who are you again?

It's also absolute bullshit in my humble opinion. Bitcoin (or even crypto) cannot be a meaningless lark of a bunch of libertarian nerds have gone on for 14 years, AND responsible for the meltdown of western banks.

since the 2023 bank meltdown actually started in my neck of the woods at Silvergate which had its HQ in La Jolla, I'll openly admit I'm just another knucklehead who uses 'A series of tubes' to try and put things into perspective

I'll also admit I'm not at expert when it comes to crypto currencies but sorta have been following the technical development for awhile AND FWIW share Zeihan's take on crypto





a 'dumpster fire' is an apt description looking at the overall value proposition specifically because of the technical detail aspects of cryptocurrency and bitcoin in particular looking at 'transactions' vs overall 'energy usage' doing proof of work calculations

as far a libertarian nerds working 14 years on crypto currencies,... ever consider the expression 'The Market Can Remain Irrational Longer Than You Can Remain Solvent' and ponder how it applies to situation at hand???

basically as I see things seems the market has over priced all cryptocurrencies because of 'irrational exuberance' by various players in the sector w/ more money than brains

 

[cAPSLOCK]

Do you usually post giant piles of overly large pictures?

Here's a relevant one if this is how we want to "discuss" now.



As the bank meltdown continues, my offer stands to help, free of charge anyone who wants help in understanding and/or using Bitcoin in public or by private message.

 

[Kushinator]

As the bank meltdown continues

Meltdown? Depositors have moved roughly $100 billion out of depository accounts of smaller more regional banks. There hasn't been a single depositor who has lost access to their money.

 

[cAPSLOCK]

Meltdown? Depositors have moved roughly $100 billion out of depository accounts of smaller more regional banks. There hasn't been a single depositor who has lost access to their money.

Absolutely. Have you not been seeing what is going on?

Deutsche bank collapse risk grows as experts wait for next "domino to fall"

The German bank was the worst performer on the STOXX 600, an index of European stocks, on Friday.

www.newsweek.com

And I find it strange that you, and others, think just making sure you "still have access to your money in the bank" means everything is OK and you are not losing anything. Even if the bank fails, the FDIC guarantee is good enough!

All is well!

The things the central banks do to create this "stability", particularly printing new money, is the source of the instability in the first place.

So we have access to the same $100 we had in the bank last year, but it comes at the cost of that $100 having an ever shrinking buying power. And that has accelerated to generational highs.

Hard money is the hedge. Bitcoin is the hardest asset ever created.

 

[Kushinator]

So we have access to the same $100 we had in the bank last year, but it comes at the cost of that $100 having an ever shrinking buying power. And that has accelerated to generational highs.

Interest rates move to reflect changes in purchasing power.

Hard money is the hedge. Bitcoin is the hardest asset ever created.

People aren't pulling their money to buy into Bitcoin. In fact, or was the collapse in crypto that brought about heavy withdrawing from depository accounts.

Suddenly, there was a leak about bank capital and the self fulfilling prophecy emerged until the Fed and Treasury acted to guarantee deposits and sweeps.

Crypto isn't stable enough to be a currency.

 

[cAPSLOCK]

People aren't pulling their money to buy into Bitcoin. In fact, or was the collapse in crypto that brought about heavy withdrawing from depository accounts.

Never said they were. A shame... many will wish they did.

As far the "crypto caused the bank failures narrative"... I just think that is plain silly. If bankers invested in crypto or crypto companies, then it is on them for throwing their money into scams. And that they chose to be a fractional bank to an extent they rendered themselves insolvent? That is the banks fault, not crypto's.

And as I keep saying "crypto" is 99+% scams.

Suddenly, there was a leak about bank capital and the self fulfilling prophecy emerged until the Fed and Treasury acted to guarantee deposits and sweeps.

Crypto isn't stable enough to be a currency.

Currently I use Bitcoin to store my wealth primarily. So far, with bitcoin, as long as I intend to hold my value there for >=36 months I have gained value as opposed to lost it. For example I made a Bitcoin purchace at the beginning of rht pandemic. The USD value of it has gone up and down quite a bit. But as of today it is worth ~6x what it was when I made the purcahse.

And I am not primarily buying bitcoin to "get rich quick". I am more interested in "staying not poor for as long as I can". Huge difference.

Using it is a currency is something I think will begin to happen once there are more people holding it, and more people willing to do business in it. I think the "medium of echange" utility will mature AFTER the "store of value" part. And even at my age I expect to see Bitcoin at least begin to be used as a unit of account.

 

[Kushinator]

Never said they were. A shame... many will wish...

Huh?

As far the "crypto caused the bank failures narrative"... I just think that is plain silly. If bankers invested in crypto or crypto companies, then it is on them for throwing their money into scams.

Huh?
Their depositors got butt--****ed and needed liquidity.

And that they chose to be a fractional bank to an extent they rendered themselves insolvent? That is the banks fault, not crypto's.

Huh?

Banks make loans.

And as I keep saying "crypto" is 99+% scams.

Whatever you say

Currently I use Bitcoin to store my wealth primarily. So far, with bitcoin, as long as I intend to hold my value there for >=36 months I have gained value as opposed to lost it. For example I made a Bitcoin purchace at the beginning of rht pandemic. The USD value of it has gone up and down quite a bit. But as of today it is worth ~6x what it was when I made the purcahse.

Sure. Nobody cares. Bitcoin loses are literally unprecedented. Keep talking about winning while everyone else will lose.

Using it is a currency is something I think will begin to happen once there are more people holding it, and more people willing to do business in it. I think the "medium of echange" utility will mature AFTER the "store of value" part. And even at my age I expect to see Bitcoin at least begin to be used as a unit of account.

Disagree. Too much volatility.