Cryptocurrencies

[james22]

21 hours ago, 73 Reds said:

Well, as someone who enjoys work much more than retirement . . .

 

Wait, what?

[wachtwoord]

19 hours ago, 73 Reds said:

Funny, I'd put those two statements in reverse. 

 

I think that perfectly illustrates your lack of understanding. As long as you dont understand Bitcoin is better gold (I shared the old Erik Voorhees article here many years back and many times since) then indeed stay away from it as you dont understand it at all.

[73 Reds]

33 minutes ago, wachtwoord said:

 

I think that perfectly illustrates your lack of understanding. As long as you dont understand Bitcoin is better gold (I shared the old Erik Voorhees article here many years back and many times since) then indeed stay away from it as you dont understand it at all.

"better gold"?  BTC doesn't have a shiny gleam to it and you can't wear it around your finger.  That's petty much what gold is good for.  And that's one thing you can't do with BTC.

[Paarslaars]

No... Gold is a store of value with a high stack to flow ratio. And BTC is better at it.

[73 Reds]

1 minute ago, Paarslaars said:

No... Gold is a store of value with a high stack to flow ratio. And BTC is better at it.

Indeed "store of value" is a concept I'll never understand.  Great businesses and desirable real estate are not only stores of value they generate additional value for their owners.  Why would anyone simply want to "store value"?

[james22]

2 minutes ago, 73 Reds said:

Indeed "store of value" is a concept I'll never understand.

 

Number go up.

[Paarslaars]

25 minutes ago, 73 Reds said:

Indeed "store of value" is a concept I'll never understand.  Great businesses and desirable real estate are not only stores of value they generate additional value for their owners.  Why would anyone simply want to "store value"?

To back your currency for instance. Remember the gold standard

[wachtwoord]

1 hour ago, 73 Reds said:

"better gold"?  BTC doesn't have a shiny gleam to it and you can't wear it around your finger.  That's petty much what gold is good for.  And that's one thing you can't do with BTC.

 

One more time, just for you: https://medium.com/lux-initiative/bitcoin-the-libertarian-introduction-c616edd8496c

 

1 hour ago, Paarslaars said:

No... Gold is a store of value with a high stack to flow ratio. And BTC is better at it.

 

Good summary.

[73 Reds]

1 hour ago, wachtwoord said:

 

One more time, just for you: https://medium.com/lux-initiative/bitcoin-the-libertarian-introduction-c616edd8496c

 

 

Good summary.

It is a good summary.  But what if I don't invest in currencies (never have, don't plan on starting now) and payment networks don't generate anything but convenience, just like the internet.  Who owns the internet?  I never suggested BTC or blockchain technology are fake; but at the same time, counterparty risk with the US dollar has never been a concern.  Proponents assume that because they can't envision risks with BTC today there will never be any risks associated with it.  That's called predicting.  From a strictly personal standpoint I stopped losing money on investments when I stopped predicting.  Any new money allocated toward an investment has to make sense based on the investment today, not in the future.  Today I can't spend BTC anywhere.  So-called "scarcity" is entirely self-created.   Therefore any comparisons to gold are misguided in that gold is a natural resource that wasn't created by humans out of thin air.   The summary acknowledges that nothing backs BTC.  I agree.  Nothing backs gold either and aside from the last 25 years, gold's very long history has generated sub-par returns compared to great businesses and income real estate.  At least gold has some utility as a shiny metal that doesn't tarnish and it has biblical and historical significance even though its real value as defined by its usefulness is way overblown.  From the standpoint of a libertarian who strives for free markets perhaps BTC might eventually provide an alternative means of payment and money transfer assuming it gains sufficient overall trust but again, this is an assumption I'm not willing to make and as an alternative to money, it is simply a tool rather than an investment or asset worth owning.  As a so-called store of value I'd much rather own gold or T-Bills because personally, I wouldn't own either one for their expected returns for long.  The end of the summary perfectly defines my view of BTC:  "A prudent person should assume Bitcoin will fail".  Since there are a world of other assets out there worth owning, I take that advice to heart.

Edited April 20, 2025 by 73 Reds
spelling

[Blake Hampton]

On 4/18/2025 at 5:46 PM, Milu said:

I would say gold is the only actual ‘money’ the world has. After using all kinds of materials (shells, salt, large stones) humans settled on gold as being the hardest form of money. Bitcoin is perhaps even harder. 

 

Petrodollar. Only problem with oil is it doesn't store well (above ground).

 

Edited April 20, 2025 by Blake Hampton

[gfp]

16 minutes ago, Blake Hampton said:

 

Petrodollar. Only problem with oil is it doesn't store well (above ground).

 

I'm sort of curious what you think the word "Petrodollar" means?

[Blake Hampton]

7 minutes ago, gfp said:

I'm sort of curious what you think the word "Petrodollar" means?

 

The point I'm trying to make is that oil is priced in dollars. People talk about gold being "base money," and that's sort of how I see crude.

[Blake Hampton]

14 minutes ago, gfp said:

I'm sort of curious what you think the word "Petrodollar" means?

I just learned that technically "petrodollars" are "U.S. dollars paid to an oil-exporting country," not the fact that oil is actually priced in dollars.

 

Edited April 20, 2025 by Blake Hampton

[wachtwoord]

1 hour ago, 73 Reds said:

It is a good summary.  But what if I don't invest in currencies (never have, don't plan on starting now) and payment networks don't generate anything but convenience, just like the internet.  Who owns the internet?  I never suggested BTC or blockchain technology are fake; but at the same time, counterparty risk with the US dollar has never been a concern.  Proponents assume that because they can't envision risks with BTC today there will never be any risks associated with it.  That's called predicting.  From a strictly personal standpoint I stopped losing money on investments when I stopped predicting.  Any new money allocated toward an investment has to make sense based on the investment today, not in the future.  Today I can't spend BTC anywhere.  So-called "scarcity" is entirely self-created.   Therefore any comparisons to gold are misguided in that gold is a natural resource that wasn't created by humans out of thin air.   The summary acknowledges that nothing backs BTC.  I agree.  Nothing backs gold either and aside from the last 25 years, gold's very long history has generated sub-par returns compared to great businesses and income real estate.  At least gold has some utility as a shiny metal that doesn't tarnish and it has biblical and historical significance even though its real value as defined by its usefulness is way overblown.  From the standpoint of a libertarian who strives for free markets perhaps BTC might eventually provide an alternative means of payment and money transfer assuming it gains sufficient overall trust but again, this is an assumption I'm not willing to make and as an alternative to money, it is simply a tool rather than an investment or asset worth owning.  As a so-called store of value I'd much rather own gold or T-Bills because personally, I wouldn't own either one for their expected returns for long.  The end of the summary perfectly defines my view of BTC:  "A prudent person should assume Bitcoin will fail".  Since there are a world of other assets out there worth owning, I take that advice to heart.

 

If you still think Bitcoin's currency that means you haven't even clicked the link. Why spend so much effort writing crap? Are you just trolling? Lol

[james22]

2 hours ago, 73 Reds said:

[Nonsense]

 

Starting fisking, but I'd only be repeating myself.

 

 

Bitcoins have value because A) they are useful and B) they are scarce. Combine those two attributes in any asset and you will discover it has a price.

 

The moment the first Bitcoin was traded to someone in exchange for something else, an exchange rate (market price) was established. Subsequent exchangers agreed or disagreed with that rate, and made further trades accordingly.

 

Bitcoin thus spontaneously developed a price, as do all things in an open market if they are sufficiently useful and sufficiently scarce.  . . .

 

Economists need only observe metals to start understanding why Bitcoins have value. After all, any strong advocate of gold or silver as money should hopefully understand why these metals should be money.

 

The answer is that these metals tend to be chosen in an open marketplace as money, because their specific properties make them useful as a means of exchange. It is the properties of gold and silver — unique to these metals — which make them excellent money.

 

They are scarce, fungible, uniform, transportable, have a high value-to-weight ratio, are easily identifiable, are highly durable, and their supplies are relatively steady and predictable.

 

Contrast other goods like chickens, or seashells, or sand, and you discover that none of them are as good on the above attributes as precious metals. Chickens can’t well be cut in half or recombined, seashells are not uniform, and sand is too plentiful to be used as money.

 

Why not other metals… why don’t we use iron as money? It’s not scarce enough — you’d need carts of it at the store to go shopping.

 

As any Austrian economist can tell you, money is merely that commodity in an open market which best satisfies the properties necessary for useful exchange.

 

Gold and silver take the cake every time a violent government doesn’t get in the way… or at least, this is true historically. But, this doesn’t mean that gold and silver are “perfect, infallible money.” Indeed, there are practical problems.

 

One can’t easily divide and combine silver coins to make change. One can’t easily send large values of gold across distance without hiring security and waiting for transport. One must pay storage fees, or risk theft at home. And, while difficult, it is possible to make fake gold and silver ingots and pass them off in trade as real.

 

So then it follows that if gold and silver are not perfect money (though admittedly the best we’ve had), perhaps mankind could discover or invent something that was even better.

 

This is the Bitcoin experiment — the question of whether Bitcoin, with its specific attributes, is an even better form of money than what the marketplace currently enjoys (or in the case of state fiat, is forced to use).

 

If the Austrians are right, and a marketplace tends to chose the medium of exchange which best works as money, and Bitcoin’s specific attributes make it excellent money, then perhaps the marketplace will, over time, increasingly use it for such.

 

The answer so far, is yes.

 

Bitcoin is finding more and more niches for early adoption, which further supports its market price, providing confidence to holders that it will retain value, and this further lends Bitcoin to be used for still more purposes.  . . .

 

Many have made the argument that “nothing backs Bitcoin.” And this is true. Bitcoin cannot be redeemed for any fixed value, nor is it tied to any existing currency or commodity.

 

But, neither is gold. Gold is not backed by anything — it is valuable because it’s useful and scarce.

 

Cars are not backed by anything, they are merely useful as cars and thus have value. Food is not backed, nor are computers.

 

All these goods have value in proportion to their usefulness and scarcity, and one merely needs to see the usefulness of Bitcoin to understand why, without backing from any government nor corporation, without being tied to any fiat currency or existing commodity, it commands a price on the market and rightly so.

[73 Reds]

17 hours ago, wachtwoord said:

 

If you still think Bitcoin's currency that means you haven't even clicked the link. Why spend so much effort writing crap? Are you just trolling? Lol

@wachtwoord Read your own summary and then get back to me.   The summary was good - what part of it don't you understand?

[TwoCitiesCapital]

On 4/19/2025 at 9:21 AM, gfp said:

The US owns, what, $870 billion worth of Gold at current market value?  US Government issued fiat is what? $20-35 trillion?

 

How is gold providing the backing that allows them to do what they do?

 

Because Americans are notoriously bad at understanding math...

 

But I agree with the premise. While the average person won't sit down and do the work to realize the current situation is untenable, nor willing to give up the services that benefit them to make it more tenable, they have 'faith' that the government is operating in a responsible manner and has assets, like gold, to back this up. It doesn't actually matter if its true or not - just that they believe it. Having large stores of gold supports that belief.

 

Dollars are backed by the 'full faith and credit' of the U.S. government. What happens to the dollar when the 'faith' is lost? 

 

21 hours ago, Blake Hampton said:

 

The point I'm trying to make is that oil is priced in dollars. People talk about gold being "base money," and that's sort of how I see crude.

 

It's not a bad framework. 'Energy' in general can be a decent store of value through time - though with more volatility than gold given its more industrial use cases. I view energy to be the most effective nominal inflation hedge over short periods of time. 

 

You might enjoy Michael Saylor's explanation of Bitcoin just being a vehicle to transfer the value of energy through time with your viewpoint. 

 

20 hours ago, Blake Hampton said:

I just learned that technically "petrodollars" are "U.S. dollars paid to an oil-exporting country," not the fact that oil is actually priced in dollars.

 

 Oil is priced in dollars. What do you think those oil-exporting countries are exporting? And what do you think the currency people are paying in is for them to receive USD? 

 

This has been the agreement since the early 1970s when the US administration made an under the table agreement (at the time) to protect Saudi interests in the middle east in exchange for Saudis selling oil only in USD and recycling the USD in US treasuries to support the currency and bond markets. 

[tede02]

@james22 I have a genuine question to your last post. When you characterize bitcoin as "useful," what do you mean? Is it useful in the sense that it doesn't suffer from some of the shortcomings of precious metals? 

[james22]

19 minutes ago, tede02 said:

@james22 I have a genuine question to your last post. When you characterize bitcoin as "useful," what do you mean? Is it useful in the sense that it doesn't suffer from some of the shortcomings of precious metals? 

 

Yes.

 

Its specific attributes make it a better form of money than gold.

[wachtwoord]

2 hours ago, james22 said:

 

Yes.

 

Its specific attributes make it a better form of money than gold.

 

You mean store of value, not money

[james22]

1 hour ago, wachtwoord said:

 

You mean store of value, not money

 

I'm using the definition of money as the: commodity in an open market which best satisfies the properties necessary for useful exchange, not as currency.

[wachtwoord]

1 minute ago, james22 said:

 

I'm using the definition of money as the: commodity in an open market which best satisfies the properties necessary for useful exchange, not as currency.

 

For exchange one tends to use the lowest quality money though: the worst store of value. The best store of value you spend last.

 

Gresham's law: bad money drives out good

[rkbabang]

On 4/20/2025 at 12:15 PM, 73 Reds said:

 But what if I don't invest in currencies

 

I keep saying and others have said.  If you think the way you do, you should not own Bitcoin.  It makes perfect sense for you to not own Bitcoin and for you to never own Bitcoin.   A lot of people invest in things and in ways I never will. Art, antique cars,  I know someone who makes a living investing in the spread between different currencies with automatic daily trades using bots and some algorithm, I'm not sure I even understand what he's doing.  He makes thousands and thousands of trades and makes a tiny bit each time.  (I can't imagine what his tax return looks like).   I will never do that, but I don't try to talk him out of doing it.  He seems to make money, so whatever.

 

[73 Reds]

14 minutes ago, rkbabang said:

 

I keep saying and others have said.  If you think the way you do, you should not own Bitcoin.  It makes perfect sense for you to not own Bitcoin and for you to never own Bitcoin.   A lot of people invest in things and in ways I never will. Art, antique cars,  I know someone who makes a living investing in the spread between different currencies with automatic daily trades using bots and some algorithm, I'm not sure I even understand what he's doing.  He makes thousands and thousands of trades and makes a tiny bit each time.  (I can't imagine what his tax return looks like).   I will never do that, but I don't try to talk him out of doing it.  He seems to make money, so whatever.

 

@rkbabang Exactly!  The point of this entire conversation is, you don't need to invest in BTC.  One or more posters here (not you) suggested those who don't own BTC will be poor, which is one of the most ridiculous comments I've read here or anywhere.  Says a lot about the poster(s).  In fact, last time I looked Berkshire held no BTC on the balance sheet; "poor" Mr. Buffett.

[Vish_ram]

In 10-15 years, two COBF investors starting out with same $ today, the one owning BTC will be far richer than the one not owing it. 

 

I’ll come back on Apr 21st, 2035 and 2040. #btcprediction