Major fall in BTC price (16th Jan)

[MrEarl]

Hi Duke,

GMO Internet in Japan are offering to pay part salaries in Bitcoin from early next year. Perhaps there are other employers also offering to provide the same, I'm not sure just recall seeing mention of this particular one.

Wagepoint in Canada are also providing payroll facilities for companies who are paying staff in Bitcoin and are reporting some take up (albeit modest).

Anyway, the point being that people may be getting Bitcoin as a result of their regular employment

 

[jman0war]

Lots of companies in the crypto space pay their employees in crypto.
This is not new.

 

[TheBigShort]

also note that your faith in bitcoin is founded on the very open minded vision that US and UK citizens will abandon their cherished currencies in favour of the crypto. You are right, I have a closed mind on that, it won't happen

Citizens rarely if ever abandon their currencies willingly - the euro is a notable exception where 18 countries did so.

Economic forces will determine whether or not citizens abandon their currencies or not for some other form of currency.
The fact that the concept of cryptocurrency has emerged, regardless of its apparent flaws and inefficiencies, should give any reasoned person interested in the concept pause for thought.
Perhaps bitcoin will crash to zero. Who knows? But the concept is there and in my opinion, here to stay.
Even Brendan acknowledged that cryptocurrency may have value in the future - he is just sure it wont be through bitcoin.

 

[Brendan Burgess]

Perhaps bitcoin will crash to zero. Who knows?

I do, and so do most observers who are not caught up in the bubble and so can make a realistic assessment.

Brendan

 

[jman0war]

Let me explain what I mean by "natural". For a US citizen the natural currency is the dollar, for a UK citizen it is the pound etc. The only natural users of bitcoin would appear to be miners or criminals.

Your concept of 'natural' currency is totally contradicted in many places in the world though, such as Mexico, Panama, Argentina, Costa Rica, Honduras and even Zimbabwe where people will accept USD even while it's not an "official" currency of those countries.

Add: Canada, Cambodia, Peru, Afghanistan and probably more.

Heck even in Ireland, British Pound notes were accepted as money in shops and pubs before the Euro. Despite that currency having no legal tender status in RoI

 

[TheBigShort]

British pound notes are still accepted in parts of Ireland, as is the Euro in parts of the UK - namely border areas of Ireland.

Interestingly £Stg issued in NI is not accepted in parts of UK.

Economic forces ultimatley dictate what we use for currency. Central banks are mere facilitators.

 

[TheBigShort]

I do, and so do most observers who are not caught up in the bubble and so can make a realistic assessment.

Brendan

Doesn't make you or 'most observers' right, does it?

 

[tecate]

I presumed that the only folk whose main source of income was in bitcoin and who were therefore natural users thereof were miners and criminals.

That's not what you said but thanks for clarifying. It's unreasonable to apply that filter given that you know well the delicate embryonic stage crypto is at. I'm sure there are plenty who accept it as a form of payment but it isn't going to be their main source of income as we have not got the adoption levels yet. Furthermore, you're well aware that there's a scaling issue that needs to be resolved right now.

I also note that your faith in bitcoin is founded on the very open minded vision that US and UK citizens will abandon their cherished currencies in favour of the crypto. You are right, I have a closed mind on that, it won't happen. The fact that there are people like you who foresee that happening helps explain the ludicrous price.

I believe that they can co-exist - and that would be a fundamental change in itself (with crypto or bitcoin being used extensively). You gave the UK and US as examples. Who knows what the future holds. Who knows how much further FIAT currencies will continue to be debased. Furthermore, there are other national currencies which find themselves in turmoil from time to time (others have given you current examples). If your FIAT is worth jack (and those are circumstances that do happen in some countries), you think that as a citizen you would give a damn about that currency if you could use an alternative? If that alternative continues to become more stable as it progresses, it seems logical to me that there may be an even greater adoption of it - in such places.
I also believe that a cryptocurrency could potentially act as a world reserve currency in the much longer term.

 

[Duke of Marmalade]

Heck even in Ireland, British Pound notes were accepted as money in shops and pubs before the Euro. Despite that currency having no legal tender status in RoI

Good now I have a hook on which to hang my concept of natural currency. Retailers in Newry have the £ as there NC but they recognize that many of their customers have the € as their NC. So most will accept both. This is not a gimmick. Some will even dual price though many will price in £ but fix an exchange rate. Either works because of the stickiness of the exchange rate.

So a buyer’s NC is the one which is most convenient. This is usually the currency of the source of income. For bitcoin that would only include miners. But there are possibly two other constituencies whose NC is bitcoin. Criminals whose source of income is fiat but want to hide that. Also Zimbantines. These our folk who distrust their income currency and immediately convert to something else, usually a reserve currency like the $ but possibly BTC. These people tend to come from countries like Zimbabwe or Argentina but there are €-Zimbantines like tecate.

Now getting back to the article. A Canadian KFC accepting bitcoin is definitely a gimmick. No way are their folk whose natural currency for buying a snack box is bitcoin.

The apartments are different. There may be criminals and Zimbantines who find it more convenient to use bitcoin.

Bottom line is that it is pathetic to read an article like this clutching at these rare sightings as evidence that bitcoin has come of age as a transactional currency.

 

[tecate]

Also Zimbantines. These our folk who distrust their income currency and immediately convert to something else, usually a reserve currency like the $ but possibly BTC. These people tend to come from countries like Zimbabwe or Argentina but there are €-Zimbantines like tecate.

Would you like to explain what it is you're babbling on with here in terms of your reference to me?

Bottom line is that it is pathetic to read an article like this clutching at these rare sightings as evidence that bitcoin has come of age as a transactional currency.

Who said that Bitcoin has 'come of age'? I think everyone here has acknowledged that bitcoin - and cryptocurrencies generally - are still in development and have not in any way reached maturity.

A Canadian KFC accepting bitcoin is definitely a gimmick. No way are their folk whose natural currency for buying a snack box is bitcoin.

It really is irrelevant whether you believe it to be a 'gimmick' or not. The bottom line is that it's one more entity that accepts BTC payment. It only needs for a modest but ongoing momentum in this direction for BTC to become a realistic transactional currency. If Lightning Network is implemented successfully, then it will become a much more realistic prospect.

As regards your view that only criminals will use bitcoin, what of the extortionate rates of the $500 billion / year remittance industry? We're talking about western union and the likes. One of the largest remittance markets is the Philippines. Are Filipinos using a bitcoin remittance startup ( rebit.ph ) for the purposes of more cost effective remittances all criminals?

What of those that have to use 'wire transfers' for sending money internationally? Are they criminals also if they use a crypto based solution? If you have sent an international wire transfer, you will understand just how archaic and expensive that system is.

 

[Gordon Gekko]

For the love of God...nobody is saying that the currencies of the future won’t be digital in nature. It’s just that they’ll be the Digital Dollar etc and they’ll be backed by the Federal Reserve and the US Military. A few yahoos in their bedrooms can do a lot, but they can’t subvert the entire monetary system. All of the issues highlighted by others are reasons why Bitcoin and unregulated currencies generally are going nowhere. Bitcoin will become of negligible value; it is WorldofFruit.Com whereas Blockchain technology may be analagous to the internet.

 

[tecate]

For the love of God...nobody is saying that the currencies of the future won’t be digital in nature. It’s just that they’ll be the Digital Dollar etc and they’ll be backed by the Federal Reserve and the US Military.

Apples and Oranges. You're talking about centralised digital currencies whilst suggesting there is no room for a decentralised digital currency. As for the former, it will be interesting to watch the implementation. There's a hell of a difference between one getting hacked as opposed to the other in terms of the fallout.

A few yahoos in their bedrooms can do a lot, but they can’t subvert the entire monetary system.

Firstly, you can try and label it in that way to suit your narrative but it's gone beyond 'yahoo's in their bedrooms' as you put it. As regards 'subverting the entire monetary system', who says they can't co-exist? That's not a case of 'subverting the entire monetary system'.

All of the issues highlighted by others are reasons why Bitcoin and unregulated currencies generally are going nowhere.

Regulated in Japan - and regulation clearly on the way elsewhere shortly. There has been talk of nothing else in 2018.

it is WorldofFruit.Com whereas Blockchain technology may be analagous to the internet.

You're talking about centralised applications of the technology. They can't possibly have the same benefit.

 

[Gordon Gekko]

The salient point is that the established monetary system cannot tolerate a meaningful non-centralised currency because of the disruption it could cause.

A few yahoo hipsters paying for soy lattes with their Bitcoin do not a currency make.

 

[TheBigShort]

The salient point is that the established monetary system cannot tolerate a meaningful non-centralised currency because of the disruption it could cause.

Correct.

At this juncture bitcoin has no meaningful significance to the existing monetary system. But if it ever were to, how would governments curtail its impact on the system?

 

[tecate]

The salient point is that the established monetary system cannot tolerate a meaningful non-centralised currency because of the disruption it could cause.

Ok, so why don't they just summarily ban it then - across the board?

 

[Gordon Gekko]

Correct.

At this juncture bitcoin has no meaningful significance to the existing monetary system. But if it ever were to, how would governments curtail its impact on the system?

Criminalise it. Shut down the on and off ramps.

Tax gains on Bitcoin at 90%.

As I understand it, some of the mainstream banks will no longer facilitate transfer to/from Coinbase.

 

[Duke of Marmalade]

Would you like to explain what it is you're babbling on with here in terms of your reference to me? (calling me a €-Zimbantine)

Tut, tut. I'll go slowly here. You rebuked me for insinuating you were a criminal for which I sincerely apologised. I presumed you had made your inference because I said the only natural users of bitcoin were miners and criminals. I therefore concluded that bitcoin was your natural currency but you were neither a miner nor a criminal. With me so far?

On considering this and also inputs from others I realised that I was forgetting the main target audience for bitcoin - Zimbantines - people who do not trust the currency of their income and immediately convert it and save it in bitcoin. You had to be one of them. And here I admit I made a rash leap of deduction, I presumed your primary income was €. Of course that may not be true. Can you disclose what is the currency of your primary source of income?

 

[TheBigShort]

Criminalise it. Shut down the on and off ramps.

Tax gains on Bitcoin at 90%.

As I understand it, some of the mainstream banks will no longer facilitate transfer to/from Coinbase.

It would be interesting to see how it could be criminalised. Would it be illegal to possess it, or trade it, or both?
As its not tangible, and exists as basically code on a computer, its hard to imagine how legislators could actually legislate for that, without that legislation being easily circumvented.

As for the tax, why hold back and just tax gains at 100%. Certainly that would flush out the speculators. On the other hand it would probably require global agreement, otherwise capital outflows would occur to regions that offer preferential rates. I think this is apparently China's biggest issue with bitcoin at the moment. I dont see any other nations rushing to assist with their predicament.

Ive heard about banks refusing to facilitate credit card payments, which is welcome. But debit card payments, the money belongs to the account holder. As long as Coinbase complies with its regulatory requirements then banks have no business or authority to stop me engaging in trade with them. This is tenet of free trade is it not?

 

[tecate]

..for which I sincerely apologised.

Tut, tut. I'll go slowly here. ..With me so far?

I don't much care for your bad manners and clear lack of sincerity.

I was forgetting the main target audience for bitcoin - Zimbantines

I think it would be far more useful to stick with the english language in discussing the topic - I can't see how making up words assists.

I said the only natural users of bitcoin were miners and criminals.

Nonsense. That's you framing it with your 'natural users' to suit your own narrative. A 'natural' user of bitcoin is anyone who chooses to use it - it's as simple as that. This nonsensical suggestion that it's only relevant if an individual carrys out every transaction through BTC in 2018 doesn't hold water. You know perfectly well that any such change would be gradual (even if I or anyone else here was suggesting that it's likely that every such transaction would be carried out in BTC - we're not. BTC (or another crypto) can exist alongside FIAT). Furthermore, I've given you other use cases for the use of bitcoin which you choose to ignore.

 

[Gordon Gekko]

Ive heard about banks refusing to facilitate credit card payments, which is welcome. But debit card payments, the money belongs to the account holder. As long as Coinbase complies with its regulatory requirements then banks have no business or authority to stop me engaging in trade with them. This is tenet of free trade is it not?

Free trade doesn’t matter when it comes to regulated industries like banking and finance. Banks and authorities are free to blacklist and refuse to deal with counterparties. Which makes sense in the case of Cojnbase and assets like Bitcoin. Goldman Sachs have due diligence to ensure they’re not dealing with Al Queda or the Cali Cartel; regulation in the crypto-world is almost non-existent.