Which is More Valuable...

[Red Lion]

1 minute ago, Parsad said:

 

This is and should be a massive concern for everyone except the underground/criminal economy.  This is a $3T market now and I would imagine is significantly starting to hit the pocketbooks of nation states who cannot/have not been collecting taxes on this business.  As this becomes larger, I can only imagine a huge crackdown.  The fear is what dominoes fall if the price of cryptos fall when some sort of day of reckoning arrives.  Cheers!

I couldn't agree more. Again, I think it's going to be difficult to regulate or track transactions in BTC, but I suspect there will be significant effort by governments to try. 

 

It does seem like if the speculation is contained and the "bubble bursts" that BTC would become much less attractive as a means of facilitating the black market, especially if the volume from speculation dries up and the value of the BTC holdings plummets. And it's hard for me to see how these levers don't eventually end up getting pulled. 

 

The crazy thing about this run up in crypto is that there's an entire group of low level criminals that are likely millionaires with essentially untraceable and untaxed wealth, and likely many many billionaires as well. I would be surprised if there are not currently drug cartels, terrorist organizations, and organized crime with billions upon billions of BTC at these current prices, and this becomes a serious problem for governments around the world.  

 

I suspect that causing millions of millenial speculators and some hedge funds devastating losses  would be an acceptable collateral damage for many government actors. I still find BTC very unattractive for this reason along with the above mentioned lack of intrinsic value. Maybe I'm wrong, and no one is able to put this genie back in the bottle, maybe the price continues to soar, so I sure wouldn't short BTC even if I knew how. 

[SharperDingaan]

5 hours ago, Parsad said:

 

Value investors didn't have a problem with Amazon itself, but with the losses Bezos was sustaining in the early days.  Investors understood what Bezos was trying to do, but weren't sure how he was going to get there.  Bitcoin in this analogy would not be Amazon, but an Amazon product.  Basically an item being sold through an online portal/channel.  Blockchain technology would be Amazon...and I have been one of the proponents of blockchain technology for about 7 years now since Overstock.com/Patrick Byrne first introduced me to it through the creation of tZero.  I have a problem with most of the current batch of crypto...not digital currencies themselves.  Cheers! 

 

Value investors are just frustrated, because BTC is like no other asset. No CF to discount, therefore no value. No comparables, therefore no value. Unquantifiable demand vs a fixed supply, therefore no predictability. The nearest 'understandable' high-level comp? it's a tulip! its a ponzi scheme!, its a fools purchase!! Chuckle, chuckle, and move on!  

 

The reality is that a good chunk of the BTC demand is simply a version of crowd funding - putting money up simply 'cause its a good idea, goddam socialists!. Break a BTC into enough units (Satoshi) and each Satoshi becomes the equivalent of a dirt cheap Green Bay Packers Certificate. $5 for 5 certificates to put on my wall, prices each at $1 - not a big stretch for anyone. Price a Satoshi at 10 for 1c, the same way a Green Bay Packers Certificate is priced, and a BTC is worth 100K. Network effect.

 

SD  

Edited November 18, 2021 by SharperDingaan

[Blugolds]

2 hours ago, Longnose said:

 

 Yet as years have gone on we see more and more intelligent people putting trust and money behind BTC and crypto. Which begs the question why??? 

 

 

 

I see it as partially a self fulfilling prophecy..you get enough of the common crowd to jump in and some euphoria to pump up the price...much like the meme stocks..and then the big boys start to notice...but we arent talking about small numbers here....obviously the crypto market is huge...so the big boys step in to make their money off the little guys, all the kids living in their parents basement, the guy next door who heard from a friend...the hair stylist that saw something in the news..blood in the water attracts sharks...

 

The big boys step in and set up funds tailored to crypto, offer packages, guidance etc and that adds to the "credibility" of the product...perceived credibility gets more people get on board thinking that its the right move because so-and-so big fund/manager/investor has a portion of their portfolio in crypto. 

 

If there was a market trading beanie babies (remember that craze?) it wouldnt get the buy in from the big players...but if that market grew to billions...or trillions..there is no doubt that you would start to see funds getting on board in some way to make a buck...to continue the Gretzky analogy...these "intelligent people putting trust and money behind BTC and crypto" are IMO just skating to where the puck is. 

 

I saw the other day that Kevin O'leary is involved in crypto and offering a fund tracking/investing in it...and his pitch? His fund only owns coins that are....wait for it...ETHICALLY MINED!! I almost laughed out loud...he says investors are concerned with the way their coins are mined...China etc. To me that was just too much, people have no problems buying their day to day or luxury products made by kids in sweat shops in Bangladesh or China....but by god..the crypto bits in my digital wallet will be ethically mined..

 

 

[rkbabang]

3 hours ago, RedLion said:

 

I don't purport to know much about BTC intrinsic value, but one of the huge utility's of BTC, is its use in facilitating black market transactions whether it be drug dealing, human trafficking, terrorism, tax fraud, etc. This part of BTC's "user base" seems to me to poise huge risks since it gives governments around the world a strong incentive to try to regulate or track cryptocurrency in general. I don't know enough to express an opinion about the feasibility government regulation or tracking these transactions.

 

There's obviously a great deal of financial speculation involved today, probably a much higher % than black market transactions, I'm not sure how you could even estimate the break down due to the decentralized nature of BTC and other cryptocurrency transactions. 

 

I first heard about Bitcoin when it had just crossed over $1,000, and felt that it was speculative and had already had all its easy gains and passed at that time. Clearly the wrong decision in retrospect, but I have essentially continued to feel the same way the whole way up. 

Criminal activity such as drugs, human trafficking, etc, the USD is just as good and used far more often.  It is laughable to assume that BTC is being used even a fraction as much as the dollar in the drug trade currently.  
 

As far as “tax fraud” is concerned, the other name for that is “hiding money from racketeers”.  And yes the government should probably be concerned about that.

[wachtwoord]

2015 called. It wants its thread back

 

Wait, 2014, 2013 and 2012 are claiming the same thing!

[rkbabang]

2 hours ago, wachtwoord said:

2015 called. It wants its thread back

 

Wait, 2014, 2013 and 2012 are claiming the same thing!

Don't worry the same people will be on the same sides, saying the same things, in 2031 when Bitcoin is trading at $1M-$5M each and still has nothing backing it.  LOL

 

[Red Lion]

14 hours ago, rkbabang said:

Criminal activity such as drugs, human trafficking, etc, the USD is just as good and used far more often.  It is laughable to assume that BTC is being used even a fraction as much as the dollar in the drug trade currently.  
 

As far as “tax fraud” is concerned, the other name for that is “hiding money from racketeers”.  And yes the government should probably be concerned about that.

 

Sure the USD is used more frequently for street level transactions. Certainly NOT for dark web transactions. 

[rkbabang]

3 minutes ago, RedLion said:

 

Sure the USD is used more frequently for street level transactions. Certainly NOT for dark web transactions. 

 

I don't know if there is good data on this, but I find it hard to believe that the major drug cartels do much if any business in Bitcoin.  There is some relatively infinitesimal amount of retail trade on the dark web, but the illegal drug industry on planet Earth is almost entirely a USD based industry.

 

Worrying that Bitcoin is used in the drug trade today is sort of like worrying that hammers are often used in murders.  Yes, it happens, but not very often compared with other tools.   And even if Bitcoin replaces dollars in the drug trade it would just mean that it is just as bad as the dollar, not necessarily worse.  If you are going to demonize a currency because it is used by criminals then the USD should be the first thing you should want to ban in today's world.

 

[Red Lion]

1 minute ago, rkbabang said:

 

I don't know if there is good data on this, but I find it hard to believe that the major drug cartels do much if any business in Bitcoin.  There is some relatively infinitesimal amount of retail trade on the dark web, but the illegal drug industry on planet Earth is almost entirely a USD based industry.

 

Worrying that Bitcoin is used in the drug trade today is sort of like worrying that hammers are often used in murders.  Yes, it happens, but not very often compared with other tools.   And even if Bitcoin replaces dollars in the drug trade it would just mean that it is just as bad as the dollar, not necessarily worse.  If you are going to demonize a currency because it is used by criminals then the USD should be the first thing you should want to ban in today's world.

 

 

I don't think there is good data on this. 

 

I pointed out the use of BTC transactions as a political risk, and I still think it is. 

 

As you mention, using actual cash or gold is commonplace for criminals, but please explain to me how you can use physical cash or gold to facilitate electronic transactions? I readily agree that USD is probably used for the most illicit transactions, but BTC market share has been skyrocketing since inception. Even during the Silk Road era, BTC transactions were extremely common, and this was 10 years ago. 

 

So my point was that: 1) BTC has been used exponentially MORE for illicit transactions since Silk Road; and 2) the early movers that were mailing oxycontin through the mail for BTC are now multi-millionaires if they held their BTC; and 3) with more mainstream awareness I think governments around the world might try to crack down, it's already happening in China. 

 

[rkbabang]

5 minutes ago, RedLion said:

 

I don't think there is good data on this. 

 

I pointed out the use of BTC transactions as a political risk, and I still think it is. 

 

As you mention, using actual cash or gold is commonplace for criminals, but please explain to me how you can use physical cash or gold to facilitate electronic transactions? I readily agree that USD is probably used for the most illicit transactions, but BTC market share has been skyrocketing since inception. Even during the Silk Road era, BTC transactions were extremely common, and this was 10 years ago. 

 

So my point was that: 1) BTC has been used exponentially MORE for illicit transactions since Silk Road; and 2) the early movers that were mailing oxycontin through the mail for BTC are now multi-millionaires if they held their BTC; and 3) with more mainstream awareness I think governments around the world might try to crack down, it's already happening in China. 

 

 

 

But why is this Bitcoins fault.  As you agree people use dollars and gold, does that mean those things are bad? And should be banned?  Black markets will trade in whatever is valuable.  If Bitcoin is valuable someone will accept it in trade for goods and services, some of those good or services will not be legal.  So what?  A drug dealer isn't going to stop dealing drugs if you ban Bitcoin. He will go back to accepting dollars, so what is accomplished?  People use artwork and expensive watches to launder money, should we not allow the market in art or watches?   The medium of exchange is not the problem.  You are barking up the wrong tree.

 

[Dave86ch]

22 hours ago, Parsad said:

 

Digital scarcity - has no effect on tangible value or utility.

 

Programmed deflationary trajectory - only until all coins are mined.

 

Immutability - Yes, but can be replaced with tangible digital currency.

 

Blockchain rails - This is not isolated to BTC...anything can have blockchain rails.

 

Network effect - Again, not isolated to BTC...a national digital currency would have more stability, usability and would have extensive network expansion.

 

Attraction of brains incentivized and motivated to improve the network - These same brains and ideas could easily be adapted to digital currencies which have more stability, liquidity, usability and require no energy to mine.

 

Ethereum is a Turing complete machine - thus my question about the value of BTC, not Ethereum.  

 

Cheers!

 

Your statements have sense but your question was asked differently.

Edited November 18, 2021 by Dave86ch

[Red Lion]

16 minutes ago, rkbabang said:

 

 

But why is this Bitcoins fault.  As you agree people use dollars and gold, does that mean those things are bad? And should be banned?  Black markets will trade in whatever is valuable.  If Bitcoin is valuable someone will accept it in trade for goods and services, some of those good or services will not be legal.  So what?  A drug dealer isn't going to stop dealing drugs if you ban Bitcoin. He will go back to accepting dollars, so what is accomplished?  People use artwork and expensive watches to launder money, should we not allow the market in art or watches?   The medium of exchange is not the problem.  You are barking up the wrong tree.

 

I'm not barking up any tree, and I'm not saying this is bitcoin's fault. I'm just identifying what I think is a huge potential risk. 

 

I'm quite libertarian politically, but I recognize that I'm in the minority. 

 

I think regulation likely wouldn't ban BTC outright, but would probably be similar to maintaining foreign bank accounts with regulatory and disclosure burdens and stiff penalties if found in violation of the disclosure burdens. I think this could take away the speculative allure for a lot of current market volume. This is just a hunch, I'm not betting against BTC or anything. 

[Dave86ch]

22 hours ago, Spekulatius said:

 The only difference I can see is that the dollar is demanded by a large government who will hurt you if you don't pay them a part of everything you create in dollars

 

I think you got this right. Piss off the US government bad enough and these guys are coming for you regardless where you are. BTC cannot compete with this:

 

 

"You will be invited at almost every turn to believe that the coming Information Societies will be very like the industrial society you grew up in. We doubt it. Microprocessing will dissolve the mortar in the bricks. It will so profoundly alter the logic of violence that it will inevitably change the way people organize their livelihoods and defend themselves. Yet the tendency will be to downplay the inevitability of these changes, or to argue about their desirability as if it were within the fiat of industrial institutions to determine how history evolves."

 

James Dale Davidson, 1997, The Sovereign Individual: Mastering the Transition to the Information Age

 

[adesigar]

2 hours ago, rkbabang said:

Don't worry the same people will be on the same sides, saying the same things, in 2031 when Bitcoin is trading at $1M-$5M each and still has nothing backing it.  LOL

 

 Its true. I didn't see any value in it before and I still don't and probably never will (although it would have been nice to buy in the teens and sell now). BTC to me is similar to the paper used to print dollars. It has a use to transfer money and keep records but I don't see the digital gold. The tech is interesting but BTC is just an implementation and not a very good one at that. The 10 Min block time and 1MB Block size makes it inefficient unless its used for infrequent and large transactions like real estate purchases. As for the trust aspect How many nodes are there? less than 100000 I believe. With a database size that's less than a terabyte. So it would cost maybe 100,000 x $500 = $50 million to buy enough computer hardware to get to a size where someone could control the 1Trillion market cap of BTC. Most large governments could set that up in a short period(China could set it up in a weekend).  I'm sorry but it just has so many issues for me. 

[SharperDingaan]

1 hour ago, RedLion said:

I'm not barking up any tree, and I'm not saying this is bitcoin's fault. I'm just identifying what I think is a huge potential risk. 

 

I'm quite libertarian politically, but I recognize that I'm in the minority. 

 

I think regulation likely wouldn't ban BTC outright, but would probably be similar to maintaining foreign bank accounts with regulatory and disclosure burdens and stiff penalties if found in violation of the disclosure burdens. I think this could take away the speculative allure for a lot of current market volume. This is just a hunch, I'm not betting against BTC or anything. 

 

The drug dealer just collects payments in paper bills, money launders, then simply uses the banking system - same as everyone else. Pays around 3-5% commission to money launder, 20-25% for security (people, busts, bribes, infrastructure, etc). Cost wise, moving money around via BTC is a dirt cheap alternative, and simply smart business. Bribes are paid in USD, Euro, Pounds, etc for a reason! everyone wants the money, and it thins down the accumulating bales of paper bills 

 

Buy a BTC ETF, or a CME crtpto derivative, and you are not generally subject to the enhanced KYC rules - exempting much of the retail demand for BTC. If you want to transact in BTC directly you're usually a dealer, and the primary regulatory concern is money-laundering. Ongoing decision as to cost vs benefit.

 

Political risk no different to what it has always been, just more diluted over more players.

No change in the well-worn solutions either (bribes, extortion, coercion, etc.)

 

SD

[rkbabang]

1 hour ago, Dave86ch said:

 

 

"You will be invited at almost every turn to believe that the coming Information Societies will be very like the industrial society you grew up in. We doubt it. Microprocessing will dissolve the mortar in the bricks. It will so profoundly alter the logic of violence that it will inevitably change the way people organize their livelihoods and defend themselves. Yet the tendency will be to downplay the inevitability of these changes, or to argue about their desirability as if it were within the fiat of industrial institutions to determine how history evolves."

 

James Dale Davidson, 1997, The Sovereign Individual: Mastering the Transition to the Information Age

 

 

 

That was a great book.  Written 25 years ago and still 100% relevant today. I re-read it earlier this year and it holds up 100%, even if he did think some of these changes would happen more quickly than they did/are/will.   The changes in society from the printing press or the firearm took centuries, the changes from the digitalization of the world will be quicker than that, but still better measured in decades not years.  This is my favorite quote:

 

Excerpt from “The Sovereign Individual: Mastering the Transition to the Information Age”, by James Dale Davidson and Lord William Rees-Mogg, 1997:

“Disdain as a Leading Indicator
Moral outrage against corrupt leaders is not an isolated historical phenomenon, but a common precursor of change. It happens again and again whenever one era gives way to another. Whenever technological change has divorced the old forms from the new moving forces of the economy, moral standards shift, and people begin to treat those in command of the old institutions with growing disdain. This widespread revulsion comes into evidence well before people develop a new coherent ideology of change. As we write, there is as yet little evidence of an articulate rejection of politics. That will come later. It has not yet occurred to most of your contemporaries that a life without politics is possible. What we have in the final years of the twentieth century is inarticulate disdain.
  Something similar happened in the late fifteenth century, but at that time it was religion rather than politics that was in the process of being downsized.”

 

This was starting to happen in 1997, but distain for everyone in government has grown dramatically ever since. It has accelerated since the Trump election and then again after Biden's election, it has gone far beyond "inarticulate disdain" to the level of articulated hatred.  My thoughts are the hatred, disdain, distrust, and disrespect for everything government will continue to grow throughout the years accelerating with every new administration when nothing changes and the ruling class can no longer control the narrative.  Government will become a parody of itself and more and more people will be looking at it in disgust and looking to ignore it.  A non-governmental medium of exchange is a critical component of that.  whether it ends up being bitcoin or something else (I think it will be bitcoin) the technology is now commonplace and can not be put back in the bottle.

 

Edited November 18, 2021 by rkbabang

[Libs]

<A non-governmental medium of exchange is a critical component of that>

 

A+

 

Mankind has longed for a uninflatable medium of exchange for centuries. It's downright primal. Governments are unable to provide this- they can't resist the temptation of debasement. Gold has worked better than anything, but has obvious shortcomings. Bitcoin may very well do the trick and supplant gold. 

 

Sometimes I think Bitcoin's origins are so bizarre - an nine- page white paper from a mysterious, anonymous source -that critics can't get over it. It sounds like a bad movie script. There is also a resistance- a mental block, almost - that a non-government currency can even work (or should be allowed). But previous moneys seem bizarre too- seashells, cattle, salt, beads. What really matters is acceptance, security, scarcity, and portability. BTC might solve all of those. 

 

The distractions about blockchain, and the altcoins mania, just muddy the waters. They are both irrelevant. 

 

For a long time I've been hearing that a better version will come along. What properties would it have that bitcoin lacks? 

 

 

[adesigar]

4 hours ago, Libs said:

What properties would it have that bitcoin lacks? 

 

 

The property to actually use it for transactions since Bitcoin SUCKS at it. Even after the TapRoot upgrade its not much better. 

[rkbabang]

15 hours ago, adesigar said:

The property to actually use it for transactions since Bitcoin SUCKS at it. Even after the TapRoot upgrade its not much better. 

 

First value, then exchange.  People don't start using something as a medium of exchange before it is valuable, people use something of value as a medium of exchange.  You can't put the cart before the horse.  Bitcoin is now becoming valuable.  It needs to prove itself as a store of value and then people will want to use it as a medium of exchange.  There will be solutions to this.  Most small exchanges of value will be done instantly off chain (lightning network or some other financial tech) most large sums will be done in 10+ min or so directly on chain.

[SharperDingaan]

23 hours ago, Libs said:

Sometimes I think Bitcoin's origins are so bizarre - an nine- page white paper from a mysterious, anonymous source -that critics can't get over it. It sounds like a bad movie script. There is also a resistance- a mental block, almost - that a non-government currency can even work (or should be allowed).

 

The bitcoin paper owes its origins to the cypher-punk movement, and the ethos expressed in the cyberpunk manifesto. Very smart people, all adept at getting around 'the state', and most all with experience of collapsing states and the dark-side of central banking. Rebels with both brains and technical skills, who set out to change the world, and did. Resistance to 'establishment' (currency change) simply fuelled the fire, as did growing evidence of success. Anonymous and its legions of helpful hacks didn't just appear out of nowhere.

 

SD

  

Edited November 30, 2021 by SharperDingaan

[rkbabang]

47 minutes ago, SharperDingaan said:

The bitcoin paper owes its origins to the cypher-punk movement, and the ethos expressed in the cyberpunk manifesto. Very smart people, all adept at getting around 'the state', and most all with experience of collapsing states and the dark-side of central banking. Rebels with both brains and technical skills, who set out to change the world, and did. Resistance to 'establishment' (currency change) simply fuelled the fire, as did growing evidence of success. Annonmymous and its legions of helpful hacks didn't just appear out of nowhere.

 

 

Absolutely.  This goes back to at least the mid-1980s with Timothy May's "The Crypto Anarchist Manifesto" (https://groups.csail.mit.edu/mac/classes/6.805/articles/crypto/cypherpunks/may-crypto-manifesto.html).  

 

When I first got internet access in college in 1993 there were thriving cyberpunk/crypto anarchist/extropian movements on usenet (all of them related and many of the same people in the discussions).  Bitcoin was a long time in coming.

 

[SharperDingaan]

Nah, it was just that anarchist aren't very good at the collaboration thing!

 

SD