Bitcoin, Cryptocurrency and Blockchain Discussion Thread

[ggr]

Mod: bickering ends here. --ggr

 

[daniel]

The "no intrinsic value" argument is confused and backwards. Every form of money has been something that had little to no "intrinsic value" beyond the things that make it money.

All currencies, and many collectibles, have value only because people agree to accept them as valuable. What distinguishes USEFUL currencies from crypto is stable, predictable value. Because crypto is unregulated, its value fluctuates wildly. There's no way to know if the coin you received for goods or services or labor will be worth half, or double, by the time you get to a store to spend it. This makes it useful ONLY for transactions where you don't care if it holds its value. These are transactions where you're willing to take the risk of price fluctuation in order to stay under the radar. A worker who earns a paycheck in a factory wants to know that when they go to the grocery store on the weekend their pay will still buy enough groceries to last the week. Crypto does not, and cannot provide that assurance. It's great for ransomeware operators, human traffickers, money launderers, etc. And it's an opportunity for speculation that can make you rich or can impoverish you.

 

[wdolson]

John Oliver covered cryptocurrencies on Sunday

 

[heltok]

All currencies, and many collectibles, have value only because people agree to accept them as valuable. What distinguishes USEFUL currencies from crypto is stable, predictable value. Because crypto is unregulated, its value fluctuates wildly. There's no way to know if the coin you received for goods or services or labor will be worth half, or double, by the time you get to a store to spend it. This makes it useful ONLY for transactions where you don't care if it holds its value. These are transactions where you're willing to take the risk of price fluctuation in order to stay under the radar. A worker who earns a paycheck in a factory wants to know that when they go to the grocery store on the weekend their pay will still buy enough groceries to last the week. Crypto does not, and cannot provide that assurance. It's great for ransomeware operators, human traffickers, money launderers, etc. And it's an opportunity for speculation that can make you rich or can impoverish you.

Plenty of fiat currencies are not very stable, yet people find them useful. Most fiat currency have a stable predicted loss of value, yet people hold them. Usefulness comes from the fact that some people they want to trade with will accept them and their scarcity.

And there are crypto currencies that are pegged to USD, to TSLA, to a portfolio of commodities, to outcomes of elections etc. But many people are okay with holding a currency that has fluctuated from $1/1337 to $28k in 14 years, some only hold it for that reason.

 

[CorneliusXX]

All currencies, and many collectibles, have value only because people agree to accept them as valuable. What distinguishes USEFUL currencies from crypto is stable, predictable value. Because crypto is unregulated, its value fluctuates wildly. There's no way to know if the coin you received for goods or services or labor will be worth half, or double, by the time you get to a store to spend it. This makes it useful ONLY for transactions where you don't care if it holds its value. These are transactions where you're willing to take the risk of price fluctuation in order to stay under the radar. A worker who earns a paycheck in a factory wants to know that when they go to the grocery store on the weekend their pay will still buy enough groceries to last the week. Crypto does not, and cannot provide that assurance. It's great for ransomeware operators, human traffickers, money launderers, etc. And it's an opportunity for speculation that can make you rich or can impoverish you.

Purchasing Power of the U.S. Dollar Over Time

 

[JRP3]

For the last 40 years or so the dollar looks very stable.

 

[CorneliusXX]

For the last 40 years or so the dollar looks very stable.

I guess you could generously say predictably lower. You would also expect that from the current reserve currency - bitcoin should act like a microcap at the moment because it is.

Here's a zoom in of the last 40ish years and we still see a massive decline in value. It would have doglegged down again over the last couple of years of high inflation.

 

[JRP3]

50+ years is not 40.

 

[ChooseFreedom]

For the last 40 years or so the dollar looks very stable.

First off, I haven't read this whole thread, so I'll probably be repeating some things others have said.
This is just my take, and I don't know everything. I'm learning more everyday, and new things are created constantly. This is a very exciting time to be alive! But I'm not sure our human brains are evolving fast enough to keep up with all the change and innovation that has occurred in the last 40 yrs. Or what will come in the next 40!


Every fiat currency in the history of humanity has always, every single time, gone to zero. No exceptions.
Humans will always fall into the trap of thinking they can make money better through manipulating it.
And every single time, they only make it worse. Until it collapses.
Looking back at the history of money, the best version was the Florian, used in Europe. The rulers of the time actually were smart enough to leave it alone, for a couple hundred years, and we got the Renaissance period because of it. Stable, sound money allows for upward growth to all.
The introduction of fractional reserve banking has been the downfall of the entire world's economy. A slow, 100 yr choking death. And it's all starting to come to a head. The creation of the Federal Reserve in 1914 was the beginning of the end. Not a government entity, never been audited (WTF!), and our government gave them the license to print money at will.
Then in 1971, when Nixon officially took us off the gold standard, true fiat was introduced, starting the great fall of our USD currency.
www.WTFhappenedin1971.com
That decision has doomed us, and the US dollar, to where we are today, and where we're headed, to zero, like every other fiat in history.

That is where Bitcoin (not crypto!) comes in. It fixes all of this!
(Bitcoin is the only cryptocurrency that is a true commodity, not just a speculative security. The SEC has said this)
I'm assuming most of the folks on here have already been down the Rabbit Hole and been Orange Pilled, so I won't waste time going into the whys.

But you have to pay attention to what's happening in the financial and government worlds right now!
The Fed can't stop inflation. The rest of the world is moving away from the USD as their reserve currency. Many governments are developing/already using their own CBDC's. Here in the US, some states are trying to ban BTC mining, while other are embracing it.
Just like every other topic in this country, the government is going to try and divide us. They've already started campaigns to slander Bitcoin, trying to convince us how bad it is. And it is bad, FOR THEM! It's great for us! But they don't want you to know that.
When the WEF comes out and says "You'll own nothing, and like it.", they're telling you exactly what they're trying to do. They want to own and control everything, and make us just pawns, slaves.
And CBDC's are their way of doing it. When they have full control of your money, they have control of you.

Bitcoin is freedom! And they don't want everyone to be free of their influence. The next big fight for our freedom will be in Congress, and it's up to us to put the right people in place to ensure CBDC's never see the light of day in this country. This is NOT a right vs left, blue vs red, Rep vs Dem issue. It's a rich vs poor, top vs bottom, elite vs everyone else kind of problem.
I for one look at countries like El Salvador and Central Rep of Africa, and I see the future that's coming.
They made the very difficult decision to turn down the enticing offers from the IMF, and chose a smarter, long-term better, choice of making Bitcoin legal tender. And they are starting to thrive because if it.
In the case of El Salvador, their crime is way down, their tourism is way up! They've recently passed legislation eliminating taxes on Bitcoin and related tech companies.
If it comes down to it, and the US releases a CBDC, I'm going to take a very hard look at relocation, and El Salvador would at the top of my list.

If anyone would like to discuss more off-site, I'm on the Orange Pill app: @lil-HODLR
To learn more about why Bitcoin: www.swanbitcoin.com/thepaleys
It's a great resource all in one place.
I also highly recommend these:
www.nakamotoinstitute.org
Book: The Bitcoin Standard
Podcasts: Coin Stories, Bitcoin Audible

Educate yourself! You may not agree with me on everything, but do your own research. Don't just listen to the talking heads on TV/Twitter. They're not you, and they're not out for your best interests. Only you are.

HODL on! And stack sats!

 

[CorneliusXX]

50+ years is not 40.

So it's been pretty stable except for when it wasn't. Even here stable is still losing over half its value.

 

[daniel]

Plenty of fiat currencies are not very stable, yet people find them useful. Most fiat currency have a stable predicted loss of value, yet people hold them. Usefulness comes from the fact that some people they want to trade with will accept them and their scarcity.

And there are crypto currencies that are pegged to USD, to TSLA, to a portfolio of commodities, to outcomes of elections etc. But many people are okay with holding a currency that has fluctuated from $1/1337 to $28k in 14 years, some only hold it for that reason.

When a currency is as unstable as cryptos are, it's a crisis for the country. A relatively low, steady level of inflation is relatively stable. We may not know what the rate of inflation will be next year, but we know that there will be no significant loss of buying power between payday and shopping day. That's what a well-managed hard currency provides, and what crypto cannot.

Cryptos pegged to the dollar fail because they are unable to maintain the peg. And a crypto pegged to TSLA would have lost MORE THAN HALF ITS VALUE in the last few months! TSLA is the definition of unstable.

Again, people hold assets for very different reasons than they USE currencies. A currency is intended to be a medium of exchange, and a medium of exchange must hold its value from day to day. Many people hold various assets as speculations, and that's why some people hold crypto.

Finally, to address inflation: An industrial economy requires that people invest their money, so that businesses will be able to borrow for capital investment. When inflation is negative, people don't invest. They don't need to because the value of their money is rising. A small, steady rate of positive inflation is needed as an incentive to invest, to keep the economy working. People don't invest crypto. They stick it in a wallet and sit on it hoping for the price to rise, or they put it in an exchange, where lack of regulation means they just have to trust the owner of the exchange not to rob them, as SBF did.

The US dollar is worth a fraction of what it was 50 years ago. And while pseudo-economists love to rant against inflation and tout the supposed stability of gold, this slow steady inflation is necessary so that people won't just stuff their cash in a mattress. Because a US dollar INVESTED in any conservative investment over that time would be worth far more, in inflation-adjusted dollars, than it was then. Crypto does not do this. It goes up or down with the vagaries of the market, but the one exchange that claimed to pay interest on crypto turned out to be a Ponzi scheme and collapsed.

 

[ChooseFreedom]

An industrial economy requires that people invest their money, so that businesses will be able to borrow for capital investment. When inflation is negative, people don't invest. They don't need to because the value of their money is rising. A small, steady rate of positive inflation is needed as an incentive to invest, to keep the economy working.

The US dollar is worth a fraction of what it was 50 years ago. And while pseudo-economists love to rant against inflation and tout the supposed stability of gold, this slow steady inflation is necessary so that people won't just stuff their cash in a mattress. Because a US dollar INVESTED in any conservative investment over that time would be worth far more, in inflation-adjusted dollars, than it was then.

Typical Keynesian mentality.
Thinking a currency can only be gov regulated, because they always do the right thing. Yeah, how's that working out for ya?
Free markets existed long before governments, and they worked just fine thank you.
You're brainwashed by the current system, and since you've probably benefitted from it your entire life.
Why would you want to change it? You're probably a banker, executive, or Wall St zombie.

You're missing the entire source of the problem because you're comfortable in the current system, and don't need to see outside of it. That system IS the problem. People like you think we live in a democracy, we don't. It's a republic with democratic aspects. (Bigger difference that most realize) People like you think we use a capitalism system. We don't. There is almost nothing about our economy that's "free market" capitalism anymore.
That's the problem. Government control. Those in control, or close to who are, are the only ones who benefit in this system. It's strictly a top-down system.

That's why Bitcoin scares them/you. It's a bottom-up system.
It can't be controlled (ask China).
It can't be threatened.
It can't be manipulated.
It just is.

Gets stronger every 10 minutes with each new block added to the chain. And yes, today, for now, it is still easier to use fiat in most places.
But the world has shown in the last 10 yrs that using Bitcoin is becoming more and more user friendly for everyday transactions (I see you El Salvador). And the long, slow, transition to a better, more sound money has begun. It will take time.
And that growth has reached the threatening stage. They powers that be can no longer ignore it's impact. It's becoming apparent to them that they can't stop Bitcoin with their usual tactics, so they're trying to figure out how to hold on to their power. Bitcoin turns their world upside-down.
You're scared. You should be.
Adapt or die.

 

[ChooseFreedom]

Probably because you know your $ could be stolen and you'd have no recourse- unlike real money in a real bank....and you're aware no method you could post for how you secure it would change that fact- and that fact is yet another way crypto stored any way is worse than actual real money in an actual real bank.

Your money in a bank is simply an IOU, nothing more.
You don't have a right to it whatsoever. They don't have to give it to you.
In fact, physically, you don't even have access to it over 12 hrs a day and not at all on Sunday or holidays.
And if you have any significant amount with them, if you went in a branch while they are open and asked for all of your money, there's a pretty good chance they wouldn't even have enough onsite.
This is the current system, and we've just accepted it, because there wasn't a real better option.

Now there is.
Bitcoin cannot be stolen by robbing me of my wallet.
It cannot be frozen by my bank.
It cannot be taken from me by the government, even if they put me in prison.

I can memorize my 12-24 word key phrase, and have access to my Bitcoin anywhere in the world. Even somewhere without internet access.

Can your precious fiat do that? I don't think so.

But this arguing about which is better is futile. It's not about what's good right now. It's about what is better for the future generations.
We cannot continue to be so short-sighted and just push all our problems onto our kids and their kids. It's time to do something that will actually make things better!
And fixing the money is the first step!
Nothing else can improve, long-term, until the money is fixed. And as much as you think it's not broken, billions of other humans around the world would disagree. Take off your USA blinders, and see the bigger picture.

 

[ChooseFreedom]

The supply of crypto is not regulated. It is fixed. The Great Depression was exacerbated to a huge degree by the world's being on the gold standard. The amount of gold is basically fixed. More is always being mined, but the amount is what it is. It cannot be adjusted when more or less is needed to fit economic conditions.

There is zero risk to bank deposits in the U.S. and other western nations. They are insured by the governments. The FDIC in the U.S. and similar agencies in other countries. SVB failed and the FDIC got all depositors their money back.


Nobody's deposits were at risk. The bank's stockholders lost, and I think the bank's bondholders as well. But not its depositors.

When a crypto exchange fails, the depositors lose everything.

Finally, when investors are looking for a safe place to put their money, they don't go to volatile, unsecured, fraud-riddled crypto. They go to Treasury bills and bonds. Conspiracy theorists who think the government is trying to create some sort of dystopia, or who believe the quasi-religious dogma that "government can't do anything right" go to crypto or to gold and silver. Ordinary investors go to Treasuries.

Nobody who knows anything at all about economics sees crypto as anything other than a high-risk speculation with the possibility of high rewards, or big losses.

1) "Crypto" is everything except Bitcoin, and yeah they are all speculative securities.
But BTC, according to the SEC, is the only one that is considered a commodity. Full stop. That's why cannot be included with all other crypto currencies. That distinction, by the government, makes all the difference.
Bitcoin is property.

2) Your take on gold is again short-sighted. Of the 6 traits of a sound money, to this point, gold had the most. But it's still not very good at fungibility or transporting. Bitcoin is just better at everything. And, for the sake of short-sighted supply, gold mining is intentionally held to a minimum annual growth by those companies. They could increase the gold supply exponentially if they chose to.
Also, there have already been talks about in the "near" future, sending a mining probe to the nearest asteroid belt in search of precious metals. If a huge meteor of precious metals is brought back, it destroys those markets instantly. All of a sudden, there's a flood of those metals, potentially including gold, into the market. So even gold as a future standard isn't guaranteed.

3) "zero risk to bank deposits" is just categorically false! Even the FDIC "insurance" has it's limits.
Will the government probably honor most of them if a large bank fails, maybe, but they don't have to. And if it's bad enough, they'll make choices as to which they will help, and which they won't.

4) Crypto exchanges are no different than stock exchanges. So yes, if you let your stock exchange hold your stocks, they're not really your stocks, and could be lost if that exchange goes under. The difference lies in that unlike stock exchanges, you can remove your money off the exchange and self-custody it, essentially becoming your own bank.
That scares people because it's new to them. They're afraid of it because they're used to the comfort, convenience, and supposed safety of their brick and mortar bank. But a little education, and they start to enjoy the freedom and relatively fee-free life (much lower at least) of Bitcoin.

5) The bond market is in the trash right now because the rest of the world is starting to realize they don't need to use the USD as the global currency. Our monetary hegemony is crumbling. And what will the gov do when they can't pay their debts? "Restructuring", aka: default, and crank up the money printer.

6) These aren't "conspiracies". The gov only has so many plays in their playbook, and they're running out of options. Tough decisions are being made, and those are all in favor of the elites keeping their money and power. None of them are in the everyman's best interest.


Bitcoin is the best version of money that has ever existed, if you're not a dictator, gov official, or financial elite.
It's more secure, easily moved, private, apolitical, inflation-proof. What's not to like?
Yeah, you have to learn a new way of transacting, storing, an protecting your property. So what!
It's worth it!

 

[ChooseFreedom]

"if you had your crypto stored at an exchange"

Same as if you had it in a cold wallet and someone found your private key.

An exchange is not a bank.

That's where education needs to improve. Just like a stock exchange isn't a bank.
Not your keys, not your coins. People need to understand exchanges are for buying and selling, not storing/saving.

Private keys can be memorized, but that may not be convenient for some. And backups are important, as is the security of those keys.
No different than the keys to your house. There just isn't a Pop-a-Lock for Bitcoin! haha

 

[ChooseFreedom]

Its value is totally dependent on the speculative fever based in the "bigger fool" theory.

No, that's fiat!
A massive confidence game that relies on everyone simply agreeing to use it, and hoping it works, because it's backed by nothing but the word of the gov. This is why every fiat in history has gone to zero value.

You act like USD is bulletproof, when every $100 you had in the bank last year is now worth $90, and you're okay with that.
That's insanity to me! Inflation is theft! I don't accept any amount of theft to my money.

I'll be over here stacking deflationary sats.
No one can print more Bitcoin.
No one can put a gun to my head and steal my Bitcoin.
No one can legislate how I use my Bitcoin.
I choose freedom over fiat slavery! One day, I will personally be fiat free. All bills, purchases, income, will be BTC. That's the goal. And when more people are doing that than using fiat, fiat will no longer be needed. And so many of the fiat related problems will go away.

 

[ChooseFreedom]

Is Ethereum a security?

Deaton Plans to Counter Suit As Regulators Allege Ethereum is Security After XRP

The NYAG alleges that ETH passes Howey's test, positing that it "is a speculative asset that relies on the efforts of third-party developers."

thecryptobasic.com

As soon as ETH changed from proof of work to proof of stake it became a security.

 

[ChooseFreedom]

I wish I had bought more ETH as it seems to be capitulating. Will be holding for a long long time. Is this a security or a commodity?
Why not a currency? Like the internet, iPhone, Google, Amazon, EVs, etc. digital assets are going to be ignored till they are not.

The SEC has already stated that since ETH changed to proof of stake, it is not a commodity. It is a security.
The only cryptocurrency that is a legit commodity, hence the only one worth owning, is Bitcoin.
Every other crypto is a speculative security, which is going to be highly regulated and restricted by the SEC.
They have already shown how aggressively they will pursue legal action against exchanges that are dealing with crypto securities.

 

[JRP3]

So it's been pretty stable except for when it wasn't. Even here stable is still losing over half its value.

I was just pointing out that the last 40 years it's been quite stable then you changed the parameters.

 

[daniel]

You act like USD is bulletproof, when every $100 you had in the bank last year is now worth $90, and you're okay with that.
That's insanity to me! Inflation is theft! I don't accept any amount of theft to my money.

I don't keep money in the bank, except for current expenses. My money is invested where it pays interest or dividends. It would be silly to keep more than current operating cash in the bank. Currency is not intended as a way to store wealth, though some people may use it that way. Currency is intended as a medium of exchange: You get paid for your work and you pay for rent and groceries. You keep savings in investments. Unless you're a gambler willing to take big risks for uncertain payoffs, or big losses.

Meanwhile, crypto pays nothing, it just goes up or down with the vagaries of the market.

Inflation of the currency doesn't matter to someone who invests their savings in anything productive. Because, again, currency is so that you can be paid for your labor in a way that lets you buy what you need. Barter is useless if you work in a factory that makes cars or tractors, because they're not going to pay you in cars or tractors, and you cannot buy groceries or pay the rent with cars or tractors. Currency allows you to exchange your labor for things you need.

But crypto cannot do that because it might lose 10% or 20% or 50% of its value between payday and shopping day or rent day. Nobody uses crypto for normal daily expenses. For that you use the national currency of your country even if you are the world's biggest HODLer of crypto. When you go to the grocery store or pay your rent, if you live in the U.S. you use dollars. Your crypto is merely a speculation that you hold because you think it will rise in value. And when you need money, if you don't have enough dollars, you exchange your crypto for dollars so you can actually buy stuff.

All these people who rail against "fiat" money and shout about how great crypto is, if they work for a living they're paid in fiat currency, and they buy their groceries and pay their rent in fiat currency. Fiat currency is what they live by. Crypto is just what they buy with their extra money, because they believe it will go up in value. It doesn't produce anything. it doesn't serve any purpose. It's just digital cash in a digital mattress, sitting there doing nothing until they're ready to sell it for fiat money that they can actually spend.

My savings are in stocks of companies that actually produce value by making things, and in bonds which are loans to companies that use the money to produce value by making things, and then paying me interest for the use of it. (Actually, mutual funds which hold those stocks and bonds, thus spreading out and diluting risks.) My money is being used to create value. Crypto in a digital wallet is producing NOTHING!