Cryptocurrencies

[TwoCitiesCapital]

7 hours ago, Parsad said:

 

Lightning would only work if it is fully decentralized and off-chain.  Currently, the P2P transactions only occur with a security on-chain transaction if I understand correctly...I haven't actually conducted a transaction on Lightning, so correct me if I'm wrong.  

 

Also, what is stopping someone else from creating another competing layer 2 network that is superior and aligned with a different currency.   

 

Remember, I said I have no problem with crypto and especially blockchain networks.  I'm just saying investing in the current batch of crypto is like throwing darts.  It's not investing...it's speculation.  Cheers!

 

I'm not sure what point it is you're trying to make re: lightning network? 

 

It's a later 2 solution. BTC works reasonably well on its own, but like gold (and even USD) layer 2 solutions will remove friction and lower transaction costs.

 

You can still choose to transact in gold if you like (like the US pre-depression) or transact in physical USD (like now), but most people prefer to swipe a card (layer 2). 

 

Similarly, you can choose to spend BTC directly on chain, but many will prefer the speed and low cost that comes from the layer 2 solution in lightning network. 

 

As far as what is stopping someone from starting another layer 2 for another crypto? Nothing. But the whole point of using LN is because you believe/own/transact in BTC. The differentiation between the two will be in the base layer supporting the layer 2 - not the layer 2 itself. I don't care if someone starts a LN comparable for doge coin. Doge coin has NONE of the characteristics of money that make me want to hold/spend it. Just like Doge has failed to grab sustainable market share from BTC, so to will any layer 2 solution that supports it versus BTC. 

 

For the last 10-years, BTC has been the unequivocal leader in this regard despite thousands of cryptos being made and most falling by the wayside. I believe it will likely continue to be the leader in all things payments/store of value with only CBDCs competing on the payments front. 

Edited January 13, 2023 by TwoCitiesCapital

[wachtwoord]

7 minutes ago, Parsad said:

 

All you're doing here is stating the stupidity of owning gold.  Not actually suggesting why most current crypto currencies could actually replace fiat currencies.  

 

When you say that crypto is simply a payment system.  I agree with that.  When you say it could replace current fiat currencies as it is now...I completely disagree with that.  ITEX uses electronic barter as a payment system.  It isn't going to replace the USD.  

 

Cheers!

 

Why are you talking about cryptocurrencies? I was talking about Bitcoin: the only valuable one.

 

Crypto isn't just a payment system. Quite the opposite: an elementary payment system is slapped on top for convenience but has nothing to do with crypto.

 

Bitcoin isn't intended to replace fiat currencies (and if people habe that intention they'll be disappointed). It will significantly reduce their importance though.

[rkbabang]

^

 

8 minutes ago, TwoCitiesCapital said:

 

I'm not sure what point it is you're trying to make re: lightning network? 

 

It's a later 2 solution. BTC works reasonably well on its own, but like gold (and even USD) later 2 solutions will remove friction and lower transaction costs.

 

You can still choose to transact in gold if you like (like the US pre-depression) or transact in physical USD (like now), but most people prefer to swipe a card.

 

Similarly, you can choose to spend BTC directly on chain, but many will prefer the speed and low cost that comes from the layer 2 solution in lightning network. 

 

As far as what is stopping someone from starting another layer 2 for another crypto? Nothing. But the whole point of using LN is because you believe/own/transact in BTC. The differentiation between the two will be in the base layer supporting the layer 2 - not the layer 2 itself. I don't care if someone starts a LN comparable for doge coin. Doge Coin has NONE of the characteristics of money that make me want to hold/spend it. 

 

For the last 10-years, BTC has been the unequivocal leader in this regard despite thousands of cryptos being made and most falling by the wayside. I believe it will likely continue to be the leader in all things payments/store of value with only CBDCs competing on the payments front. 

 

Exactly.  Public blockchains are a winner take all endeavor.  People are always going to want to store their wealth in the most secure blockchain on earth.  No one will ever want to take a chance with a less secure blockchain that can be vulnerable to a 51% attack.  @Parsadkeeps saying that blockchain is the real innovation not bitcoin, but that is not true.  A blockchain is just a linked database.  If the blockchain can be edited or changed by any individual, corporation, or government, then it is no better than any other private database.  The real innovation is a publicly secured blockchain which no one controls.  And for the entirety of its existence the most secure blockchain by far has been Bitcoin.

Edited January 13, 2023 by rkbabang

[SharperDingaan]

Lot of very confused people ....

 

Per the Satoshi Nakamoto paper; BTC is just a payment app using a native coin, blockchain technology and bitcoin protocol. The native coin is BTC, It enables payment is a zero-trust environment, and 'lay' people (you and I) typically refer to it as a currency. 

 

We can use a currency BOTH to pay for things AND as an investment. If I live in the US, USD is used to pay for things. However, if I live in a Canada, using USD to pay for things is ALSO AN INVESTMENT - my 'investment' gain/loss is the number of USD purchased x the difference in FX rates when I bought/sold the USD. But I hold the USD to pay for things, its investment and store of value properties are secondary.

 

Same as BTC, nothing more than 'belief' actually 'backs' a USD. A USD bill is not supported by an actual cashflow, it's simply supported by a theoretically proportional claim on the nations net assets and tax receipts, that we 'believe' the Federal Reserve will honor. If OK with the 'In God We Trust' printed on bills - welcome to the USD! and its use as a global reserve currency. If that's a problem - welcome to the ALTERNATIVE of BTC.

 

Like it or not BTC has an IV, and the value depends on why and how long it is being held; the days market price is just the highest IV at the time. The same thing applies to each of the myriad of token on various crypto exchanges. BTC trades for more than a DogSh1te token because it has a higher IV (hedgeable CME futures/options market).  Whether you agree or not, is irrelevant.

 

Ultimately, you either 'get' this or you don't. 

 

SD 

 

 

[Parsad]

4 hours ago, wachtwoord said:

 

Lol what? Only people that don't understand Bitcoin even think it is a currency. Ofcourse it won't replace fiat currencies.

 

It's primarily a store of value (the greatest one by miles and miles).

 

Again: I'm surprised and disappointed an otherwise highly intelligent man speaks in such confidence about something which his statements show he hasn't understood much of. 

 

"It Ain’t What You Don’t Know That Gets You Into Trouble. It’s What You Know for Sure That Just Ain’t So" - Mark Twain

 

I hope when I check here in a few years more have understood what it is this topic is about.

 

That's not what most on here were arguing.  That's a completely different stance. 

 

As a store of value, it will only work if the network is functional and can provide the utility that fiat currency networks do.  There has to be price stability...liquidity...portability...security...etc.  The BTC on-chain network was not capable of that. 

 

Layer 2 networks have some promise.  That was my argument...that as things stand, it functions as a payment system, but not one that can replace fiat currency networks.  That without functional networks the currencies are worth nothing.

 

Blockchain is also in its infancy.  BTC and Ethereum may be akin to AOL and CompuServe...not Google or Meta.

 

To suggest that I don't understand what you are talking about is the result of you not making a compelling enough argument on the practical utility of crypto as it is.  If I don't agree with you, then I must not understand.  Cheers!

[SharperDingaan]

3 minutes ago, rkbabang said:

^

 

 

Exactly.  Public blockchains are a winner take all endeavor.  People are always going to want to store their wealth in the most secure blockchain on earth.  No one will every want to take a chance with a less secure blockchain that can be vulnerable to a 51% attack.  @Parsadkeeps saying that blockchain is the real innovation not bitcoin, but that is not true.  A blockchain is just a linked database.  If the blockchain can be edited or changed by any individual, corporation, or government, then it is no better than any other private database.  The real innovation is a publicly secured blockchain which no one controls.  And for the entirety of its existence the most secure blockchain b

y far has been Bitcoin.

 

Read the data from the public block (immutable) into the data base. Process within the database.

Immutability and speed combine 

 

SD

[Parsad]

6 minutes ago, rkbabang said:

^

 

 

Exactly.  Public blockchains are a winner take all endeavor.  People are always going to want to store their wealth in the most secure blockchain on earth.  No one will ever want to take a chance with a less secure blockchain that can be vulnerable to a 51% attack.  @Parsadkeeps saying that blockchain is the real innovation not bitcoin, but that is not true.  A blockchain is just a linked database.  If the blockchain can be edited or changed by any individual, corporation, or government, then it is no better than any other private database.  The real innovation is a publicly secured blockchain which no one controls.  And for the entirety of its existence the most secure blockchain by far has been Bitcoin.

 

When have I said anything different?  I've always stated that a decentralized network is essential for a functioning replacement to current fiat currency networks.  Blockchain allows those decentralized networks to exist.  End of story.  

 

My argument has always been that crypto is too volatile to replace fiat currency.  By itself, it has no value.  That blockchain is in its infancy and that the outcome/winners isn't clear.  That this isn't investing, but speculation.  What have I said different?  

 

Cheers!

[wachtwoord]

5 minutes ago, Parsad said:

 

That's not what most on here were arguing.  That's a completely different stance. 

 

As a store of value, it will only work if the network is functional and can provide the utility that fiat currency networks do.  There has to be price stability...liquidity...portability...security...etc.  The BTC on-chain network was not capable of that. 

 

Layer 2 networks have some promise.  That was my argument...that as things stand, it functions as a payment system, but not one that can replace fiat currency networks.  That without functional networks the currencies are worth nothing.

 

Blockchain is also in its infancy.  BTC and Ethereum may be akin to AOL and CompuServe...not Google or Meta.

 

To suggest that I don't understand what you are talking about is the result of you not making a compelling enough argument on the practical utility of crypto as it is.  If I don't agree with you, then I must not understand.  Cheers!

 

 

You write most people are making a different point. Those are not the proponents.

 

Also to give an example to counter your last sentence (there are many),you wrote "There has to be price stability...liquidity...portability...security...etc.  The BTC on-chain network was not capable of that."

 

That's all completely wrong and you simply state it without even arguing why you think they are true. That shows you have no clue what's going on in this specific topic.

 

I respect you but you are very very wrong here and convinced of your wrong view so I'm telling you: out of respect.

 

Thinking that Blockchain, which in isolation is simply and extremely inefficient database, is the innovation and not the combination of mining and blockchain to solve the Byzantine generals problem shows you should go back to where the discussion was in 2009, 2010 and 2011 (and even earlier by diving into the crypto punk mailluists!) If you wish to understand what's important and what's not.

[wachtwoord]

5 minutes ago, Parsad said:

 

When have I said anything different?  I've always stated that a decentralized network is essential for a functioning replacement to current fiat currency networks.  Blockchain allows those decentralized networks to exist.  End of story.  

 

My argument has always been that crypto is too volatile to replace fiat currency.  By itself, it has no value.  That blockchain is in its infancy and that the outcome/winners isn't clear.  That this isn't investing, but speculation.  What have I said different?  

 

Cheers!

 

Rkabang also doesn't call Bitcoin a fiat replacement and yet your entire reply centers around that. Do you understand why we say you have not understood? You don't respond to the points made.

[Parsad]

4 minutes ago, wachtwoord said:

 

 

You write most people are making a different point. Those are not the proponents.

 

Also to give an example to counter your last sentence (there are many),you wrote "There has to be price stability...liquidity...portability...security...etc.  The BTC on-chain network was not capable of that."

 

That's all completely wrong and you simply state it without even arguing why you think they are true. That shows you have no clue what's going on in this specific topic.

 

I respect you but you are very very wrong here and convinced of your wrong view so I'm telling you: out of respect.

 

Thinking that Blockchain, which in isolation is simply and extremely inefficient database, is the innovation and not the combination of mining and blockchain to solve the Byzantine generals problem shows you should go back to where the discussion was in 2009, 2010 and 2011 (and even earlier by diving into the crypto punk mailluists!) If you wish to understand what's important and what's not.

 

What did I get wrong? 

 

Stability...look at the volatility in BTC over the last few years, months, weeks, days.  If I value my house at $400K, and the swing in one day of BTC values it at $360K after the deal closes...how is that going to work?!  If someone invoices a company $20K, and then suddenly the next day they get $18K...how does that work?!

 

Liquidity...look at all of the wallets that are inaccessible and driving businesses into the ground because they can't get at their BTC.

 

Portability...any more portable or efficient than current fiat networks?

 

Security...hacks up the ying-yang!  Trust in the system!

 

Cheers!

[Parsad]

44 minutes ago, rkbabang said:

Bitcoin is the most secure blockchain on earth, no individual, corporation, or even government can modify or destroy it.  It is the most secure commodity on earth today.  I'd say that is pretty hard.  

 

Again, let's be clear about this.  Only if you keep your keys off any exchanges.  Otherwise it can be hacked like anything else.  Cheers!

[Parsad]

13 minutes ago, wachtwoord said:

 

Rkabang also doesn't call Bitcoin a fiat replacement and yet your entire reply centers around that. Do you understand why we say you have not understood? You don't respond to the points made.

 

I was explaining why crypto payment systems aren't going to replace fiat currency payment systems anytime soon.

 

The whole debate today started because Rka called BTC a hard asset.  It isn't.  It's an intangible asset...simple! 

 

Cheers!

[rkbabang]

14 minutes ago, Parsad said:

 

Again, let's be clear about this.  Only if you keep your keys off any exchanges.  Otherwise it can be hacked like anything else.  Cheers!

 

 

Yes, only if you don't give someone else your Bitcoin and trust them with it.  The same for money with banks.  I know there is FDIC deposit insurance because the government wants you to trust your bank, but if you have an amount above that in the bank when it fails it is gone.  The whole point of crypto is that it is trustless, you don't have to trust anyone to hold it for you.   If you do just give it all to someone else to hold and hope for the best, well stupid is as stupid does.

 

[wachtwoord]

21 minutes ago, Parsad said:

 

What did I get wrong? 

 

Stability...look at the volatility in BTC over the last few years, months, weeks, days.  If I value my house at $400K, and the swing in one day of BTC values it at $360K after the deal closes...how is that going to work?!  If someone invoices a company $20K, and then suddenly the next day they get $18K...how does that work?!

 

Liquidity...look at all of the wallets that are inaccessible and driving businesses into the ground because they can't get at their BTC.

 

Portability...any more portable or efficient than current fiat networks?

 

Security...hacks up the ying-yang!  Trust in the system!

 

Cheers!

 

With Bitcoin you store value for the long term, not the short, so volatility holds little relevance. If you require short term liquidity it's wise to briefly store it in a bad long term store if value with low volatility (eg USD).

 

Cant get at their wallet? That's just amateuristic. These companies should go bankrupt as they are incompetente. The market is a weighing machine.

 

Bitcoin is more efficiënt that the traditional fiat network. How many people di you recon work in the finance industry? How  much do they cost and how many resources do they use on an anual basis? Bitcoin is negligable by comparison.

 

Bitcoin has had no security hacks (there was once an underflow error in, I believe 2010, but that wasnt exploited before it was patched). You confuse lack of security by human actors with security errors in Bitcoin. Bitcoin us completely secure if you act responsibly.

[wachtwoord]

14 minutes ago, Parsad said:

 

I was explaining why crypto payment systems aren't going to replace fiat currency payment systems anytime soon.

 

The whole debate today started because Rka called BTC a hard asset.  It isn't.  It's an intangible asset...simple! 

 

Cheers!

 

RKA did not say Bitcoin will replace fiat. It won't as it's something else. Rubber will also not replace helium gas: that's non-sensical 

 

Bitcoin IS a hard asset. The harvest asset in existence that we're aware of. I won't repeat here again of why it is. You can scroll back if you are interested in learning why.

[wachtwoord]

7 minutes ago, rkbabang said:

 

 

Yes, only if you don't give someone else your Bitcoin and trust them with it.  The same for money with banks.  I know there is FDIC deposit insurance because the government wants you to trust your bank, but if you have an amount above that in the bank when it fails it is gone.  The whole point of crypto is that it is trustless, you don't have to trust anyone to hold it for you.   If you do just give it all to someone else to hold and hope for the best, well stupid is as stupid does.

 

 

This. Parsad is saying: if you give someone the keys to your car he can drive of with it!

 

No shit Sherlock

(Hope it's clear this is meant in jest).

Edited January 13, 2023 by wachtwoord

[Parsad]

24 minutes ago, wachtwoord said:

 

With Bitcoin you store value for the long term, not the short, so volatility holds little relevance. If you require short term liquidity it's wise to briefly store it in a bad long term store if value with low volatility (eg USD).

 

Cant get at their wallet? That's just amateuristic. These companies should go bankrupt as they are incompetente. The market is a weighing machine.

 

Bitcoin is more efficiënt that the traditional fiat network. How many people di you recon work in the finance industry? How  much do they cost and how many resources do they use on an anual basis? Bitcoin is negligable by comparison.

 

Bitcoin has had no security hacks (there was once an underflow error in, I believe 2010, but that wasnt exploited before it was patched). You confuse lack of security by human actors with security errors in Bitcoin. Bitcoin us completely secure if you act responsibly.

 

A lot of people try and use BTC for short-term as well...as a replacement for fiat currency with no scrutiny.  In fact, I would argue that most transactions are short-term in nature...not long-term buy and holds. 

 

I've never said that BTC wasn't more efficient...especially with layer 2 protocols.  That's why I believe blockchain networks are the future.  

 

When people discuss the security of BTC, you cannot exclude the exchanges where wallets are kept.  Keys are no different than e-transfers where personal/transfer information is hacked.  If you have the keys, you can do whatever the hell you want.  We've seen it...regularly...where wallets have been hacked and millions, if not hundreds of millions, stolen.

 

Cheers!

[Parsad]

30 minutes ago, wachtwoord said:

 

This. Parsad is saying: if you give someone the keys to your car he can drive of with it!

 

No shit Sherlock

(Hope it's clear this is meant in jest).

 

It's not if you give someone the keys...they steal the keys.  Big difference!  So to suggest that the network is the most secure in the world for transactions is not fully correct.  The network, like most networks, is secure...but fraud and hacks are prevalent...theft of wallets is prevalent.  Cheers!

[Parsad]

40 minutes ago, wachtwoord said:

 

RKA did not say Bitcoin will replace fiat. It won't as it's something else. Rubber will also not replace helium gas: that's non-sensical 

 

Bitcoin IS a hard asset. The harvest asset in existence that we're aware of. I won't repeat here again of why it is. You can scroll back if you are interested in learning why.

 

BTC is not a hard asset.  If anything to lend any sort of credence to your argument...it would be considered a hybrid asset.  I personally categorize it as intangible.  Cheers!

[wachtwoord]

43 minutes ago, Parsad said:

 

A lot of people try and use BTC for short-term as well...as a replacement for fiat currency with no scrutiny.  In fact, I would argue that most transactions are short-term in nature...not long-term buy and holds. 

 

I've never said that BTC wasn't more efficient...especially with layer 2 protocols.  That's why I believe blockchain networks are the future.  

 

When people discuss the security of BTC, you cannot exclude the exchanges where wallets are kept.  Keys are no different than e-transfers where personal/transfer information is hacked.  If you have the keys, you can do whatever the hell you want.  We've seen it...regularly...where wallets have been hacked and millions, if not hundreds of millions, stolen.

 

Cheers!

 

You're wrong in your assessment that most use is short term in nature. 78% of the supply is illiquid right now:

 

And of course you can exclude exchanges. There's zero need to keep Bitcoin there. That's same as including the fact that you can burn bills in the stove as a threat to the security of fiat.

[wachtwoord]

48 minutes ago, Parsad said:

 

It's not if you give someone the keys...they steal the keys.  Big difference!  So to suggest that the network is the most secure in the world for transactions is not fully correct.  The network, like most networks, is secure...but fraud and hacks are prevalent...theft of wallets is prevalent.  Cheers!

 

Steal the keys? How? That's physically impossible if you keep your keys of internet connected devices as you should. Anything is incredibly reckless behavior.

Edited January 13, 2023 by wachtwoord

[wachtwoord]

41 minutes ago, Parsad said:

 

BTC is not a hard asset.  If anything to lend any sort of credence to your argument...it would be considered a hybrid asset.  I personally categorize it as intangible.  Cheers!

 

Name something, anything, that's harder.

[jfan]

12 hours ago, wachtwoord said:

 

Hard asset has utility value directly in and of itself (intrinsic value).

 

Fiat currency does not have this and cannot have this by definition. Bitcoin does have it as there's not another good in the world that you have as much (permissionless) control over and which is as hard to seize (factually not legally).

 

Gold has it too but much less good than Bitcoin: it's easier to seize, harder to authenticate,  easier to block, harder to store, slower and harder to move and harder to divide. Plus it's supply is much less sure.

I tried to find a good link explaining the difference between a hard and soft asset but my brief search came up lacking. This was a fair one on the subject: https://fundrise.com/education/real-estate-is-a-hard-asset

 

It seems that trying to peg assets as hard or not is similar to separating value vs growth investing. Perhaps it might be a useful exercise to examine the dichotomies of descriptors/characteristics of an asset:

1) atoms/tangible/physical vs bits/intangible/non-physical (emotive, cognitive, psychological)

2) scarce/non-reproducible/non-replaceable vs plentiful/reproducible/easy to substitute

3) directly serves a basic human need (Maslow's hierarchy of needs) vs indirectly acts as a conduit to satisfy a basic need (eg financial assets)

4) Unencumbered/Bearer asset vs Derivative of another asset/promise of an authority or institution

5) Requires energy to produce vs Requires human consensus/policy to produce

 

 

These are some of the distinctions off the top of my head. Any others?

BTC:

1) Intangible

2) Scarce

3) Indirect conduit

4) Unencumbered

5) Requires energy to produce

Edited January 14, 2023 by jfan

[crs223]

Battling over the definition of words… this thread is a waste of brain cells!

[jfan]

Not that I'm a genius but Claude Shannon spent significant time and effort studying the mathematics of juggling, wrote poetry, and rode unicycles at bell Labs writing chess programs for fun.

I just prefer to spend my part of time and brain cells exploring ideas even if it leads nowhere but just satisfy my curiosity. Hopefully this helps reduce the probability of developing Alzheimer's.