Bitcoin, Cryptocurrency and Blockchain Discussion Thread

[j6Lpi429@3j]

I’m comfortable with the fact that it’s mostly renewable now

The only people believing this are hardcore crypto bulls and websites trying to pump bitcoin. Every analysis done by an independent source has confirmed that bitcoin is mostly mined in china using cheap dirty coal power.
Why are people so blind to this?

 

[AudubonB]

Trovio just raised $6.25m for its tech that turns gold into a digital asset - Stockhead

If i correctly understand Trovio’s arguments, its appeal is that it makes appropriate use of blockchain - the fundamental guarantor of security - without the unjustifiable, non-value-creating expenditure of energy that, its proponents’ protestations notwithstanding, Bitcoin entails.

And, while I’ll not say I don’t like gold - I do carry 20,000 years or so of societal baggage - I maintain my argument and hope that a value-based SOURCE of wealth becomes, as it were, the coin of the Martian realm.

Using a Trovio-style blockchain setup with the former might be the answer I search.

 

[EinSV]

In my limited understanding using crypto for transactions makes no sense if you see it as an appreciating asset, (the 10,000 BTC pizza purchase being the most obvious example), so how could it be a viable currency until the value stabilizes?

Let's say your checking account has a $10,000 average balance. After 5 years, it still has a $10,000 average balance.

In an alternate universe, you put all your "cash" into crypto instead of a checking account and use your crypto account to pay bills and make purchases.

After 5 years, the crypto has increased >100X, like Bitcoin has over the past 5 years. You now have a very large multiple of $10,000, assuming you've made the exact same purchases.

Which do you prefer?

 

[bkp_duke]

Let's say your checking account has a $10,000 average balance. After 5 years, it still has a $10,000 average balance.

In an alternate universe, you put all your "cash" into crypto instead of a checking account and use your crypto account to pay bills and make purchases.

After 5 years, the crypto has increased >100X, like Bitcoin has over the past 5 years. You now have a very large multiple of $10,000, assuming you've made the exact same purchases.

Which do you prefer?

Cherry-picked argument. BTC has had titanic-level drops as well as increases. You are trying to mesh the asset and currency arguments into one, and that just doesn't work.

Practical example of why:
2020 Model Y - Selling for Bitcoin

This guy is trying to sell a Model Y in exchange for BTC. He's basically been having to adjust the price constantly.

 

[EinSV]

Cherry-picked argument. BTC has had titanic-level drops as well as increases. You are trying to mesh the asset and currency arguments into one, and that just doesn't work.

Practical example of why:
2020 Model Y - Selling for Bitcoin

This guy is trying to sell a Model Y in exchange for BTC. He's basically been having to adjust the price constantly.

This is a red herring.

@JRP3's post (copied below) assumed a person believed cryptocurrency was an appreciating asset, and suggested that it might not be a viable currency if someone believed that because they wouldn't spend it.

I pointed out that if you believe crypto is an appreciating asset, you would be better off putting your "cash" into it, and spending from that account rather than a checking account that earned zero interest.

Your post is about volatility, which is a separate issue.

In my limited understanding using crypto for transactions makes no sense if you see it as an appreciating asset, (the 10,000 BTC pizza purchase being the most obvious example), so how could it be a viable currency until the value stabilizes?

 

[Nocturnal]

The only people believing this are hardcore crypto bulls and websites trying to pump bitcoin. Every analysis done by an independent source has confirmed that bitcoin is mostly mined in china using cheap dirty coal power.
Why are people so blind to this?

I don't trust anyone on this. The same people who told me that Tesla was a fraud are also the ones most vocal against bitcoin. That doesn't mean they are wrong of course.

The way I see it is this. We are all Tesla bulls and believe solar power will become cheap and plentiful in the relatively near future right? Renewables are already cheaper to use than coal, and soon will pass natural gas. So if I believe in the green energy revolution, why would I worry about bitcoin's energy use long term? Even if it's not mostly renewable and is mostly dirty at present. It helps even more than renewables are very peaky and it's easy to devote excess power to mining.

 

[Matias]

Stablecoins are coins that are kept at a constant value through various automated means. Many are pegged to the US Dollar, and maintain their value of 1 coin = $1.

Some examples are:

USD Coin (USDC) - join venture by Circle and Coinbase
USD Tether (USDT) - created by Bitfinex
DAI Stablecoin (DAI)

All 3 of these coins are what's called "ERC20 tokens" and they run on the Ethereum blockchain. They are not Ethereum coins, they are their own currency.

If you own them in an Ethereum wallet, you can loan them out through what's called a "smart contract", and they will draw interest. Current interest rates (APR) for each of these is:

USD Coin - 10.09 %
USD Tether - 10.60 %
DAI Stablecoin - 11.33 %

I manage and loan these out through Ledger Live, the software included with the Ledger hardware wallets.

My personal preference is for USD Coin, because Coinbase is a US company, and has published a fully transparent 3rd-party audit that shows that all USD Coin in circulation is backed by actual US Dollars in a 1:1 ratio.

USD Tether makes me a bit nervous as Bitfinex has refused 3rd-party audits, and does not claim full fiat backing of USDT.

Smart contract loans can be closed by you at any time and you can have full control of the stablecoins back in your wallet.

Because the value of stablecoins never changes, many of the cryptocurrency exchanges operate trading pairs for other cryptocurrency where a stablecoin is the transacting currency. e.g. Coinbase Pro has a BTC-USDC trading pair, where you can buy and sell BitCoin using USDC as the currency.

[Disclaimer: I am not an accountant, tax professional, or expert on cryptocurrency, and this post is not to be taken as investment advice.]

Those interest rates are very high. One basic rule in investing is, that if someone shows you a risk free high gain investment, there’s something fishy.

With over 10% interest, there has to be some very big risk.

 

[AudubonB]

And I believe someone else will solve not just all the world's energy problems, but all the pollution problems and food-sourcing problems and the crowding-out of other flora and fauna problems, so I think I'll satisfy my natural urges and have sixteen children and 196 grandchildren, and all others should, too.

Waste is waste no matter how you parse it. "Green energy revolution" is not green: it's red. A red herring.

 

[ZeApelido]

This is a red herring.

@JRP3's post (copied below) assumed a person believed cryptocurrency was an appreciating asset, and suggested that it might not be a viable currency if someone believed that because they wouldn't spend it.

I pointed out that if you believe crypto is an appreciating asset, you would be better off putting your "cash" into it, and spending from that account rather than a checking account that earned zero interest.

Your post is about volatility, which is a separate issue.

JRP is starting what is obvious flaw of Bitcoin as a currency: people will spend less and invest less of their money than they would living in a currency with minor inflation.

This will cause signicant deflation, which is really bad.

 

[MXWing]

A far more efficient use of quantum computing in this realm would be to hack bitcoin wallets and take the funds. You laugh now about how preposterous that sounds, but when Quantum computers can be rented by the hour like normal servers are now, this will become a distinct possibility.

Having mined BTC for a long time, I can say this is the major weakness that everyone is ignoring. A major jump in technology could very easily leave the entire BTC system antiquated and highly vulnerable.

Bitcoin will fork far before this becomes a remote possibility.

Doesn’t matter if one is able to access all the BTC on an old chain that no one uses anymore.

 

[SomeJoe7777]

Those interest rates are very high. One basic rule in investing is, that if someone shows you a risk free high gain investment, there’s something fishy.

With over 10% interest, there has to be some very big risk.

I make no claim that anything is risk free, low risk, or any other characterization. There are different types of risks that are inherent with any investment. Cryptocurrency carries volatility risk, speculative risk, and risks associated with lack of insurance.

For example, deposits in a regular bank in the US are FDIC insured, i.e. the government guarantees you can withdraw your funds even if the bank becomes insolvent. Cyptocurrency exchanges do not have this protection, so that increases the risk of holding cash in these accounts. If the exchange goes under, you will likely lose your funds unless you hold the funds on the blockchain directly.

Cyptocurrentcy is highly volatile, especially right now. This carries a lot of downside risk, and various methods available in a standard stock exchange to mitigate this risk, such as covered call options or other hedge strategies are not available for cryptocurrency.

Cryptocurrency is highly speculative, and carries risks such as legal obstacles. Some governments are outlawing it completely, others are highly restricting it. There is inherent value risk in cryptocurrency in that in most cases, it's not backed by other currency.

Stablecoins mitigate some of these risks. In the case of USD coin, that mitigates the legal obstacle risk (as Coinbase is a fully licensed and legal entity in the US) and the inherent value risk (as USD Coin is backed by US dollars). Stablecoins themselves mitigate downside risk as they're designed to maintain exact value of 1 coin = $1.

My assertion is that lending stablecoins to draw interest carries lower risk than holding non-stable cryptocurrency directly. How that risk level compares to other more traditional investments is up for debate.

 

[MXWing]

You guys are making this all too complicated. It’s as simple as this:

Put the % of net assets that you can afford to lose in Bitcoin. Bitcoin. Not Ethereum, not alts, not stable coins but Bitcoin.

Continue to dollar cost average in with small amounts so you cannot complain about buying the tops.

Your downside is 100 percent loss of your risked amount. The upside is half a million or more per whole units of Bitcoin.

This strategy bakes in all the poo pop nonsense being spouted here by the bears.

I straight up told all my friends I don’t care if they lose 1-3% of their net worth buying Bitcoin. Missing out on 1-3% worth they can recover from. Missing out on 100X gains is a mental wound that would haunt them forever. They would be foolish to lose me as a friend over those amounts.

The smarter ones that listened when I told them it’s safer to buy BTC at 20k-25K today versus 18k, 3 years ago have already doubled up.

Because I know I will lose them as friends with 100% certainty if my coins are worth half a million each and they didn’t take my directives.

Another bit of friendly advice. I have not seen a single crypto expert post here on TMC. I’m not an expert but I possess sufficient competency to sort out the truly knowledge versus those just talking out of their ass.

Not an expert at crypto, not an expert at risk management. Competent at both however.

The bearish arguments spouted thus far show insufficient comprehension of blockchain.

 

[SomeJoe7777]

Not an expert at crypto, not an expert at risk management. Competent at both however.

I agree and I think this applies to many posters in this thread.

Indeed, with the technology as new as it is, how many "experts" in cryptocurrency actually exist? Not many.

 

[MXWing]

Max 21 million units. Current ~18 million units. 3 million units are currently worth $141 billion.

However, It seems Zeno's Dichotomy Paradox may be involved.

View attachment 636357

There might have been 18 million BTC mined but less is accessible. Many wallets of thousands, hundreds of thousands BTC are forever lost.

People nowadays are defending their private keys and crypto logins for 100 dollars worth of BTC more robustly than these old wallets with hundreds of millions.

There really shouldn’t be any more thumb drive idiots losing 1000 BTC anymore. Your private key would be etched into metal plates or stored with custodial accounts that insure this.

 

[Matias]

My assertion is that lending stablecoins to draw interest carries lower risk than holding non-stable cryptocurrency directly. How that risk level compares to other more traditional investments is up for debate.

When you lend stablecoins, what is the risk that the other party doesn’t pay your loan back?

 

[JRP3]

Because I know I will lose them as friends with 100% certainty if my coins are worth half a million each and they didn’t take my directives.

I'd say those are some lame "friends".

 

[JRP3]

Let's say your checking account has a $10,000 average balance. After 5 years, it still has a $10,000 average balance.

In an alternate universe, you put all your "cash" into crypto instead of a checking account and use your crypto account to pay bills and make purchases.

After 5 years, the crypto has increased >100X, like Bitcoin has over the past 5 years. You now have a very large multiple of $10,000, assuming you've made the exact same purchases.

Which do you prefer?

In the real world no one puts all their wealth into a single asset. So as long as a person holds assets which will likely appreciate less than BTC they should not be paying for anything with BTC.

 

[MXWing]

I'd say those are some lame "friends".

Maybe "lose" is too harsh a word but the dynamics would change.. not for the better. Misery loves company, and so does success.

Say you have a group of five friends that all hung out together. 3 of them went into a lotto pool, and 2 didn't. The 3 score big.

BTC is likely looking to be this.

TSLA is life changing wealth already for a lot of people with the discussions of "stealth wealth". Cautioning others in the main forum about not getting Roadsters with STONKBTC as a custom license plate.

 

[SN_8]

Put the % of net assets that you can afford to lose in Bitcoin. Bitcoin. Not Ethereum, not alts, not stable coins but Bitcoin.

I wonder if you can expand upon your "not ethereum" statement. Everything I've seen says that Ethereum will be the rails on which the DeFi revolution rides. If true, is there not significant upside to Ethereum?

 

[cusetownusa]

It's not just quantum computing. 51% attacks (we've seen these on lesser coins than BTC).

And then there is the entire "you are @#$% out of luck if you lose access to your wallet". My business partner lost a thumb drive 10 years ago with 200 BTC on it. To this day it is still missing, and he's torn his house upside down multiple times.

If I lose access to my bank account, there are mechanisms in place to prove my identity and get access back. With BTC, it's gone, FOREVER. That's a titanic-level design problem there.

I was the biggest BTC bull there was, when I owned BTC. After I divested from it, I believe I have a more objective view of the pros/cons of BTC. At least much more objective than when I was mining the stuff.

You guys are making this all too complicated. It’s as simple as this:

Put the % of net assets that you can afford to lose in Bitcoin. Bitcoin. Not Ethereum, not alts, not stable coins but Bitcoin.

Continue to dollar cost average in with small amounts so you cannot complain about buying the tops.

Your downside is 100 percent loss of your risked amount. The upside is half a million or more per whole units of Bitcoin.

This strategy bakes in all the poo pop nonsense being spouted here by the bears.

I straight up told all my friends I don’t care if they lose 1-3% of their net worth buying Bitcoin. Missing out on 1-3% worth they can recover from. Missing out on 100X gains is a mental wound that would haunt them forever. They would be foolish to lose me as a friend over those amounts.

The smarter ones that listened when I told them it’s safer to buy BTC at 20k-25K today versus 18k, 3 years ago have already doubled up.

Because I know I will lose them as friends with 100% certainty if my coins are worth half a million each and they didn’t take my directives.

Another bit of friendly advice. I have not seen a single crypto expert post here on TMC. I’m not an expert but I possess sufficient competency to sort out the truly knowledge versus those just talking out of their ass.

Not an expert at crypto, not an expert at risk management. Competent at both however.

The bearish arguments spouted thus far show insufficient comprehension of blockchain.

Just thinking out loud as I don’t follow Bitcoin am that closely. But if it goes to $500,000 per coin will there be a bunch of Bitcoin trillionaires? I am assuming that there must be people that have over 200,000 coins if they accumulated them in the early years when cheap.