View Full Version : The Future of Money and Historical Perspective
I follow Andreas Antonopolous regularly because I haven't found any more knowledge and inspiring speakers.
https://www.youtube.com/watch?v=3mUcpsbnhGE
I see Bitcoin distinguished itself as the worst-performing currency of 2014.
http://www.bloombergview.com/articles/2014-12-23/and-2014s-worst-currency-wasbitcoin
I see Bitcoin distinguished itself as the worst-performing currency of 2014.
http://www.bloombergview.com/articles/2014-12-23/and-2014s-worst-currency-wasbitcoin
Yes, treating Bitcoin, the currency, as an investment, because its market cap, is like investing a penny stock: volatile. But that doesn't mean much. Mostly, people don't carry a currency like the U.S. dollar to make a profit, they use it because its accepted and they can get goods and services with them. That is, one doesn't want dollars because one thinks it will outperform the Euro next year. The price of Bitcoin is a distraction because it is in its infancy.
Venture capitalist investing in the underlying block chain technology however is increasing dramatically which demonstrates the value of the technology as the future of money:
V.C. investment 2012: 2.10 million
2013: 93.84 million
2014: 314.73 million YTD
http://www.coindesk.com/bitcoin-venture-capital/
Infrastructure is being created all over the world at a dizzying rate. Job creation in the field is growing at a similar clip comparable to the capital investment rate. Dell, Amazon, CVS, Paypal, Subway, Overstock.com, Target, Ebay are just some of the big names now accepting it.
The price of Bitcoin is a distraction because it is in its infancy.
I agree that losing 56% of the value of your account in a year would be very distracting.
Apart from a few currency specialists, people carry the dollar and instruments denominated in dollars because they believe the dollar will hold its value better than the alternatives until they’re ready to spend it. Bitcoin performed miserably in that respect.
As far as the future of money goes, I see three issues. The technology itself could prove more vulnerable to interference than the evangelists are proclaiming. The level of Bitcoin-related fraud seems higher than a reasonable trader would want to risk. Finally, if it were to become an annoyance to national governments, they could simply abrogate contracts denominated in bitcoins the way the U.S. abrogated contracts denominated in gold back in the thirties.
Yossarian
12-26-14, 5:20pm
Mostly, people don't carry a currency like the U.S. dollar to make a profit, they use it because its accepted and they can get goods and services with them. That is, one doesn't want dollars because one thinks it will outperform the Euro next year.
The dollar is my functional currency. For me to use a currency other than the dollar I need to have a motivation- access to goods or services not available in dollars, gain/hedge, etc.
Is there a reason to consider using bitcoins other than novelty? I don't see a motivation other than speculation.
That emoticon above did not come from me.
No idea how it got in there. ???
I agree that losing 56% of the value of your account in a year would be very distracting.
Just like stocks, you only lost if you realized losses by selling.
Apart from a few currency specialists, people carry the dollar and instruments denominated in dollars because they believe the dollar will hold its value better than the alternatives until they’re ready to spend it.
Yes, it's reasonable in the immediate future and those in the Weimar Republic, Argentina and most recently in Cypress had similar beliefs, among them being, 'my money is safe (or best)'. How many know that the dollar has lost almost one percent spending power per year over the last hundred years?
Bitcoin performed miserably in that respect.
Market gyrations in price are not its value, otherwise V.C.s wouldn't be pouring hundreds of millions of dollars into it. But, if one is a speculative stock investor, one understands that there are wide swings in price and they invest for the long term as part of a diversified portfolio. This technique is very lucrative and high risk given a one year time horizon. Most responsible advocates of Bitcoin don't recommend it. Notice that the title of my post is the FUTURE of money. I'm not espousing that amateur investors make larges purchases of Bitcoin for short term gains...its a red herring argument that distracts from the real innovation.
As far as the future of money goes, I see three issues. The technology itself could prove more vulnerable to interference than the evangelists are proclaiming..
How safe is your credit card number? How about the value of your dollars as BRICS aggressively moves from it and the Fed expands money supply with QE? Think bail-ins can't happen here? Besides, anyone can say such and such is possible, but is it likely is the real question. If you're saying it is probable what is that based on?
The level of Bitcoin-related fraud seems higher than a reasonable trader would want to risk.
What fraud is that? I've bought it, used it, held it. I control the security. If I let someone else do it, like Mt.Gox for example, then I'm at risk because I gave my private keys to a third party like people do with banks.
Finally, if it were to become an annoyance to national governments, they could simply abrogate contracts denominated in bitcoins the way the U.S. abrogated contracts denominated in gold back in the thirties.
It doesn't sound like you watched the video.
By the time banks with government names (Federal Reserve) figure out what to do about cryptocurrencies, it will be too late because this is a global (not just U.S.) electronic currency as content type and stopping information from propagating on the internet is about as plausible as it was stopping shortwave radio code propagation during WWII.
The dollar is my functional currency. For me to use a currency other than the dollar I need to have a motivation- access to goods or services not available in dollars, gain/hedge, etc.
Is there a reason to consider using bitcoins other than novelty? I don't see a motivation other than speculation.
In the West, we have the least need to use Bitcoin at the moment, unless you're a foreigner sending money home by remittance which is costly. There are, however, billions of people in underdeveloped countries who have no access to banking who could use it and are starting.
I gave my son twenty-five bucks worth and told him to hold on to it for a while and maybe add to it here and there, maybe five bucks once in a while. If he finds out Subway takes it, it may not last though.
If one has money they know they won't need for at least three years, I'd invest one to five percent of my disposable income in it. Why, because it has become increasingly stable and the long term outlook is favorable for growth. People have already bought expensive homes, businesses, cars, etc., with this currency. There is a Bitcoin ATM in the halls of Congress! It's not going anywhere if people keep using it, no matter what "authorities" and hackers do. They'll only make it more resilient. You can't undo an idea that is spreading like wildfire.
ApatheticNoMore
12-27-14, 2:05am
Will this currency lead to: fairly valuing natural capital and natural resources, the soils ability to regenerate, the value of the oceans ecosystem, the value of a stable climate, the undiscounted value of the future etc.. Will it lead to: valuing durability, efficiency, rather than the wastefulness that is gdp, valuing that which increases human well being, not which is made necessary by detracting from it? Will it lead to valuing: all the unmonetized social capital that makes up life, all the unpaid labor that makes everything else possible? Will it lead to valuing individuals for thier own sake as more than just economic machinery? Valuing human potential where it is wasted? Valuing peace over war? Valuing cooperation?
Utopian? Well yes if one expects it out of whole cloth and for the world to be entirely perfect. That's not the point. The point is: so much of what is destructive these days is driven by money. And people have done a lot of thinking on currency and human values (Thomas Greco, Bernard Lietaer) and how currency could be used to value and encourage all that is valuable, and I think that's the desirable direction to head in.
There are a number of independent local currencies that basically head in that direction, ANM, individual human time, goods and services represented by an exchangeable certificate. I think when things get too global, what was a fair means of exchange becomes too nebulous and open to speculation, which ... basically negates any honest valuation of what a unit of the currency represents. It's a conundrum; local money will probably remain honest but it's impractical, global money becomes a casino currency favoring the lucky, the amoral and the rich.
Yossarian
12-27-14, 12:51pm
And people have done a lot of thinking on currency and human values (Thomas Greco, Bernard Lietaer) and how currency could be used to value and encourage all that is valuable, and I think that's the desirable direction to head in.
There are a number of independent local currencies that basically head in that direction, ANM, individual human time, goods and services represented by an exchangeable certificate. I think when things get too global, what was a fair means of exchange becomes too nebulous and open to speculation, which ... basically negates any honest valuation of what a unit of the currency represents. It's a conundrum; local money will probably remain honest but it's impractical, global money becomes a casino currency favoring the lucky, the amoral and the rich.
I am sure this is well intended but I find it hard to see the point of it all. Currency is just an exchange medium. It doesn't matter if it is dollars or cattle or seashells or gold or whatever, all that matters is that people agree to use it. It is necessarily amoral and exponentially more useful the more people agree to use the same medium, which is contrary to creating illiquid local substitutes. What's the point of measuring "individual human time, goods and services represented by an exchangeable certificate" when you can do the exact same thing with dollars or Euros, only better? Currency is just a tool that solves the problems of scale and transferability in barter. No conundrums at all.
Now how you manage it to provide a secure store of value is also important, but that's a different kettle of fish.
Every few years my community investigates setting up a local currency.
The arguments advanced in favor of the use of "local currency" tend to be:
- it keeps money circulating within our community, instead of having it leak out to the mainland/mainstream economy so rapidly.
- it encourages production and consumption of local goods
- it encourages use of our fallow local resources, especially labor
- it provides an easy method of implementing price discrimination to fleece tourists while charging locals a sane amount for goods
- it facilitates non-IRS/non state Department-of-Revenue transactions :-)
The folks on a nice island in Canada right next to us have been doing this for ~15 years or so:
http://www.saltspringdollars.com/
http://en.wikipedia.org/wiki/Local_currency
I am sure this is well intended but I find it hard to see the point of it all. Currency is just an exchange medium. It doesn't matter if it is dollars or cattle or seashells or gold or whatever, all that matters is that people agree to use it. It is necessarily amoral and exponentially more useful the more people agree to use the same medium, which is contrary to creating illiquid local substitutes. What's the point of measuring "individual human time, goods and services represented by an exchangeable certificate" when you can do the exact same thing with dollars or Euros, only better? Currency is just a tool that solves the problems of scale and transferability in barter. No conundrums at all.
The thing is, the number of dollars, euros etc. are not at all limited by the creation of actual wealth. They are directly tied to debt-based value creation. Tying certificates or coins or dollars or pet gerbils to an actual asset, whether tangible goods or intangible services, is the different kettle of fish that ideally presents a non-debt-based, possibly inflation-proof local economy.
In re bitcoin, bitcoin is not limiting itself to real asset backing, as far as I know, and so I see no reason why it would turn out any differently than other global currency, except that it's playing with a different set of rules and so, for the time being, favoring a different set of players.
I have a suggestion: use a valuable metal, such as copper bars for your medium of exchange. Stamp the weight on them, and the name of your Island, and a serial number. Yes, they may weigh something, but it will be okay. Anything else, with no intrinsic value, could be considered counterfeiting.
There is a misconception that money needs to be a store of tangible value. This country had a successful fiat system before the Revolutionary War for a long time because it was responsibly controlled in relationship to goods and services, no inflation and no boom busts (which do not occur naturally in healthy economies). Its value was usage level and trust in the issuer(s).
Kib is exactly right, Yossarian, about the currency being used today. We haven't had substance redeemable currency for many decades. But, we don't have just simple fiat either. We are using debt instruments as dollars. All dollars are created out of a demand for debt, as debt and the interest owed is not created with which to pay back that debt (read Modern Money Mechanics issued by the Federal Reserve). This means that most fiat currencies are Ponzi schemes that slowly decrease spending power. It is a profit system for banks and explains a lot. So, what is used as money matters a lot.
The value in Bitcoin is that it is frictionless currency: no third party interlopers and near instant transferability with a level of encryption that used on nuclear silos. There is also incredible value in the block chain itself which is open source consensus of all transactions of any type.
There is no such thing as "intrinsic" value. What is abundantly available and needed has no value, even if it is food. That which is limited/scarce and desired is what gives a thing value. Bitcoin has that feature also. It is deflationary.
What determines value is not a government or old ideas of value about things like gold. Value is determined by demand/scarcity and a currency is determined by the level of usage, no matter what any one says.
In Kenya a currency evolved out of cell phone minutes because the people saw its utilitarian value. It now accounts for 40% of the Kenyan GDP. Bitcoin also has amazing utilitarian value far beyond a currency. Currency is just the first app.
Will this currency lead to: fairly valuing natural capital and natural resources, the soils ability to regenerate, the value of the oceans ecosystem, the value of a stable climate, the undiscounted value of the future etc.. Will it lead to: valuing durability, efficiency, rather than the wastefulness that is gdp, valuing that which increases human well being, not which is made necessary by detracting from it? Will it lead to valuing: all the unmonetized social capital that makes up life, all the unpaid labor that makes everything else possible? Will it lead to valuing individuals for thier own sake as more than just economic machinery? Valuing human potential where it is wasted? Valuing peace over war? Valuing cooperation?
Absolutely, no to all of the above. No currency that is conditional give and take will. Some currencies are closer than other though.
Your questions are very important, thanks.
Utopian? Well yes if one expects it out of whole cloth and for the world to be entirely perfect. That's not the point. The point is: so much of what is destructive these days is driven by money. And people have done a lot of thinking on currency and human values (Thomas Greco, Bernard Lietaer) and how currency could be used to value and encourage all that is valuable, and I think that's the desirable direction to head in.
Right, Bitcoin is not Utopian, except maybe in contrast to what we have now.
Huh? No Copper, No Sail Fones.
Yossarian
12-27-14, 8:11pm
Sorry, but I feel you folks are zig zagging all over the place.
The thing is, the number of dollars, euros etc. are not at all limited by the creation of actual wealth.
So have we moved on from the whole values based currency to a discussion of value based currency? The relationship between the money supply and economic growth is a known, if not fully understood issue. But I don't think bitcoin or barter certificates are the answer.
There is a misconception that money needs to be a store of tangible value. This country had a successful fiat system before the Revolutionary War for a long time because it was responsibly controlled in relationship to goods and services, no inflation and no boom busts (which do not occur naturally in healthy economies). Its value was usage level and trust in the issuer(s).
Kib is exactly right, Yossarian, about the currency being used today. We haven't had substance redeemable currency for many decades
.....
There is no such thing as "intrinsic" value. What is abundantly available and needed has no value, even if it is food. That which is limited/scarce and desired is what gives a thing value. Bitcoin has that feature also. It is deflationary.
What determines value is not a government or old ideas of value about things like gold. Value is determined by demand/scarcity and a currency is determined by the level of usage, no matter what any one says.
Yes, that is my point. So far most people are willing to hold dollars or euros because the convention is steady and supply and demand have been roughly equal. The real value of what I can exchange my dollars for when I defer my purchase and hold dollars over time is acceptable. The dollar stores the value of my labor generated at time A and lets me buy goods or services later at time B at acceptable levels. What's not to like? I don't see how you can promote a currency that doesn't store value.
There is a risk that could change in the future. None of this convinces me local exchange certificates or bitcoin will solve the worlds problems.
I guess for me, the problem with world currency is that money which grows exponentially through debt is dangerous. The "wealth" through debt creation scheme rigs itself so obviously in favor of the rich, whether we're talking individuals or countries, and so much worse for those on the bottom. It also encourages the rape of the planet as the increasingly poor have less and less leverage about protecting the planet's assets essential for long term stability. IMHO, the more money is created purely as a matter of real resources or time expenditure, the more checks and balances exist. I don't know that local currencies are the answer, but a revamp that doesn't include debt-based wealth creation is crucial.
Yossarian
12-28-14, 11:20am
I guess for me, the problem with world currency is that money which grows exponentially through debt is dangerous. The "wealth" through debt creation scheme rigs itself so obviously in favor of the rich, whether we're talking individuals or countries, and so much worse for those on the bottom. It also encourages the rape of the planet as the increasingly poor have less and less leverage about protecting the planet's assets essential for long term stability. IMHO, the more money is created purely as a matter of real resources or time expenditure, the more checks and balances exist. I don't know that local currencies are the answer, but a revamp that doesn't include debt-based wealth creation is crucial.
I read what you are saying, but I can't follow what you mean. How does the money supply do any of that? If you could waive your magic wand and cut the number of dollars in existence by 95%, what effect would that have on anything?
Yes, that is my point. So far most people are willing to hold dollars or euros because the convention is steady and supply and demand have been roughly equal. The real value of what I can exchange my dollars for when I defer my purchase and hold dollars over time is acceptable. The dollar stores the value of my labor generated at time A and lets me buy goods or services later at time B at acceptable levels. What's not to like? I don't see how you can promote a currency that doesn't store value.
Acceptance and adoption. As acceptance grows, price or exchange value levels out. The world has never had currency issued by algorithm before. Do you think gold has always been accepted? Someone thousands of years ago decided it was valuable and then others agreed until agreement became widespread adoption was achieved. That process is now beginning with cryptocurrencies.
We have a currency system that is designed to create levels of scarcity that encourages the individual to think only about their own well being. It works well. As kib so eloquently pointed out there are many problems the state issued fiat system creates that are not immediately visible to individuals who don't look. It's also designed to fail and that failure is close.
Countries are beginning to hoard gold, BRICS are moving away from the U.S. dollar, China has taken action to help Russia in a move that was heretofore done by the institutions of Bretton Woods. We are going to need a system in place to facilitate world trade that is not predatory, unsustainable and encouraging of environmental degradation.
There is a risk that could change in the future.
There is a bigger risk: that it won't change.
None of this convinces me local exchange certificates or bitcoin will solve the worlds problems.
Understanding the technology and the current system is what it takes and those who do are putting hundreds of millions of dollars behind that understanding.
Yossarian
12-28-14, 1:00pm
We have a currency system that is designed to create levels of scarcity that encourages the individual to think only about their own well being. It works well. As kib so eloquently pointed out there are many problems the state issued fiat system creates that are not immediately visible to individuals who don't look. It's also designed to fail and that failure is close.
Countries are beginning to hoard gold, BRICS are moving away from the U.S. dollar, China has taken action to help Russia in a move that was heretofore done by the institutions of Bretton Woods. We are going to need a system in place to facilitate world trade that is not predatory, unsustainable and encouraging of environmental degradation.
I think this thread is in contention for using the most words without actually saying anything. Just vaugue disparaging criticisms without specifics. All you are proposing is moving from one arbitrary medium to another. Yes other countries would like to move away from the dollar standard but they are not benevolent rainbow crusaders, it's pure economic self interest.
I don't want to miss an opportunity to make things better. Seriously, if bitcoin is the ticket then I'll buy some tomorrow. But it will take more than plattitudes. So let's try breaking this into pieces- in your own words, how will bitcoin create a system that will save the environment?
If one has money they know they won't need for at least three years, I'd invest one to five percent of my disposable income in it.
What does "invest" constitute in this context? What form would the investment take? What yield would you project over the next 5 years? What's the risk?
I think this thread is in contention for using the most words without actually saying anything. Just vaugue disparaging criticisms without specifics. All you are proposing is moving from one arbitrary medium to another. Yes other countries would like to move away from the dollar standard but they are not benevolent rainbow crusaders, it's pure economic self interest.
I don't want to miss an opportunity to make things better. Seriously, if bitcoin is the ticket then I'll buy some tomorrow. But it will take more than plattitudes. So let's try breaking this into pieces- in your own words, how will bitcoin create a system that will save the environment?
I have no idea. :)
I do agree with Xmac's assertion that our current monetary system is predatory, and that this predation / greed can easily overlook the planet's needs as something superfluous in comparison to the bottom line, when in reality, the planet's needs ARE the bottom line. I do not understand enough about bitcoin to know how / if it mitigates predation by attempting to divide power / wealth more evenly, by maintaining a value more closely based on real-world assets and effort as opposed to speculation or debt-based 'value'. That seems like a step in the right direction to me, so if that is the direction of bitcoin, I see the benefit. It is certainly the direction of local currency trends.
...our current monetary system is predatory...
What does that mean?
... the planet's needs ARE the bottom line.
What are "the planet's needs"?
What does "invest" constitute in this context? What form would the investment take? What yield would you project over the next 5 years? What's the risk?
http://www.investing.com/currencies/btc-usd-technical
Our current system is a system using non-substance redeemable fiat currency that is debt based. It is issued by an unconstitutional entity: The Federal Reserve which is an association of private banks, not in any way part of the government. It is as Federal as Federal Express and it has no legitimate reserves of its own.
The "money" supply is expanded over time that destroys purchasing power. When Federal Reserve Notes (not dollars) are used to extinguish a debt, it creates a novation. Which is using a debt to pay another debt.
This system also makes the U.S. government a debtor to which taxpayers are the surety. According the government's own Grace Commission, established by R. Reagan, every tax dollar sent to the I.R.S. does NOT go to the government for services, it goes to pay the national debt which is owed to a group of private bankers (the Fed) who bring no consideration to any loan, only the usurped power to create money.
So, all your Federal taxes are diverted and spending power eroded. Get the predatory bit yet?
As I referenced earlier, money creation is in the Federal Reserves own literature, Modern Money Mechanics among other places. The truth right under our noses.
I don't have any inclination to go into how this system and its predatory lending has been exported all over the world. The U.S. has more than enough verifiable evidence.
http://www.investing.com/currencies/btc-usd-technical
I view technical analysis as "homeopathy for investing". So, not such a useful link.
Looks like by "investing in bitcoin" you mean simply purchasing bitcoin?
... It is issued by an unconstitutional entity: The Federal Reserve ...
Ah. The usual anti-Fed conspiracy-theory quackery. Got it.
http://rationalwiki.org/wiki/Federal_Reserve#What.27s_wrong_with_the_anti-Fed_crankery.3F
I think this thread is in contention for using the most words without actually saying anything. Just vaugue disparaging criticisms without specifics. All you are proposing is moving from one arbitrary medium to another. Yes other countries would like to move away from the dollar standard but they are not benevolent rainbow crusaders, it's pure economic self interest.
Did I suggest otherwise? Btw, they ARE moving from the dollar, in that they signed an agreement for such.
I don't want to miss an opportunity to make things better. Seriously, if bitcoin is the ticket then I'll buy some tomorrow. But it will take more than plattitudes. So let's try breaking this into pieces- in your own words, how will bitcoin create a system that will save the environment?
Crowdfunding using Bitcoin, and other cryptocurrencies are already happening to create viable, sustainable alternative energy and other technologies that clean the environment. As adoption grows, funding will grow because people will continue to donate when they know it can be done directly and it is in their own long term self interest.
http://crowdfundbeat.com/2013/07/08/crowdfunding-for-environmental-change/
Ah. The usual anti-Fed conspiracy-theory quackery. Got it.
http://rationalwiki.org/wiki/Federal_Reserve#What.27s_wrong_with_the_anti-Fed_crankery.3F
Rationalwiki?
Really?
They're being investigated by the FBI.
Well, if you don't read the Fed's own documents......what can anyone tell you? Not much, seemingly.
I view technical analysis as "homeopathy for investing"
:laff:
Looks like by "investing in bitcoin" you mean simply purchasing bitcoin?
Yes, dollar cost averaging in over a five year time horizon would yield comparable returns to that of other similar speculative ventures. This is why it would be only part of a diversified portfolio.
What does that mean?
What are "the planet's needs"?
The ecosystem can't survive forever with the amount of tampering-for-profit that's going on. One by one the strands of the life web are being broken as we dam, strip mine, frack, burn fossil fuels, monocrop, create dioxin and myriad other "interferences" with the delicate cycles that support life on earth. If we go beyond a certain point of degradation, WE, as living animals, cannot survive; the health of the planet is what allows us to exist at all. 'The planet's need' is to have its living infrastructure left intact, and we seem perilously close to dismantling it.
The greater the financial entity, the greater its ability to tamper with that infrastructure in the name of profit. Poison a lake? Oh well the fine's only 10 million dollars, pay it, Jeeves. Smaller economic entities don't have the luxury of such devastation. While the whole "for profit" concept is a problem for the planet in the end, it is at least diluted when the power base is divided.
As far as predatory, I'm using the word to mean competitive in a way that shuts out smaller entities which might be less damaging. I see a firm connection between Big and Broken, and if a currency backed by real assets can in some way reallocate wealth across a broader base without simply taking from the rich and giving to the poor, well good deal.
And I'll say it again, what -if anything- this has to do with bitcoin is admittedly vague in my mind.
Yossarian
12-29-14, 7:52pm
the fine's only 10 million dollars, pay it, Jeeves.
Hmm, so if we were using bitcoins, the fine's only 32,000 bitcoins, pay it, Jeeves.
Not sure that would solve a lot. Maybe you shoud use Lira, at least then it would be 16 billion. Maybe that sounds more detering.
Hmm, so if we were using bitcoins, the fine's only 32,000 bitcoins, pay it, Jeeves.
Not sure that would solve a lot. Maybe you shoud use Lira, at least then it would be 16 billion. Maybe that sounds more detering.
Bitcoin doesn't single handedly stop the greed that causes humans to destroy the environment but it introduces a currency that can displace a system that encourages it.
A business, for example, like fracking is highly leveraged. Other industries that are less so still get their start up capital mainly from loans. Without loan contracts many damaging businesses wouldn't get started or continue. Bitcoin doesn't prohibit loans, however it does prohibit the creation of money out of thin air, which is what the current system does for every loan made in the system.
The unbridled money expansion over the last hundred years is a major contributing factor of unbridled consumption ergo environmental degradation.
For those that find this incredulous, you may try googleing fractional reserve lending, as well as doing the other suggested reading in this thread. Fractional (another kind of fracking) reserve lending is allowable by LAW....again, look it up. Don't take my word for it. It is there.
Deep down everyone knows that this banking system doesn't lend money it has because there has NEVER been a bank that refuses to lend money to a qualified borrower for lack of current available funds.
It's not unlike the typical wealthy man who convinces himself his young mistress or call girl is really in love with him. It's a seductive and/or comfortable little fantasy but that's all it is.
Yossarian
12-30-14, 3:02pm
Without loan contracts many damaging businesses wouldn't get started or continue.
How does bitcoin distinguish between damaging businesses you want to repress and helpful businesses you want to promote?
Your best argument for bitcoin is that it will depress the economy?
Your best argument for bitcoin is that it will depress the economy?
I'm doing a deal this week to sell an early childhood education facility its campus, at long last, so it can stop paying rent to its evil capitalist landlord (me). Part of the deal involves a...loan.
I guess Bitcoin Society would be better served if I bulldozed the place and started a pig farm.
How does bitcoin distinguish between damaging businesses you want to repress and helpful businesses you want to promote?
Your best argument for bitcoin is that it will depress the economy?
It will stunt some sectors and stimulate it in others. For example, there are literally billions of people who'll experience booming economic growth because their economic potential has been under utilized due to political and financial corruption (homegrown and imported) especially in third world countries. Bitcoin's velocity and accessibility will be very valuable features in those areas as its acceptance grows.
The international remittance market is where this is already occurring. Big predatory companies like Western Union are seeing increasing amounts of market share disappear while those in third world countries are starting to get ALL of the wealth that is being earned by their family members abroad.
In the U.S., where vast wealth is made available to large corporations who have track records of stripping the earth of resources, there would no longer be loan creation from the top down, which is how it is made available now (e.g. from a Central bank to Citi to Shell), and no/less political cover via lobbyists who influence laws favoring such. This would create a level playing field for the competition: companies that offer sustainable energy and use renewable resources.
In Germany, and in other European countries, sustainable energy is flourishing. Oil companies here have a tight hold on policy and monopolize energy. In fact, they have so much control even before lower gas prices, shale and fracking companies were already losing money, i.e. for every dollar made on oil extraction, they spent 1.30, unsustainable financially and environmentally. But, they've been able to continue with financing through junk bonds, and heavy profiteering especially when oil was above $100 a barrel.
The above assumes a world that is ultimately dominated by a cyrptocurrency very similar to Bitcoin, only with some advances in accessibility. How we get there will be interesting to say the least.
There are others that could more cohesively make the case than I, but I understand enough to know that the root problem that Bitcoin can address is the debt based money system (the primary root problem which can't be addressed by any currency or technology is the love of money which is what created the current system).
So, long term, Bitcoin has the potential to even out some or all of the imbalances in the world economy because it is not debt based or centralized. It is money/value by agreement to use math that is open source.
There's an old expression that says there's nothing new under the sun, which may be true even for Bitcoin/cryptocurrencies but I don't see any precedent for it, not on a global scale anyway.
Deep down everyone knows that this banking system doesn't lend money it has because there has NEVER been a bank that refuses to lend money to a qualified borrower for lack of current available funds.
.
Feel free to ignore this part of his post.
I think the point Xmas was trying to make is that with a more stable amount of currency there is not money being over-created and sloshing around the economy being maki vested in bad investments. Good investments like a school buying their formerly rented property will always find money available to be borrowed for such purpose (assuming, of course, that the school does actually have a reasonable likelihood of being able to repay the loan.). When unlimited quantities of money can be created, as with fractional reserve banking, malinvestment bubbles, like the recent real estate bubble and subsequent crash, are inevitable.
I'm doing a deal this week to sell an early childhood education facility its campus, at long last, so it can stop paying rent to its evil capitalist landlord (me). Part of the deal involves a...loan.
I guess Bitcoin Society would be better served if I bulldozed the place and started a pig farm.
There is a substantial difference between loans in which valid consideration is exchanged and loans in which money itself is created.
Here's your education if you can stand it:
https://www.youtube.com/watch?v=qIxhsF6JLEA
https://www.youtube.com/watch?v=p3_Q1SiRN-A
I think the point Xmas was trying to make is that with a more stable amount of currency there is not money being over-created and sloshing around the economy ...
What is the "correct" amount of currency to be in the economy?
There is a substantial difference between loans in which valid consideration is exchanged and loans in which money itself is created.
The school (the buyer) is getting a loan from, horrors, a bank. A fairly large one even. That bank engages in fractional reserve banking, and is connected to...wait for it...the Federal Reserve system.
So I'm kind of thinking that there aren't baskets of smoked clams, or racks of repurposed graphics GPUs senselessly wasting electricity, backing the funds.
The school (the buyer) is getting a loan from, horrors, a bank. A fairly large one even. That bank engages in fractional reserve banking, and is connected to...wait for it...the Federal Reserve system.
Incidentally, I'm as libertarian, free market as they come. It'd be nice to have one...a free market that is.
So I'm kind of thinking that there aren't baskets of smoked clams, or racks of repurposed graphics GPUs senselessly wasting electricity, backing the funds.
Right, there's only one thing backing them...wait for it...belief
See how long THAT holds up as a store of value.
https://www.youtube.com/watch?v=afWqKcqntfs
Right, there's only one thing backing them...wait for it...belief
I have this bill in my wallet...
https://lh5.googleusercontent.com/-i2HR1NAq8-U/UEfIRsJTWbI/AAAAAAAAGNE/-9oHBmULamk/s720/Awesomized.jpg
I have living relatives who went through this:
http://blogs.telegraph.co.uk/finance/files/2012/04/Weimar-republic.jpg
And yet I'm accepting payment from the school in US dollars, not bitcoin... Dollars which I will likely put into a bank briefly, before reinvesting in Something Else. Horror.
I have this bill in my wallet...
https://lh5.googleusercontent.com/-i2HR1NAq8-U/UEfIRsJTWbI/AAAAAAAAGNE/-9oHBmULamk/s720/Awesomized.jpg
I have living relatives who went through this:
http://blogs.telegraph.co.uk/finance/files/2012/04/Weimar-republic.jpg
And yet I'm accepting payment from the school in US dollars, not bitcoin...
Not yet. You'll get your chance.
Dollars which I will likely put into a bank briefly, before reinvesting in Something Else. Horror.
Good for you. It takes smart investing to stay ahead of a Ponzi scheme.
This is about the future of money, not old spending habits.
I don't understand how Bitcoin is superior to dollars. Neither has intristic value, both are only worth what someone will trade for them. The big difference is the dollar has the backing of the U.S. government at this time,that has a substantial military at its disposal.
Yossarian
12-30-14, 8:35pm
In the U.S., where vast wealth is made available to large corporations who have track records of stripping the earth of resources, there would no longer be loan creation from the top down, which is how it is made available now (e.g. from a Central bank to Citi to Shell), and no/less political cover via lobbyists who influence laws favoring such. This would create a level playing field for the competition: companies that offer sustainable energy and use renewable resources.
In Germany, and in other European countries, sustainable energy is flourishing. Oil companies here have a tight hold on policy and monopolize energy. In fact, they have so much control even before lower gas prices, shale and fracking companies were already losing money, i.e. for every dollar made on oil extraction, they spent 1.30, unsustainable financially and environmentally. But, they've been able to continue with financing through junk bonds, and heavy profiteering especially when oil was above $100 a barrel.
The reason renewable energy is big in Germany is because they have an overly generous government subsidy, the feed in tarriff system, that promotes it. And you picked an odd example-- the German economy is very reliant on financing from big banks.
I don't understand how Bitcoin is superior to dollars. Neither has intristic value, both are only worth what someone will trade for them. The big difference is the dollar has the backing of the U.S. government at this time,that has a substantial military at its disposal.
It's superiority is in its potential, velocity, open ledger and advanced security.
Presently, the military can attack countries that openly stop using the dollar. It is ineffective, however, for stopping individuals and companies from using Bitcoin, assuming the companies have state of the art security.
Silk Road, an underground website that was known for selling and buying anything, was shut down by government authorities and in just a few months, Silk Road 2.0 was launched. Then, that was shut down and 3.0 was up in a day...or two?
But that's not the end of it. Open Bazaar will make any interference impossible because it is an open source market place, which, being de-centralized makes it impossible to shut down.
So, the military won't play much of a role, if any, in enforcing the dollar or stopping Bitcoin.
Yossarian
12-30-14, 8:48pm
Presently, the military can attack countries that openly stop using the dollar.
Say what?
Say what?
My point is that they have the capacity to effect entities like countries and governments, not individuals.
If we had a stable amount of currency it probably wouldn't matter. As the economy grew the value of the currency would rise over time. Savers would be rewarded for saving, or if they wanted to take a risk to receive higher returns beyond the increasing value of the currency they could loan it to someone at interest. Banks that wanted deposits in order to be able to make loans would have to show themselves to be reasonably skilled at underwriting the risk of loans. Only viable projects would be able to receive funding. People wanting to borrow for riskier projects, like fracking enterprises that succeed or fail based on the whims of oil prices, would have to pay higher rates of interest. Instead we're in a situation currently where frackers were able to borrow money at only slightly higher rates than treasuries pay which, if oil prices remain low, is going to prove to have been foolishness that was encouraged by poor federal reserve policy. The soviet union proved that central planning is not an especially effective way of running an economy. I'll never understand why anyone thinks that a bunch of people at the federal reserve can do any better.
And how is Bitcoin and other digital currency's stable? What is backing them? I'll take a wait and see approach at this time and keep my dollars.
ApatheticNoMore
12-30-14, 10:32pm
And what's to guarantee some other digital currency doesn't take the market from bitcoin?
I think I'll stay out of that market as well, though if I was to get in it wouldn't be 5% of my income (yikes) maybe more like 1%, 2% at max - because that's the most I'd consider "play money" as far as investment goes. Because I don't entirely know what to make of it but it seems a lot of smart people have raised their doubts about bitcoin.
Bitcoin seems based on a Ponzi scheme to me too, where everything depends on getting in first, hardly the most ethical monetary scheme in my view (but more or less ethical than the dollar? gah, I don't know! :doh: I'm not a fan of the empire either).
And how is Bitcoin and other digital currency's stable? What is backing them? I'll take a wait and see approach at this time and keep my dollars.
The context of stable I meant is simply that the quantity can't be expanded endlessly. Once 23 million, or whatever the number is, have been mined, that's it. After that, assuming that adoption of it for usage continues to grow, the value of each coin will grow in value due to their relative scarcity, as compared to the ever declining value of dollars due to their ever growing quantity.
And what's to guarantee some other digital currency doesn't take the market from bitcoin?
I think I'll stay out of that market as well, though if I was to get in it wouldn't be 5% of my income (yikes) maybe more like 1%, 2% at max - because that's the most I'd consider "play money" as far as investment goes. Because I don't entirely know what to make of it but it seems a lot of smart people have raised their doubts about bitcoin.
Bitcoin seems based on a Ponzi scheme to me too, where everything depends on getting in first, hardly the most ethical monetary scheme in my view (but more or less ethical than the dollar? gah, I don't know! :doh: I'm not a fan of the empire either).
It's certainly possible that some other digital currency might become more popular, or equally likely, that several digital currencies could coexist at the same time at a floating exchange rate no different from the way national currencies current float, except without central banks trying to constantly devalue them in an attempt to make exports more desirable even though it also makes saver residents poorer at the same time.
Over time the value of bitcoin, assuming that it becomes ever more widely adopted, will continue to go up because the same amount will be used to purchase more and more goods. Getting in early isn't really a necessity unless one's goal is only to get rich by speculating on them.
The reason renewable energy is big in Germany is because they have an overly generous government subsidy, the feed in tarriff system, that promotes it. And you picked an odd example-- the German economy is very reliant on financing from big banks.
Yup, I withdraw it.
It's also about their strong manufacturing base...to give any example in what was basically a hypothetical was a mistake on my part because there are just a handful of countries that do not have central bank systems and there is myriad of factors involved.
I still say that the system makes all kinds of difficulties larger, whether for the planet or the people. We already know what we have hasn't worked, to say the least. The worst that could happen with Bitcoin is no worse than what we're facing globally now and the upside potential is so much higher.
And what's to guarantee some other digital currency doesn't take the market from bitcoin?
Then good. Let the masses decide. I much more interested in the idea of the block chain and decentralization. It doesn't necessarily have to be one currency either. On average, one new cryptocurrency is launched everyday. Most will fail or not gain widespread adoption but some will and they have very interesting features.
I think I'll stay out of that market as well, though if I was to get in it wouldn't be 5% of my income (yikes) maybe more like 1%, 2% at max - because that's the most I'd consider "play money" as far as investment goes. Because I don't entirely know what to make of it but it seems a lot of smart people have raised their doubts about bitcoin.
I believe I said (or at least meant) disposable income.
I've waited to hear, and looked around for, a solid reason against it, but I haven't found one that holds up to scrutiny. The smart people that I hear against it are either don't understand it and/or are threatened by it.
Bitcoin seems based on a Ponzi scheme to me too, where everything depends on getting in first, hardly the most ethical monetary scheme in my view (but more or less ethical than the dollar? gah, I don't know! :doh: I'm not a fan of the empire either).
If you invested money into the internet when the media was saying it was going to be a den of thieves, prostitutes, terrorists and child pornographers et al, and nobody else would touch it, then I'd say you ought to be rewarded for your prescience. Early adopters made money, BUT, focusing on its price totally misses the boat AND focusing on just the currency still misses the greatness of the innovation.
I recommend to everyone to just take a deep breath and with an open mind search more videos with Andreas Antonopolous, especially the earlier ones. He understands it deeply and communicates it to the layman very effectively.
If you dig into this a bit you'll see that almost everyone who first came across it dismissed it, including Andreas A. If you listen to mainstream media, you will not understand it. You will hear nonsense, distractions or half truths.
This thing has crashed at least a couple times and keeps coming back. Since when do Ponzi schemes do that?
ToomuchStuff
1-3-15, 1:39pm
It's superiority is in its potential, velocity, open ledger and advanced security.
Presently, the military can attack countries that openly stop using the dollar. It is ineffective, however, for stopping individuals and companies from using Bitcoin, assuming the companies have state of the art security.
Silk Road, an underground website that was known for selling and buying anything, was shut down by government authorities and in just a few months, Silk Road 2.0 was launched. Then, that was shut down and 3.0 was up in a day...or two?
But that's not the end of it. Open Bazaar will make any interference impossible because it is an open source market place, which, being de-centralized makes it impossible to shut down.
So, the military won't play much of a role, if any, in enforcing the dollar or stopping Bitcoin.
Bitcoin's traceability is questionable at best (anything electronic can be manipulated). Mt Gox ring a bell? (still haven't recovered peoples money and the place is out of business, so hard to go after)
Also anything webbased is subject to needing access (which can be hacked or traffic shut down as Korea was recently). That isn't to say there isn't other tech out there, to mirror bits (think of Echelon and such), physical seizure, lack of regulation etc. The goverment seized all the Silk Road bitcoins (we discussed that before) and can seize any property (property is NOT innocent until proven guilty), let alone they haven't decided on how they want to deal with it from a tax perspective.
And it has the same problem as ANYTHING that one wants to use as currency, both parties need to accept and believe in it.
Bitcoin's traceability is questionable at best (anything electronic can be manipulated).
"Traceability is questionable". ???
Mt Gox ring a bell? (still haven't recovered peoples money and the place is out of business, so hard to go after)
How is that different than cash? And other currencies?
Have credit card companies fixed fraud and identity theft in that antiquated system?
Likening Mt Gox to Bitcoin is like likening a bank with shoddy security to the dollar and shows a profound misunderstanding of what Bitcoin is.
Also anything webbased is subject to needing access (which can be hacked or traffic shut down as Korea was recently).
Websites can be hacked, and will be hacked, the de-centralized network that Bitcoin uses has had many hacking attempts, to which none has prevailed and it has only served to make the network more resilient against attack.
One tiny communist country 'shutting down traffic' TEMPORARILY is a mere hiccup as it will be in the future. These shut downs can be easily worked around and you would know that if you watched the video.
That isn't to say there isn't other tech out there, to mirror bits (think of Echelon and such), physical seizure, lack of regulation etc. The goverment seized all the Silk Road bitcoins and can seize any property let alone they haven't decided on how they want to deal with it from a tax perspective.
If you don't have the keys, you don't get the Bitcoin. If people haven't been careful with the keys, which is to be expected with a new technology, they will learn digital security the hard way.
Governmental entities are not able to seize Bitcoin which is properly made secure. They can seize bodies which can be manipulated to give up keys, but governments that do this regularly, as a matter of policy, will expose their own tyranny, usage will become more stealth/underground and the larger Bitcoin commerce will move elsewhere in the world to develop and thrive.
And it has the same problem as ANYTHING that one wants to use as currency, both parties need to accept and believe in it.
That is not a problem to the millions exchanging it now all over the world.
Your statement demonstrates what I've been saying: anything has value and utility as a currency when there is agreement to use and hold it as such. That "problem" is quietly solving itself everyday as startups are launched, adoption spreads and usage grows.
California just passed a law making Bitcoin legal tender...BTW.
http://www.businessinsider.com/bitcoin-is-getting-smoked-to-start-the-new-year-2015-1
"Bitcoin is under $300 for the first time since November of 2013. It's down ~16% to start 2015."
I tell you what---let you kids in on a little secret, just because you're my friends---I got my money tied up in Martian Real Estate. I always figure---Buy on the edge of town, and wait. It'll go up in Value.
I tell you what---let you kids in on a little secret, just because you're my friends---I got my money tied up in Martian Real Estate. I always figure---Buy on the edge of town, and wait. It'll go up in Value.
Im developing a new fiat currency myself, dmc bucks, I'll trade some for a few lots.
http://www.businessinsider.com/bitcoin-is-getting-smoked-to-start-the-new-year-2015-1
"Bitcoin is under $300 for the first time since November of 2013. It's down ~16% to start 2015."
I'm so happy, I can get in on this in a bigger position than before. This is tantamount to the arrow being pulled back on the bow.
Yes, I saw someone trying to get readers call it a "crash". The price has "crashed" about three or four times. Bubbles crash and don't come back. Bitcoin, as you'll see, will continue to gain use/adoption.
Or maybe you won't see because you're looking at price volatility (not usage stability which is all a currency really needs) the way anxious investors watch the daily stock market gyrations.
I'm so happy, I can get in on this in a bigger position than before. This is tantamount to the arrow being pulled back on the bow.
Yes, I saw someone trying to get readers call it a "crash". The price has "crashed" about three or four times. Bubbles crash and don't come back. Bitcoin, as you'll see, will continue to gain use/adoption.
Or maybe you won't see because you're looking at price volatility (not usage stability which is all a currency really needs) the way anxious investors watch the daily stock market gyrations.
Way to risky for me, but good luck.
I'm so happy, I can get in on this in a bigger position than before. This is tantamount to the arrow being pulled back on the bow.
Yes, I saw someone trying to get readers call it a "crash". The price has "crashed" about three or four times. Bubbles crash and don't come back. Bitcoin, as you'll see, will continue to gain use/adoption.
Or maybe you won't see because you're looking at price volatility (not usage stability which is all a currency really needs) the way anxious investors watch the daily stock market gyrations.
Now that's it's down under $200 you can buy even more.
How much are you buying, or are you waiting to see of it continues to drop?
see of it continues to drop?
It's not dropping, it's just gyrating.
How much are you buying, or are you waiting to see of it continues to drop?
Once again, if you think the current price is what is significant you will remain oblivious to the obvious technological genius behind the currency.
It has always been the small upstart that has overturned the apple carts for established monopolies.
https://www.youtube.com/watch?v=Wq8yOMl8IUs
Yes, gyrations, it's already back over $200 :moon:
Once again, if you think the current price is what is significant you will remain oblivious to the obvious technological genius behind the currency.
I've belonged to an investment discussion group for about 20 years now. One of our longstanding rules is that we post our trades. Eliminates much of the puffery, and weeds out the fantasy-football types.
Is there a dollar price for bitcoin below which "mining" becomes a losing proposition?
Once again, if you think the current price is what is significant you will remain oblivious to the obvious technological genius behind the currency.
It has always been the small upstart that has overturned the apple carts for established monopolies.
https://www.youtube.com/watch?v=Wq8yOMl8IUs
Yes, gyrations, it's already back over $200 :moon:
Since I own none the price does not effect me. I assume you are in for less than $200, if so good for you. As I said it's too risky of an investment for me. I'll stick with dollars, stocks, bonds, and hard assets for now. If I miss a big run up, oh well, I've missed a few in the past. I've also had some big losses in the past also.
I see golds over $1200 now, Someone's still buyin that.
Is there a dollar price for bitcoin below which "mining" becomes a losing proposition?
i don't get the "mining". Is this where you get Bitcoin out of thin air? I just don't understand it, how can something have value with nothing backing it. Why don't others just make up there own currency?
i don't get the "mining". Is this where you get Bitcoin out of thin air? I just don't understand it, how can something have value with nothing backing it. Why don't others just make up there own currency?
Marketwatch discusses it here: http://www.marketwatch.com/story/bitcoin-price-plunges-prompting-concerns-about-mining-activity-2015-01-14-121034915
I don't know that you can't just make up your own currency. Pre-Civil War, there were any number of currencies backed by banks, local communities, stores, etc. The real limiting factor was how generally accepted it was and how credible the issuer was.
i don't get the "mining". Is this where you get Bitcoin out of thin air?
The Federal Reserve Note, actually not a dollar, is backed by nothing but acceptance/usage (and possibly military threat). It too is created out of thin air.
I just don't understand it, how can something have value with nothing backing it.
The dollar does not have innovative technology as significant as the internet behind it, Bitcoin does. If you think there's gold backing the dollar, you're mistaken.
Why don't others just make up there own currency?
There is a new cryptocurrency being created, on average, once a day. Local currencies are also being used and are thriving. In my backyard, there is a local currency called BershireBucks (I think that's what they call it) and it is thriving AND beind accepted by BANKS!
All the latest pronouncements that Bitcoin is dead are quashed here:
https://www.cryptocoinsnews.com/bitcoin-dead-dumb/
It's getting old, these uninformed/misinformed arguments which never hold water.
ToomuchStuff
1-15-15, 6:40pm
Just now seeing this (been working too much, at least another month to go)
"Traceability is questionable". ???
How is that different than cash? And other currencies?
Have credit card companies fixed fraud and identity theft in that antiquated system?
It isn't and that is the point.
Likening Mt Gox to Bitcoin is like likening a bank with shoddy security to the dollar and shows a profound misunderstanding of what Bitcoin is.
I don't think so, because it has a lot of the same issues. That stolen loot, wasn't able to be traced anymore then bills someone buries in the ground somewhere.
Websites can be hacked, and will be hacked, the de-centralized network that Bitcoin uses has had many hacking attempts, to which none has prevailed and it has only served to make the network more resilient against attack.
One tiny communist country 'shutting down traffic' TEMPORARILY is a mere hiccup as it will be in the future. These shut downs can be easily worked around and you would know that if you watched the video.
More connections, means more durable, and on the flip side means more entry points of attack.
If you don't have the keys, you don't get the Bitcoin. If people haven't been careful with the keys, which is to be expected with a new technology, they will learn digital security the hard way.
Keys can be copied. (Eschelon did 1 to 1 copying of the digital data, now decrypting it is harder, but human intelligence plays a part, as well as advancing tech) Computers now, people choose conveinence over security.
Governmental entities are not able to seize Bitcoin which is properly made secure. They can seize bodies which can be manipulated to give up keys, but governments that do this regularly, as a matter of policy, will expose their own tyranny, usage will become more stealth/underground and the larger Bitcoin commerce will move elsewhere in the world to develop and thrive.
I can think of other scenerio's.
That is not a problem to the millions exchanging it now all over the world.
And million's more don't.
Your statement demonstrates what I've been saying: anything has value and utility as a currency when there is agreement to use and hold it as such. That "problem" is quietly solving itself everyday as startups are launched, adoption spreads and usage grows.
California just passed a law making Bitcoin legal tender...BTW.
Just because something is legal tender, doesn't mean one has to accept it. I've dealt with businesses that won't do cash (medical places/copays, COD drivers, internet retailers), and that is perfectly legal.
Marketwatch discusses it here: http://www.marketwatch.com/story/bitcoin-price-plunges-prompting-concerns-about-mining-activity-2015-01-14-121034915
I don't know that you can't just make up your own currency. Pre-Civil War, there were any number of currencies backed by banks, local communities, stores, etc. The real limiting factor was how generally accepted it was and how credible the issuer was.
I've never understood "investing" in currency. It wasn't just pre civil war, look at Confederate money, or German's currency before WWII (there depression, where money was used in wheelbarrows). Currency is a means to an end, a tool. Investing in it, seems like buying more of the same type of tool. Your still limited by other factors (number of hands, time, etc).
dmc "how can something have value with nothing backing it"
Trust is what backs our currency. Not gold or silver, etc. Trust is an intangeable "asset". (can vanish)
If you think there's gold backing the dollar, you're mistaken.
Why does that matter? The only relevance to the gold standard that I can see is the check on expansion of the money supply. Since gold has limited intrinsic value you are really just substituting one arbitrary medium for another. Maybe someone should establish a currency exchangeable for something useful (water, chickens, sushi, vodka, orgasms or whatever) so that we there is intrinsic value in the currency.
The dollar is still backed on the faith to the US government, who still has a sizable military to help back it. I don't see it going away anytime soon. And if it does there are going to many more things to worry about. So far everyone that I have dealt with take dollars in one form or another. Now it's getting more the norm to transfer numbers from one account to another, but it's still in dollars.
Arnt we even pricing Bitcoin in dollars? And how do you purchase them if not with dollars.
The dollar is still backed on the faith to the US government, who still has a sizable military to help back it. I don't see it going away anytime soon.
The criticism, as I understand it, that's at issue here is that Bitcoin can't be money, or is somehow illegitimate, because it is not backed by anything. If this is referring to substance redeemable assets, Bitcoin can: cryptobullion, because this is the flexibility of a decentralized open source ledger. The Federal Reserve Note, strike one.
If there is no substance, the issuing entity of fiat must demonstrate reliable and trustworthy stewardship. A fiat currency can work if it is tightly controlled without any corrupting influences. Strike two for the FRN.
When (not if) the U.S. "dollar" crashes as result of excessive money printing via Quantitative Easing and/or the decoupling of oil from the dollar and dumping by other nations (which has started already), with what currency is the military to be paid in? Strike three.
Besides, a military can back dollar hegemony only against single sovereign states. Its use is very limited as countries form alliances favoring other currencies and it's useless against a cryptocurrency possibly displacing the dollar's reserve status.
Bitcoin may be the best alternative (though not the only) for international trade because many other fiat currencies will go down with, or before the dollar.
And if it does there are going to many more things to worry about. So far everyone that I have dealt with take dollars in one form or another. Now it's getting more the norm to transfer numbers from one account to another, but it's still in dollars.
Arnt we even pricing Bitcoin in dollars? And how do you purchase them if not with dollars.
Bitcoin is priced in most currencies, for now. They can be bought with many currencies, earned or mined.
Why does that matter?
The question was, "how can something have value with nothing backing it?" My answer was in reference to substance redeemable currency. That the FRN has no tangible value backing it, which is what is always touted as a valid criticism of Bitcoin.
Actually, anything can have value if two or more agree it does.
The only relevance to the gold standard that I can see is the check on expansion of the money supply.
Gold provides no such check. Trustworthy people can, as long as they do but history has shown, they eventually don't. Unless, there is a system in which there is an open accounting for all to see: Bitcoin. This is how the block chain technology could create gold backed currencies that are tamper proof.
Since gold has limited intrinsic value you are really just substituting one arbitrary medium for another.
As I said many times on this thread, if you think Bitcoin the currency, is the only innovation, you're not paying attention. Bitcoin the currency is to the block chain as email was to the internet, just the beginning.
Intrinsic value is a myth. If gold was as plentiful as granite, it would be taken for granted>8) Seriously though, where's the intrinsic value then? What if people in the digital age didn't want it anymore because it was too cumbersome, too much difficulty distinguishing
authentic purity, too difficult to divide etc. etc., where's the intrinsic value then?
Maybe someone should establish a currency exchangeable for something useful (water, chickens, sushi, vodka, orgasms:0!:laff:
Hahaha, I think that is the oldest form of currency, right?
Me:
Likening Mt Gox to Bitcoin is like likening a bank with shoddy security to the dollar and shows a profound misunderstanding of what Bitcoin is.
Toomuchstuff:
I don't think so, because it has a lot of the same issues. That stolen loot, wasn't able to be traced anymore then bills someone buries in the ground somewhere.
Me:
The same issues, yes. Those issues are PEOPLE. People steal money, people are not careful with their money.
How does one take people out of the equation of currency...ever?
The difference with all traditional money and Bitcoin is that if I memorize my private key, no one can steal it from me unless they drug me or torture me and they would have to assume or know, I had memorized a private key.
All the latest pronouncements that Bitcoin is dead are quashed here:
https://www.cryptocoinsnews.com/bitcoin-dead-dumb/
It's getting old, these uninformed/misinformed arguments which never hold water.
How is a lot of puerile name-calling an argument?
How is a lot of puerile name-calling an argument?
Ahh, the "vultures and starving dogs" thing. Yup, it is puerile name calling. I certainly apologize if anyone took that as me calling them that. I posted that because it addresses many of the nonsensical positions routinely taken about Bitcoin.
I will say however, that I understand the exasperation that prompted them to name call because those in the media, et al, routinely disseminate opinions based on what appears to be either negligence in due diligence or worse.
This is an example of such, past predictions of the demise of Bitcoin and there are a lot them:
http://bitcoinobituaries.com/
I've belonged to an investment discussion group for about 20 years now. One of our longstanding rules is that we post our trades. Eliminates much of the puffery, and weeds out the fantasy-football types.
This is not an investment discussion group, not this thread anyway.
The purpose of this thread is not to advocate investing in Bitcoin the currency or even a Bitcoin company like Bitpay, for example. Although when I was asked, I respond as I already have: one to five percent of discretionary income.
My purpose was to offset the false information that is routinely disseminated by those who are invested in the status quo and to share a new vision of commerce that is twenty first century, old paradigm shattering, disruptive of legacy banking and financial institutions, empowering to the poor, egalitarian (a form of non-violent constructive program).
So bae, I guess I'd like to hear your explanation as to why, in a period (a year) of such steep decline in price, the investment rate in the technology of Bitcoin continues to rise dramatically? Are these entrepreneurs, who are investing to the tune of hundreds of millions of dollars, all fantasy-football types? That would seem to suggest a level of puffery that would be high, even for the most dedicated naysayer.
If I agreed to send you a dollar's worth of Bitcoin would you learn how to receive it?
This is not an investment discussion group, not this thread anyway.
The purpose of this thread is not to advocate investing in Bitcoin the currency or even a Bitcoin company like Bitpay, for example. Although when I was asked, I respond as I already have: one to five percent of discretionary income.
No, you went quite a bit further. You encouraged investment in Bitcoin, with a 3-year horizon:
If one has money they know they won't need for at least three years, I'd invest one to five percent of my disposable income in it. Why, because it has become increasingly stable and the long term outlook is favorable for growth.
So bae, I guess I'd like to hear your explanation as to why, in a period (a year) of such steep decline in price, the investment rate in the technology of Bitcoin continues to rise dramatically? Are these entrepreneurs, who are investing to the tune of hundreds of millions of dollars, all fantasy-football types? That would seem to suggest a level of puffery that would be high, even for the most dedicated naysayer.
I am not the one making the bold claims about the future of bitcoin and the block chain technology - the burden is on you. I have however asked *you* what investments you are making in this area, and how, and you dodge and weave. That speaks volumes.
http://1.bp.blogspot.com/_iAHxhtsyezI/SY3SISfwelI/AAAAAAAAARU/7xz2nPVASRo/s400/090209_cartoon_g_a13848_p465.gif
If I agreed to send you a dollar's worth of Bitcoin would you learn how to receive it?
Nope. Say Bitcoin soars 20x over the next 3 years. I'd make $20 pre-tax profit, for the cost of 5-10 minutes to set up a wallet, and another 5 minutes to think of some way of remembering the keys in a useful fashion. Not really worth the time, I'd rather spend it chopping firewood or something useful.
No, you went quite a bit further. You encouraged investment in Bitcoin, with a 3-year horizon
I said at least a three year time horizon.
Suggesting a time horizon is quite a bit further?
I also said:
Yes, dollar cost averaging in over a five year time horizon would yield comparable returns to that of other similar speculative ventures. This is why it would be only part of a diversified portfolio.
I am not the one making the bold claims about the future of bitcoin and the block chain technology - the burden is on you./
Interpretation: "I can't explain it Xmac, because all I've got is sarcasm, diversionary tactics (like posting about Bitcoin price) and avoidance. Talking about the substance and merits of the videos you posted are too much work and might mean I'd have to open my mind".
I have however asked *you* what investments you are making in this area, and how, and you dodge and weave. That speaks volumes.
Yes, volumes. You're not interested in discussing what's relevant.
I've followed my own advice. Beyond that, it's nobody's business as to the particulars. As I said this is not an investment club. If you'd like to lay out your investment details on a public forum, be my guest.
Nope. Say Bitcoin soars 20x over the next 3 years. I'd make $20 pre-tax profit, for the cost of 5-10 minutes to set up a wallet, and another 5 minutes to think of some way of remembering the keys in a useful fashion. Not really worth the time, I'd rather spend it chopping firewood or something useful.
1. One doesn't have to memorize one's key (not necessarily keyS) without any added security risk.
2. No? To 20x over the next 3 years? I'll take that as recognition of the earnings potential and your level of investment savvy.
https://medium.com/@octskyward/the-resolution-of-the-bitcoin-experiment-dabb30201f7#.5pyv27ycw
So, there's that....
Wow, $9000 tonight. That's a 42x bagger....and it didn't even take 3 years. !Splat!
What I have trouble understanding are the fundamentals that are pushing Bitcoin up. With a conventional investment security, you can evaluate things like market share, credit quality or new products in the pipeline. What can we point to that explains Bitcoin's recent rise, other than the exuberance of its enthusiasts? Are the major traditional currencies expected to collapse? Is it similar to a spike in gold prices? Is it truly a revolution in finance, or a sort of digital beanie baby? The whole phenomenon seem aromatic of a bubble to me.
Wow, $9000 tonight. That's a 42x bagger....and it didn't even take 3 years. !Splat!
Congrats,
still not for me .
Williamsmith
11-28-17, 12:57pm
Congrats,
still not for me .
Ill use my simple logic on it. I have never had anyone bragging on or selling me door to door anything that was worth a rats azz. That includes exchanging my hard earned real money that I can take to the pharmacy and get script, the grocery and get roast and the post office and get stamps......for a made up currency exchange that I can’t stuff in my pocket. Womp.....there it is.
Teacher Terry
11-28-17, 2:13pm
We have been mining for the past 4 years with my son. We use some of the profits to pay for the electricity. We are happy campers at this point. When it gets high we cash out 1 or 2 coins to lock in our profits. We have all taken many nice vacations with the profits. It is work for my son because he has to keep on top of things because stuff changes all the time but he enjoys doing it.
We have been mining for the past 4 years with my son. We use some of the profits to pay for the electricity. We are happy campers at this point. When it gets high we cash out 1 or 2 coins to lock in our profits. We have all taken many nice vacations with the profits. It is work for my son because he has to keep on top of things because stuff changes all the time but he enjoys doing it.
Terry, can you explain the procedure whereby you buy and then sell for a profit? I am unclear as to meaning of words you are using, like "mining."
Teacher Terry
11-28-17, 3:11pm
I am NOT the brains of this operation. My son is and has spent a ton of time doing all this. Basically mining is with computers that are solving complicated math problems using computers. But the electricity to run them are not cheap. My son and DH built all the computers and we put them in our basement because it is important not to overheat them. So you are earning crypto currency of some type. So we initially invested 2k for the computers and my son more. Eventually the computers become outdated and won't earn $ so he sells them. The newer miners you can buy. It is work on his part because the miners go down and you have to restart them, etc. He has also traded coins from one type to another to make a profit. You also have to keep track of what is occurring in the Bitcoin world to keep your profits safe before you cash out. Some friends of ours lost their profits when they did not move them into a secure wallet like my son kept telling them to do. Basically my son handles everything and gives us a report showing our earnings, etc. In the past 4 years my son and his wife have earned after expenses 50k and us about 24 K. Right now we each still have 11 coins each and Bitcoin hit 9459 a few days ago. You don't realize profit until you cash out and my husband and son are pretty sure it will go much higher. If it all went away tomorrow we are still ahead of the game. Obviously you need the understanding and skills to make this work which I don't have.
Williamsmith
11-28-17, 3:29pm
I am NOT the brains of this operation. My son is and has spent a ton of time doing all this. Basically mining is with computers that are solving complicated math problems using computers. But the electricity to run them are not cheap. My son and DH built all the computers and we put them in our basement because it is important not to overheat them. So you are earning crypto currency of some type. So we initially invested 2k for the computers and my son more. Eventually the computers become outdated and won't earn $ so he sells them. The newer miners you can buy. It is work on his part because the miners go down and you have to restart them, etc. He has also traded coins from one type to another to make a profit. You also have to keep track of what is occurring in the Bitcoin world to keep your profits safe before you cash out. Some friends of ours lost their profits when they did not move them into a secure wallet like my son kept telling them to do. Basically my son handles everything and gives us a report showing our earnings, etc. In the past 4 years my son and his wife have earned after expenses 50k and us about 24 K. Right now we each still have 11 coins each and Bitcoin hit 9459 a few days ago. You don't realize profit until you cash out and my husband and son are pretty sure it will go much higher. If it all went away tomorrow we are still ahead of the game. Obviously you need the understanding and skills to make this work which I don't have.
I have a lot to learn about this. My SIL has a massive computer and a server of his own in the basement and I suspect he is doing a bit of mining himself. But I have to ask, being the cynic that I so proudly proclaim....what does one do to “earn” profits. When someone loses their investment...does that mean people like you can profit? I have an understanding of fraud as it relates to the financial world.....bitcoin is lost on me though.
Teacher Terry
11-28-17, 3:45pm
Our friends were holding their bitcoin in a wallet that was secure at one time but something happened and it wasn't. My son had read about it and notified them repeatedly by email and called them. It just disappears because it is crypto currency and I don't think anyone else profited. You earn $ by solving the algorithms is my understanding. Originally 6 families went in on this venture and my son took a small percentage for managing everything. Everyone made $. Then 1 set of friends wanted their profits to manage themselves. My son knew what was coming because he stays on top of things and moved everyone's profits but they ignored his warnings. You can't be successful at this unless you understand it and keep up with what is happening all the time.
Our friends were holding their bitcoin in a wallet that was secure at one time but something happened and it wasn't. My son had read about it and notified them repeatedly by email and called them. It just disappears because it is crypto currency and I don't think anyone else profited. You earn $ by solving the algorithms is my understanding. Originally 6 families went in on this venture and my son took a small percentage for managing everything. Everyone made $. Then 1 set of friends wanted their profits to manage themselves. My son knew what was coming because he stays on top of things and moved everyone's profits but they ignored his warnings. You can't be successful at this unless you understand it and keep up with what is happening all the time.
Terry, I am more confused than before--are you saying you have computers running all the time, solving algorithms? Why does that result in gaining bitcoins? What is a wallet?
Teacher Terry
11-28-17, 4:09pm
Yes we have 9 miners (computers) running 24-7 for the past 4 years. You are being paid to solve the problems. The more difficult the problem you get more $. It also depends on how many people are mining. The less competition the more $. There are many places where you hold your coins until you sell. A wallet is one of those. Unless you cash it out you have to hold it somewhere virtual. My son has all the information with passwords etc in our safe so if he dies we can get the $ for his wife and us. If him and my DH both die at the same time my DIL and I are in trouble. Although my stepson being an IT guy would rescue us:))
Williamsmith
11-28-17, 4:22pm
Yes we have 9 miners (computers) running 24-7 for the past 4 years. You are being paid to solve the problems. The more difficult the problem you get more $. It also depends on how many people are mining. The less competition the more $. There are many places where you hold your coins until you sell. A wallet is one of those. Unless you cash it out you have to hold it somewhere virtual. My son has all the information with passwords etc in our safe so if he dies we can get the $ for his wife and us. If him and my DH both die at the same time my DIL and I are in trouble. Although my stepson being an IT guy would rescue us:))
Im going to make this a comment and not a question so you don’t feel obliged to answer and I don’t want to sound accusatory or a little too nebnosy......is that a word...anyway you know my intentions.
The obvious question is ....doesn’t this unsecured crypto currency give you a little of the heebeegeebees. And it would seem vague guidance from the IRS could be a bit of a
landmine. But hey, I know nothing....I’m still saving change in a Pooh Bear.
The underlying scheme of the current bitcoin technology is a bit silly if you think about how it scales. Fine in a lab or for initial adopters, a bit non-eco if it wants to be a generally-useful currency:
https://spectrum.ieee.org/energy/policy/the-ridiculous-amount-of-energy-it-takes-to-run-bitcoin
Okay, I looked at the spectrum article, and now I really am more confused and a little repelled--it reminds me of The Matrix. It seems very far removed from activities that help mankind, but I guess the same could be said of a lot of financial markets.
Terry, you must have a really really high electric bill. Or maybe not. I am not sure how much our computers draw, and we use them all day, too, but not 24/7.
Teacher Terry
11-28-17, 4:53pm
WS; here is the thing. We could have cashed out at almost 10k/coin and had a 100k guaranteed. WE are speculating that it will go higher. That is one reason we have been taking some of our profits so in case it all goes to crap we have some of the $ we made. When you cash it out $ appears in your banking account and yes you have to pay taxes on it. When we first started we were fine with losing our initial 2k that we invested.
Teacher Terry
11-28-17, 4:55pm
Yes our electric bill ranges between 300-500 /month for the miners. We pay for this with our profits. When the miners quit being profitable we sell them off. My son thinks there will come a time not that far off that it won't be profitable for small time miners like us to do it.
So, by “mining”, you are burning through power (which causes ecological consequences) to create virtual currency.
This is why I don’t worry about my own carbon contribution to our planet, frankly.
Im going to make this a comment and not a question so you don’t feel obliged to answer and I don’t want to sound accusatory or a little too nebnosy......is that a word...anyway you know my intentions.
The obvious question is ....doesn’t this unsecured crypto currency give you a little of the heebeegeebees. And it would seem vague guidance from the IRS could be a bit of a
landmine. But hey, I know nothing....I’m still saving change in a Pooh Bear.
Would that be Schedule SE reportable income, or some kind of capital gain?
Teacher Terry
11-28-17, 5:04pm
WE have someone do our taxes so I can't answer that question but both we and my son report it on our taxes. The last thing we want is to have a problem with the IRS.
WE have someone do our taxes so I can't answer that question but both we and my son report it on our taxes. The last thing we want is to have a problem with the IRS.
I'm sure they have a protocol for it.
Are you ever tempted to just get out completely with all that profit? That is a lot of money!
I teach online, and some days I feel like I'm in the matrix, too. . .
Teacher Terry
11-28-17, 5:54pm
Me yes but DH and son say no. That is precisely why we are taking the middle ground to cash out some as we go. I love teaching online. It has been the funnest thing I have ever done for work. Jan will be 5 years for me. They used to ask me every semester if I was going to teach the next one. I finally said you will have to pry it out of my cold dead hands. So they quit asking. Also this past summer was the first time I taught in summer so now I do all 3 semesters but each one is only 11 weeks long.
Me yes but DH and son say no. That is precisely why we are taking the middle ground to cash out some as we go. I love teaching online. It has been the funnest thing I have ever done for work. Jan will be 5 years for me. They used to ask me every semester if I was going to teach the next one. I finally said you will have to pry it out of my cold dead hands. So they quit asking. Also this past summer was the first time I taught in summer so now I do all 3 semesters but each one is only 11 weeks long.
Haha, that's the way I feel about my one college--the other one is a little less fun, but I value both jobs. I teach all year round, every day. I've been doing it since 2004.
Teacher Terry
11-28-17, 6:33pm
You work a lot more then me. I teach the same course each semester for one college. That is enough for me.
Williamsmith
11-28-17, 6:43pm
Why couldn’t I teach an online criminal justice class?
Do you have a masters degree in criminal justice, William? That is required in many places.
If you do, then you should definitely apply!
Williamsmith
11-28-17, 8:06pm
Do you have a masters degree in criminal justice, William? That is required in many places.
If you do, then you should definitely apply!
I have a B.S. in Environmental Resource Management and 25 years of work experience in law enforcement......So I’m qualified to noodle around on the guitar, sip bourbon by the fire and watch Vanna White turn letters for $4million a year. But thanks for your vote of confidence.
and watch Vanna White turn letters for $4million a year.
Personally I think they should have given Vanna a paycut when technology enabled her to simply touch the panels instead of having to actually turn them around.
I have a B.S. in Environmental Resource Management and 25 years of work experience in law enforcement......So I’m qualified to noodle around on the guitar, sip bourbon by the fire and watch Vanna White turn letters for $4million a year. But thanks for your vote of confidence.
Oh, I thought you were asking what was required in the places I teach--my bad, I thought you wanted to teach online.
I only know about the places I have taught-- if you wanted to teach, you would definitely ask around and see what was required.
It’d be hilarious if we manage to accelerate global warming by mining virtual currency....
https://www.theguardian.com/technology/2017/nov/27/bitcoin-mining-consumes-electricity-ireland
“each individual bitcoin transaction uses almost 300KWh of electricity” - so now I’m feeling a bit guilty about the $300 in Bitcoin I sent to some guy in Europe for payment for a hand-forged axe.
Williamsmith
11-29-17, 3:49am
“each individual bitcoin transaction uses almost 300KWh of electricity” - so now I’m feeling a bit guilty about the $300 in Bitcoin I sent to some guy in Europe for payment for a hand-forged axe.
Thank you for the link. I followed it to an explanation of the whole bitcoin phenomenon. Very helpful. I did not realize all this computing is simply a competition to see who/what computer can solve a random algorithm problem simply to claim the next release of crypto currency generated. And I didn’t realize that the currency is finite and someday will expire. A virtual digital gold.
It would seem to me to be a wonderful opportunity for cybercrime, or economic sanction avoidance or spy networking. Imagine all the coal that is being burned in electrical grid production in the world, just for a chance to claim the next ten minutes of bitcoin.
Im supposed to feel guilty about my contribution to global warming?
I see that the Chicago Merch and the CBOE are authorized to start bitcoin futures trading later this month.
Jack Bogle also issued a warning about Bitcoin within the last few days.
So it must be going more mainstream.
ToomuchStuff
12-2-17, 1:19pm
It would seem to me to be a wonderful opportunity for cybercrime, or economic sanction avoidance or spy networking. Imagine all the coal that is being burned in electrical grid production in the world, just for a chance to claim the next ten minutes of bitcoin.
I would love to know what the algorithms are, what they are for, who controls them, etc. Seems a good way to get people to work for government agencies unknowingly, or for hackers (things to break into computers or read encrypted data, cause crashes, overload power plants, etc). I know our government has some virtual assets it seized that were discussed here some time ago.
If only I could come up with a better search algorithm that I could dwarf Google, hmmm, maybe I should have bitcoin solve it.
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