Bitcoin on the rise

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BRUTE
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Re: Bitcoin on the rise

Post by BRUTE »

NPV wrote:if gold is any guide, should not hinder liquidity.
plus Bitcoin is divisible up to 8 decimal points and can transfer around the globe in seconds. imagine being able to break gold bars down into fine dust any time, to pay whatever amount, and sending it via email.

vexed87
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Re: Bitcoin on the rise

Post by vexed87 »

I agree, if the levels of deflation were low enough, say <=2%, it probably wouldn't encourage any more hoarding than a 2% interest rate available on cash savings. However if the whole point of bitcoin is that there is no government intervention, who is to say deflation won't run away into the double digits periodically, as bitcoin won't prevent the kind of debt fueled asset bubbles and malinvestment that triggers deflationary collapses.

In principle, I wouldn't mind a little deflation every now and then, I would prefer that to the slow but inevitable ravaging of society by the self serving elites and their Keynesian economics. However I doubt we will see much appetite from the general public for adoption of a deflationary cryptocurrency once the reality of deflationary busts kick in. Also, a wholesale transition away from centrally manipulated fiat currency would undoubtedly result in severe austerity as debts can no longer be inflated away through QE, and lets face it, America and Great Britain don't have the industrial prowess to pay their debts back and there's little room for dramatic growth that would help us pay back our debt any time soon. Manufacturing in the UK is in terminal decline and we rely on financialization and borrowing to pay our bills. If we adopted bitcoin, society would have to put up with long term austerity until our debt is gone. This is the sensible approach, however society does not care for sacrifice in the short term, it would much rather kick the can, which is where we are right now.

Hypothetically, if there was a shift to bitcoin, the public would inevitably clamor for government intervention again, the whole reason we are in our current mess is the central banks have a mandate to prevent another 1930s style depression. Its an imperfect system, but the best we have, or so the public believe.

Bitcoin could work, in another world, perhaps after a debt jubilee, but what are the chances? Too many vested interests. In reality, we are more likely to see bitcoin and or other currencies being used in an underground fashion, say Venezuelan style collapse. I cannot see our increasingly authoritarian governments allowing a smooth transition away from fiat. It would likely take some form of collapse for bitcoin to become necessary, but then is the infrastructure going to be in place to support it? There's a reason why dollars are currently preferred to bitcoin in Venezuela at the moment, it's much simpler and doesn't require vast infrastructure to support it.

BRUTE
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Re: Bitcoin on the rise

Post by BRUTE »

debt fueled asset bubbles and malinvestment are a problem of deflation? brute would blame inflation for that.

it's true that the meta-currency issues are unlikely to be solved by bitcoin, and make bitcoin unlikely to be adopted as a state/majority currency. but that doesn't make bitcoin useless. credit cards and and rebate coupons also play valuable roles to some humans, despite not being legal tender.

bryan
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Re: Bitcoin on the rise

Post by bryan »

vexed87 wrote:Hypothetically, if there was a shift to bitcoin, the public would inevitably clamor for government intervention again.
So far, Bitcoin has proven to be resilient against "democratic" attacks already, if you believe the majority would have liked bigger blocks or other changes. The "techno-tyrant" developers and capitalist miners/economic players are the ones in control. It is a capital-based system through and through. A government is certainly a major actor that could kill Bitcoin dead if they wanted to (but the rub is it is alleged to cost more and more money the more popular it becomes and from a narrow game theory perspective the actor would be better served joining the party (dubious if you are talking about USG), unless you attack the human element which I suspect some folks are very good at).
vexed87 wrote:Bitcoin could work, in another world, perhaps after a debt jubilee, but what are the chances?
A small (big) enough chance that it "works" such that it makes sense to hold some bitcoins for the time being, of course. What are the chances that some hedge funds, commodity funds, banks etc begin holding some bitcoin? Lots of scenarios to think about. Already there is GBTC which is 100% marked up from BTC just because it is the (only) easy way to hold Bitcoin (and in tax-advantaged accounts). The risk/reward was at least obvious in early 2013.

The more likely outcome is a currently-not-available Bitcoin competitor will win.
I suspect is could be from the banking (see MUFG/BTMU or other banks experimenting) sector.
Or it could be from a government which institutes a democratic (or not), based on one human on vote, minting process. Or if they just mandate it's use (taxes, government services) and that's good enough for software folks to make it a de facto digital cash in there systems/services.
Or it could be from any company willing to back (floor exchange value) the coins by something more tangible (Apple products, WoW gold, etc).
Or it could be from the Internet, like Bitcoin, but much "better" (faster, easier, more capable to integrate into other systems, anonymous, minting is democratic (identity) instead of capitalistic, interesting monetary policies like a basic income).

As you can see, there is a lot of room for competition. It's just network effects that could keep Bitcoin at the top, if people ever build on top of it and integrate it into other systems (21.co is the biggest company involved in this effort, I think).
BRUTE wrote:bitcoin unlikely to be adopted as a state/majority currency.
Which brings us to one interesting conspiracy still viable: why hasn't Satoshi spent any of his billions? Maybe it is a government sponsored experiment and those funds are locked away?!?

But what stops some backwater state from buying some or setting up mining operations and then announcing it's the new currency? (probably being invaded or embargoed, depending on geopolitics)

chenda
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Re: Bitcoin on the rise

Post by chenda »

vexed87 wrote:In principle, I wouldn't mind a little deflation every now and then, I would prefer that to the slow but inevitable ravaging of society by the self serving elites and their Keynesian economics.
Elites have rejected Keynesian economics.

BRUTE
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Re: Bitcoin on the rise

Post by BRUTE »

does chenda care to elaborate? brute would agree that elites use keynesian "economics" to hoodwink dumb humans

chenda
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Re: Bitcoin on the rise

Post by chenda »

BRUTE wrote:does chenda care to elaborate? brute would agree that elites use keynesian "economics" to hoodwink dumb humans
They have persued austerity in a liquidity trap and have done little to alievate unemployment.

Hankaroundtheworld
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Re: Bitcoin on the rise

Post by Hankaroundtheworld »

In the meantime DOA (and Application / Smart contract) on top of Ethereum has been hacked, and ETH dived 30% in value. Just to show the risks in investing in these new technologies, hence why I call it fun-investments (casino play). By the way, to show you how greed works, I now bought more ETH with this lower rate, and I probably get punished for it :-) People need to re-learn all the time!

BRUTE
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Re: Bitcoin on the rise

Post by BRUTE »

chenda wrote:
BRUTE wrote:does chenda care to elaborate? brute would agree that elites use keynesian "economics" to hoodwink dumb humans
They have persued austerity in a liquidity trap and have done little to alievate unemployment.
brute and chenda must be talking about different elites. brute is pretty sure this cannot be said about the FED ;)

chenda
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Re: Bitcoin on the rise

Post by chenda »

BRUTE wrote:brute and chenda must be talking about different elites. brute is pretty sure this cannot be said about the FED ;)
Keynesians have been critical of the Federal Reserve, for an inadequate programme of quantitative easing and too low an inflation target. Chairman Bernanke has ignored Professor Bernanke's own advice.

BRUTE
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Re: Bitcoin on the rise

Post by BRUTE »

maybe some keynesians have. the monetary expansion under the ben bernank has been pretty unprecedented.

brute personally has yet to see anything he'd call "austerity".

Ydobon
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Re: Bitcoin on the rise

Post by Ydobon »

I would posit that the Greeks have experienced something close to austerity, or at least a nasty period of cold turkey!

BRUTE
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Re: Bitcoin on the rise

Post by BRUTE »

certainly their government hasn't, at least not "austerity" in relation to a terrible economic crisis.
http://www.tradingeconomics.com/greece/ ... t-spending

brute always finds it funny how humans compare post-bubble spending to mid-bubble spending, determine it's lower but humans are unhappy, and then claim "austerity doesn't work". what do humans think caused the bubble, austerity?

trfie
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Re: Bitcoin on the rise

Post by trfie »

A lot of separate topics are being confused here.

Yes, most/all major state-sponsored currencies are inflationary and have their own problems. This has nothing to do with bitcoin, except that it makes bitcoin more valuable because relatively, it has advantages over other currencies.

Gold has its own issues and is not used as a currency anywhere because of this. Fiat currencies can no longer be exchanged for gold. So gold cannot be used to support bitcoin being used as a currency.

Why is there an assumption that the deflation of bitcoin will be <2%? It will be more than 2% per year, but in actuality the deflation cannot be predicted in advance and there will be separate problems because of this. It was also commented about being a long-term problem, which is true, but this is not an argument in favor of bitcoin, only that the problems will not happen right now.

I think it's possible for a cryptocurrency to be created that deals with all of these issues and has all the advantages over traditional currency, but it hasn't been created yet.

BRUTE
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Re: Bitcoin on the rise

Post by BRUTE »

the 2% deflation was just an example. nobody freaks out over 2% inflation (except goldbugs). brute thinks deflation is a neutral phenomenon, not a bad phenomenon. it has certain implications, just like inflation does. the people who are afraid of it (and criticize bitcoin for being deflationary) are usually keynesians who think the only way the economy isn't going to tank is PRINT BABY PRINT.

wood
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Re: Bitcoin on the rise

Post by wood »

Bitcoin got hacked the other day and dropped 20% in value. I'm just waiting for something similar to happen to "real" money.

Ydobon
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Re: Bitcoin on the rise

Post by Ydobon »

wood wrote:Bitcoin got hacked the other day and dropped 20% in value. I'm just waiting for something similar to happen to "real" money.
It seems to be happening every other day in the UK at the moment :lol:

ether
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Re: Bitcoin on the rise

Post by ether »

wood wrote:Bitcoin got hacked the other day and dropped 20% in value. I'm just waiting for something similar to happen to "real" money.
Happens more than you think! It's just market participants don't freak out when it happens to the USD!
Read Here

Banks use SWIFT instead of blockchain. There is a reason people are excited about blockchain technology!

BRUTE
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Re: Bitcoin on the rise

Post by BRUTE »

bitcoin did not get hacked, a huge exchange got hacked. that's like saying the USD got hacked vs. BoA got hacked (which happens all the time).

many banks are actively researching blockchain technology right now. brute thinks this is going to be a big thing in finance/banking soon. it's such a resilient ledger, which seems to be very important in banking.

Ydobon
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Re: Bitcoin on the rise

Post by Ydobon »

I would be interested in buying BTC with a very small amount of my fun money (basically gambling and a chance to find out more about the technology, which is fascinating).

Does anyone have any tips for someone just starting out?

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