Cryptocurrencies

[rkbabang]

4 minutes ago, ValueArb said:

The current system has a ton of protections and works very well, block-chain can't replace it unless it addresses these problems just as well, and at a lower cost. 

 

I fully agree with this which is why I am not investing in any crypto other than Bitcoin at this time.  Even if you learn how to separate out the outright scams it is impossible to see what the future holds for any crypto asset or blockchain based project other than Bitcoin.  I still hold a fairly large amount of ETH, but that is a result of me buying a bunch at $8-$15 in 2016 and not having sold them all yet.   I sold some in 2021 at $4k and I made a major conversion of a significant portion of it from ETH to BTC this year.  I still hold a lot of ETH though, more than I'm comfortable with even at todays prices and I'm not sure if I'm going to keep the rest or convert it all to BTC at some point.  I certainly wouldn't buy any more.

[TwoCitiesCapital]

1 hour ago, rkbabang said:

 

I fully agree with this which is why I am not investing in any crypto other than Bitcoin at this time.  Even if you learn how to separate out the outright scams it is impossible to see what the future holds for any crypto asset or blockchain based project other than Bitcoin.  I still hold a fairly large amount of ETH, but that is a result of me buying a bunch at $8-$15 in 2016 and not having sold them all yet.   I sold some in 2021 at $4k and I made a major conversion of a significant portion of it from ETH to BTC this year.  I still hold a lot of ETH though, more than I'm comfortable with even at todays prices and I'm not sure if I'm going to keep the rest or convert it all to BTC at some point.  I certainly wouldn't buy any more.

 

I converted most of my alt coins to BTC earlier this year to capture tax losses and because I expected BTC dominance to rise. 

 

While that overall trend has been true, I would've been way better off holding onto my Chainlink  

[UK]

On 11/8/2023 at 1:16 AM, Castanza said:

You’re betting on the US system..BTC owners are betting on the global system. 
 

2-3% who comes up with those numbers? 

 

If I was forced to choose between only gold or Bitcoin and USD or any paper currency to keep my net worth forever in the future, it would be tough decision and very sad situation. Perhaps I would just spend most or at least half of it:)))

 

But I thought the idea was to compare it or bet not on US or USD, but on productive assets, which could be priced in USD, EUR, CNY, some new USD/EUR/etc, gold, Bitcoin or whatever currency in the future?

 

Isn't it the main problem with betting on gold, Bitcoin, art or other non productive assets? Meaning that 170 K tons of gold or 21 M Bitcoins or some painting will just stay the same, while productive assets will grow?

 

Kinda:

 

A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops – and will continue to produce that valuable bounty, whatever the currency may be. Exxon Mobil will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions (and, remember, you get 16 Exxons). The 170,000 tons of gold will be unchanged in size and still incapable of producing anything. You can fondle the cube, but it will not respond.

 

Or:

 

Whether the currency a century from now is based on gold, seashells, shark teeth, or a piece of paper (as today), people will be willing to exchange a couple of minutes of their daily labor for a Coca-Cola or some See’s peanut brittle. In the future the U.S. population will move more goods, consume more food, and require more living space than it does now. People will forever exchange what they produce for what others produce. Our country’s businesses will continue to efficiently deliver goods and services wanted by our citizens. Metaphorically, these commercial “cows” will live for centuries and give ever greater quantities of “milk” to boot. Their value will be determined not by the medium of exchange but rather by their capacity to deliver milk. Proceeds from the sale of the milk will compound for the owners of the cows, just as they did during the 20th century when the Dow increased from 66 to 11,497 (and paid loads of dividends as well).

[Dave86ch]

Comparing Bitcoin to gold can be a useful exercise when trying to understand Bitcoin as an abstraction.

 

However, it's important to realize that Bitcoin is a platform, a ledger of encapsulated truth where energy has been expended to preserve data. It's not a dead pile of minerals; it's a living infrastructure where it is possible to build global and instantaneous payment layers, preserve information and verify them, convert energy into scarcity, and harness untapped sources of energy.

 

I mean, who cares about FTX and a dead mineral? Bitcoin is a powerful tool that creates physical bastions in an abstraction layer of reality that we, as a species, have built in a new dimension of our perceptions.

[gfp]

Just to clarify - does everybody on this site that owns Bitcoin or other cryptocurrencies own them because they think they are going to go up in price?   (again, apparently we are all still keeping score in the USD unit of account, so yes I mean up in price against the USD).  I get that some of you are excited by the revolution but the reason you own it is that you think it is going to go up, right?

 

So separating out the reason you think it's impressive or useful - it is a bet that more people will try to fit through a narrow doorway in the future making the price of the relatively inelastic thing you own go higher?

 

There is a lot of romanticizing about the revolution but everybody I have asked (the ones who actually lower themselves to my level to answer the question) has admitted to me that the reason they own the thing is that they think it is going to go up.

[Castanza]

3 hours ago, gfp said:

Just to clarify - does everybody on this site that owns Bitcoin or other cryptocurrencies own them because they think they are going to go up in price?   (again, apparently we are all still keeping score in the USD unit of account, so yes I mean up in price against the USD).  I get that some of you are excited by the revolution but the reason you own it is that you think it is going to go up, right?

 

So separating out the reason you think it's impressive or useful - it is a bet that more people will try to fit through a narrow doorway in the future making the price of the relatively inelastic thing you own go higher?

 

There is a lot of romanticizing about the revolution but everybody I have asked (the ones who actually lower themselves to my level to answer the question) has admitted to me that the reason they own the thing is that they think it is going to go up.

 

Yes and no

 

BTC is a hedge to me. If I can purchase it at a better price against USD then that's what I try to do. But in general I DCA and don't care about the conversion price. I think there is a non-zero chance that BTC will prove very valuable from a use case in my lifetime. It may not be the only one though. But it's utility and use cases are widely observable in many parts of the globe. 

 

- Governments are already discussing CBDC which they will use to limit your purchases of certain goods and services. 

- Canada engaged in freezing assets of individuals violating their rights. For political reasons 

- US Banks have engaged in freezing assets of individuals whos businesses they did not agree with. (very prevalent) 

- Banks are beginning to reject cash payments and are requiring knowledge of "what you plan to do" with your money before they will allow you to withdraw it. 

- Government wants a cashless society so everything can be tracked. 

- IRS is cracking down on smaller and smaller cash transactions

- UN Agenda 21 is a real thing

- The World Economic Forum is a real thing

- USA Supremacy and USD hegemony is 100% not going to last. Americans 

 

 

I'm not a doomsday guy and I am by no means a prepper. I own a reasonable amount of BTC that I hold for potential future utility. I think governments fail, make poor decisions and no longer care about their citizens. I think the US specifically is headed in the wrong direction and is abandoning individual freedom. Higher spending more social programs and soon to be using 50%+ of it's tax revenue just to service the interest on it's debt. So for those reasons I hold a small amount of BTC. Could it be completely worthless? Yup! Could it never have it's use case come to fruition in my lifetime or ever? Yup....Would I ever sell some to pay off usd debt assets? Yup

 

Same reason I lock my doors at night

Same reason I keep a gun on my night stand 

Same reason I learn skills outside my career path

Same reason I stay in shape

Same reason I keep a few months of food in the pantry

 

Diversify your assets, health, wealth, and skillset. Live your life as free as you can. 

 

“The welfare of humanity is always the alibi of tyrants.”

― Albert Camus

[TwoCitiesCapital]

4 hours ago, gfp said:

Just to clarify - does everybody on this site that owns Bitcoin or other cryptocurrencies own them because they think they are going to go up in price?   (again, apparently we are all still keeping score in the USD unit of account, so yes I mean up in price against the USD).  I get that some of you are excited by the revolution but the reason you own it is that you think it is going to go up, right?

 

So separating out the reason you think it's impressive or useful - it is a bet that more people will try to fit through a narrow doorway in the future making the price of the relatively inelastic thing you own go higher?

 

There is a lot of romanticizing about the revolution but everybody I have asked (the ones who actually lower themselves to my level to answer the question) has admitted to me that the reason they own the thing is that they think it is going to go up.

 

I DCA into it adding ~$500/month give or take pending the price. Sometimes throw extra at it when bonuses are paid. 

 

I do expect the price to go up which is, in part, why I buy it. I'm not intentionally trying to lose money. But ultimately, what I care about is not it's denomination in USD but it's real purchasing power relative to other assets like houses, the S&P 500, etc and the value it affords me to have a portion of my wealth denominated in it. 

 

The reason I expect the value of it to go up is it's scarcity paired with the value it offers people in having a system of portable wealth, censorship resistant spending, and immediate access to digital payments system without requiring the current intermediaries(or fees) that exist today. 

 

At some point, the price of BTC will be more like gold. It will have been globally adopted and accepted as an asset class with a sufficiently high market cap and it's price action will likely roughly approximate population growth. But that's once it's been globally adopted. As demonstrated over the last 5-, 10-, and 14-year periods, it trounces traditional asset classes as it's going through that S-curve growth phase. 

Edited November 9, 2023 by TwoCitiesCapital

[SharperDingaan]

4 hours ago, gfp said:

Just to clarify - does everybody on this site that owns Bitcoin or other cryptocurrencies own them because they think they are going to go up in price?   (again, apparently we are all still keeping score in the USD unit of account, so yes I mean up in price against the USD).  I get that some of you are excited by the revolution but the reason you own it is that you think it is going to go up, right?

 

We hold BTC for cash equivalency diversification, and because we think it will  go up over time; volatility is part of the attraction. T-Bills (US Fed Reserve), UBS (GSIB guaranteed by most CB's), and BTC (via an ETF). Keeping 1 of the 3 entirely independent of reserve banking is just pragmatic. Net of inflation; over a 2-yr hold our real return on the T-Bills might be 50bp, 75% on UBS, and 250% on BTC.

 

We hold 'crypto', primarily for experience in its use; no different to choosing to live without a car, yet being familiar with how/where to rent and drive one. The reality is that 'crypto' implements using agile project management, and that most all today's crypto apps will either no longer exist, or look quite different five years out. We have no idea who tomorrows winners/losers might turn out to be.

 

Almost universally, blockchain and smart contracts are recognised as a key technology that will both change the world and drive the next industrial revolution. However, we're still in the very early stages, the technology is still largely a toy of the IT silo, and the business/industry applications are still evolving. Hence, this is where we spend much of our energy.

 

SD 

 

 

  

 

 

 

 

[gfp]

SD, I've heard you call so many different things "cash equivalents" it is starting to lose meaning LOL

[ValueArb]

7 hours ago, Dave86ch said:

Comparing Bitcoin to gold can be a useful exercise when trying to understand Bitcoin as an abstraction.

 

However, it's important to realize that Bitcoin is a platform, a ledger of encapsulated truth where energy has been expended to preserve data. It's not a dead pile of minerals; it's a living infrastructure where it is possible to build global and instantaneous payment layers, preserve information and verify them, convert energy into scarcity, and harness untapped sources of energy.

 

I mean, who cares about FTX and a dead mineral? Bitcoin is a powerful tool that creates physical bastions in an abstraction layer of reality that we, as a species, have built in a new dimension of our perceptions.

 

 

[rkbabang]

6 hours ago, gfp said:

Just to clarify - does everybody on this site that owns Bitcoin or other cryptocurrencies own them because they think they are going to go up in price?   (again, apparently we are all still keeping score in the USD unit of account, so yes I mean up in price against the USD).  I get that some of you are excited by the revolution but the reason you own it is that you think it is going to go up, right?

 

So separating out the reason you think it's impressive or useful - it is a bet that more people will try to fit through a narrow doorway in the future making the price of the relatively inelastic thing you own go higher?

 

There is a lot of romanticizing about the revolution but everybody I have asked (the ones who actually lower themselves to my level to answer the question) has admitted to me that the reason they own the thing is that they think it is going to go up.

 

Yes.  I own Bitcoin for a number of reasons, but the first and foremost is that I think it will increase in value in the future.  That is also the reason that I own every stock which I own as well.  I don't spend my hard earned dollars purchasing a stock because I want to support the company, or I like their product.  I do it because I think I will profit.  It is also the primary reason I purchased my vacation home.  It is also the primary reason I picked my primary residence in the town and location I did.   Whenever I buy something, I do so because I think it will be a good investment if possible.   There are other reasons I purchased Bitcoin and my homes, but the good chance that they will increase in value is the primary reason.  I wish there was a way to purchase a daily vehicle with the reasonable expectation of it increasing in value, but there isn't, which is probably why I've never been a car guy.

 

EDIT:  And notice I said "will increase in value" not "will be worth more in USD".  I fully believe that I will outlive the USD and my Bitcoin will be worth far more than it is now.  I think there is a 60% chance that you won't be able to buy Bitcoin with dollars someday. So BTC/USD price will be meaningless.

 

 

Edited November 9, 2023 by rkbabang

[Castanza]

18 minutes ago, ValueArb said:

 

 

 

This is already false....You're looking at layer 1 transactions which is equivalent to funding and settlement type transactions. Lightning network can already handle 1-3m transactions per second. 

 

https://lightning.network/

 

https://cointelegraph.com/news/bitcoin-lightning-network-vs-visa-and-mastercard-how-do-they-stack-up

 

No settlement period either for Lightning Network. 

 

Edited November 9, 2023 by Castanza

[gfp]

14 minutes ago, rkbabang said:

I fully believe that I will outlive the USD and my Bitcoin will be worth far more than it is now.  I think there is a 60% chance that you won't be able to buy Bitcoin with dollars someday. So BTC/USD price will be meaningless.

 

Fascinating stuff!

[rkbabang]

2 hours ago, TwoCitiesCapital said:

At some point, the price of BTC will be more like gold. It will have been globally adopted and accepted as an asset class with a sufficiently high market cap and it's price action will likely roughly approximate population growth.

 

 

Your last 2 posts were excellent.  I think here you made a small mistake.  When Bitcoin finally stabilizes as the base-layer of wealth in society, it will increase not with population growth, but with productivity growth in the world's economy.   The more human wealth created, the more valuable each Sat will become regardless of population growth.  The inverse is also true, if human wealth is destroyed (a major war/asteroid strike/etc) the value of each Sat will decrease.  It will always be (human wealth)/(number of Sats in existence).  Since the denominator is mostly fixed (it can decrease if some are lost) the value of each Satoshi will mostly depend on numerator.

 

[SharperDingaan]

On 11/9/2023 at 11:04 AM, gfp said:

SD, I've heard you call so many different things "cash equivalents" it is starting to lose meaning LOL

 

We just flatly refuse industry convention, and think for ourselves.

 

Fiat cash -> Issued and guaranteed by the Central Bank. T-Bill -> Issued and guaranteed by the Central Bank. Cash and T-Bill are cash equivalents, differing ONLY in liquidity/ability to convert into cash without loss. Agrees with industry convention.

 

GSIB (Globally Systemic Important Bank) -> Shares issued by the bank -> solvency guaranteed by all Central Banks that are part of the Basel Accords; systemically the same as the Central Bank guarantee supporting a T-Bill. T-Bill and GSIB are cash equivalents, differing ONLY in liquidity AND inability to convert into cash without loss. The $100 T-Bill could go to $95, the $100 GSIB share could go to 1 cent. Industry convention says it is not a cash equivalent, 'cause industry convention DOES NOT ACCOMMODATE inability to convert into cash without loss.  

 

BTC is the hated/direct competition to central bank fiat, differing ONLY in degree of utility. The $100 coin could also go to 1 cent, and industry convention again says it not a cash equivalent, 'cause industry convention DOES NOT ACCOMMODATE inability to convert into cash without loss. Industry convention ALSO says BTC has no value, 'cause there are no quantifiable future benefits to PV.  BTC at USD 34,000 says otherwise ... 

 

We just recognise the emperor (industry convention) has no clothes, and call the bluff.

Always the good anarchist!

 

SD   

Edited November 10, 2023 by SharperDingaan

[wachtwoord]

On 11/4/2023 at 8:07 PM, ValueArb said:

“A stable currency doesn't lose 80% of its value in 50 years.”

How did a “stable currency” lose 80% of its value in one year?

It didnt. Price went down. Value did not.

[wachtwoord]

On 11/6/2023 at 3:14 PM, rkbabang said:

PoS is a method for the centralization of wealth and keeping the founders/rich elite wealthy.  It's a scam which goes like this:  The founders premine a bunch of coins for themselves and their associates.  PoS makes sure that no one can ever catch up to them and that as a group they can remain in control of that blockchain.

 

PoS blockchains will never be as decentralized or secure as PoW blockchains.  And the most secure PoW blockchain will be what humans will use as the baselayer of money.

 

 

Good to read this . It means you've seen through the ETH ruse right? (Or am I completely wrong in remembering you didnt think it was a scam before? If so, sorry ).

 

Most of your posts here are upvote worthy here btw. Not attacking you at all.

 

[ValueArb]

5 minutes ago, wachtwoord said:

It didnt. Price went down. Value did not.

 

What "value"? Again, value has been traditionally defined by Graham/John Burr Williams is the future stream of payments that you are entitled to by owning an asset. Owning crypto doesn't entitle you to any future stream of payments, just the price as determined by the market.

 

Bitcoin has utility as a medium of exchange and pretty clearly that utility has increased over time. But utility doesn't fit within the value definition since it doesn't come with that stream of payments. So while it has inarguably become a better fiat replacement over time, that still doesn't give it characteristics of value. 

[ValueArb]

1 hour ago, Castanza said:

 

This is already false....You're looking at layer 1 transactions which is equivalent to funding and settlement type transactions. Lightning network can already handle 1-3m transactions per second. 

 

https://lightning.network/

 

https://cointelegraph.com/news/bitcoin-lightning-network-vs-visa-and-mastercard-how-do-they-stack-up

 

No settlement period either for Lightning Network. 

 

 

Cool, I believe you but tell him, not me. I actually don't have a dog in this particular hunt, I just thought it was funny to read two diametrically opposed claims within 5 minutes of my morning Twitter/COBF scan. The first respondent to him said "what about Ether" and his reply to that was something about it still being inefficient due to it's massive transaction duplication. Last I looked no one had brought up Lightning yet.

[John Hjorth]

How much of your capital has you long Bitcoin active [make it cyptocurrency]  allocated to this?

[rkbabang]

5 minutes ago, wachtwoord said:

 

Good to read this . It means you've seen through the ETH ruse right? (Or am I completely wrong in remembering you didnt think it was a scam before? If so, sorry ).

 

Most of your posts here are upvote worthy here btw. Not attacking you at all.

 

 

 

Yeah, I didn't initially think ETH was a scam and bought a significant amount of it.  The planned conversion from PoW to PoS , and then actually going through with it, is what changed my mind.  It took me a while, but when I finally realized what PoS was designed to do, I completely changed my mind about ETH.

 

[Castanza]

20 minutes ago, John Hjorth said:

How much of your capital has you long Bitcoin active [make it cyptocurrency]  allocated to this?

 

DCA: 5% of available investment capital goes to BTC, roughly 2.5% towards Gold, 2.5% t-bills, 1% Other 

[rkbabang]

35 minutes ago, John Hjorth said:

How much of your capital has you long Bitcoin active [make it cyptocurrency]  allocated to this?

 

As of today I am:

 

Stocks: 46.5%

Real Estate (2 homes with 100% equity): 35.6%

Bitcoin: 11.0%

ETH: 5.9%

Other Crypto: 0.9%

 

I've been buying small amounts of Bitcoin every week.  The last 6-9 months or so, the majority of new investment money outside of my 401K has gone into Bitcoin.

 

[TwoCitiesCapital]

3 hours ago, rkbabang said:

 

 

Your last 2 posts were excellent.  I think here you made a small mistake.  When Bitcoin finally stabilizes as the base-layer of wealth in society, it will increase not with population growth, but with productivity growth in the world's economy.   The more human wealth created, the more valuable each Sat will become regardless of population growth.  The inverse is also true, if human wealth is destroyed (a major war/asteroid strike/etc) the value of each Sat will decrease.  It will always be (human wealth)/(number of Sats in existence).  Since the denominator is mostly fixed (it can decrease if some are lost) the value of each Satoshi will mostly depend on numerator.

 

 

It's very possible. I haven't considered much of what would drive the price at that point outside of just fundamentals of population growth, but it makes sense that population growth is just a rough approximation of productivity

 

2 hours ago, John Hjorth said:

How much of your capital has you long Bitcoin active [make it cyptocurrency]  allocated to this?

 

At this point BTC is my only taxable asset outside of my home. 

 

As a portion of my networth, it's ~12-13%. Considering that net worth has been building for ~16-17 years, and BTC only 4 of it, it's come along way from when I started accumulating in 2019. 

 

 

[ValueArb]

3 hours ago, John Hjorth said:

How much of your capital has you long Bitcoin active [make it cyptocurrency]  allocated to this?

 

0% because this year I apparently reserve my capital only for things that go down.