Brendan Burgess
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Major fall in BTC price (16th Jan)
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Brendan Burgess
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The only reason you are holding it is because you expect it to rise in value.
I have bought art for enjoyment and I know full well when I buy it that if I ever want to sell it, I am very unlikely to get my money back.
People buy paintings primarily for their aesthetic value. With the Basquiats, it more complicated than that.
Each Basquiat is different. Each of the millions of Bitcoins is the exact same. And they are not much different in aesthetic value from any of the pretenders.
Very few prints with large editions make high prices.
Brendan
I think that bitcoin will remain bitcoin, while that monopoly money called FIAT will be mis-managed as usual so will end up deflating in value.
In that context, yes bitcoin goes up, but not for anything that bitcoin has done.
Duke of Marmalade
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Deflation in value is of course the opposite of inflation and I don't quite see why bitcoin should go up in that scenario.
As people lose confidence in FIAT money retaining value, they'll want to buy bitcoin.
But bitcoin has a limited supply so that new demand will push the price higher.
This will be exacerbated by central banks printing more money, that currency inflation decreases it's value in relation to anything else.
Duke of Marmalade
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Well yeah, I can see inflation being bad for fiat versus crypto but deflation as well?
Duke of Marmalade
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Ahh! You probably meant declines.
I'm not sure what you're not getting in relation to the piece that I'd written - which you quoted?
I haven't agreed that it's a certainty but I've stated that it's quite possible that BTC could go down to a very low level (zero means it's completely failed...not sure If I'd go that far...I guess just above the level of mining costs is what I'm thinking in a worst case scenario when considering the pricing aspect of it only).
Blockchain on it's own is useless without there being 'tokens' on the chain. It won't function otherwise and as for centralised blockchain, I think that's completely pointless.
I'm sure I did make reference on AAM previously to it being the internet of money. However, I'm thinking in terms of not just BTC in that respect. There are a whole host of services which could emerge as a consequence. BTC will not be the be all and end all for all such cases (in fact, it remains to be seen if BTC will succeed completely at all...it could be another crypto).
Well, I guess I must not value it right now at 10k/coin as I have not taken the bait and bought back in. The Tether issue has me spooked - and I'd like to see that thrashed out and brought to a conclusion one way or the other. The problem is - I don't see how that can be done with them being registered in the BVI.
Is there no conceivable possibility that the strength of market sentiment will be maintained? However, the discussion I've been having with the Duke is about the BTC project overall. I thought you had pointed out yourself that there could well be value in BTC as a technology - just not at the price it's at. Lets say for example that BTC was $10/coin for arguments sake. Is there no way in your mind that it could function as a currency in specific circumstances (alongside FIAT ...and not replacing FIAT)?
I've already given a few use cases.
In summary, there are two aspects;
1. The ongoing speculation ref. the price of BTC. Perhaps it will be maintained and perhaps it will slump permanently. The technology will still exist. However, it seems that one of the key proponents of Bitcoin Core - the Blockstream team - have been pushing it as a store of value more so than a transactional currency.
2. The actual nuts and bolts of it as a technology were what it all started with before there was any pricing speculation. That's the core of it. It was intended for use as a transactional currency. However, it's slipped insofar as it's hit a scaling issue. Lightning Network is on the way - and so, it's hoped that it will once again be a functional transactional currency.
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Brendan Burgess
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Possibly. I don't think it's worth $10 a coin, but it could have a token value like that.
I don't really get the point though. If someone is paying $11,000 today, there is no difference between a fall to zero and to $10.
My understanding of it is that the cost of transactions is very high, so if the price falls to $10 a coin, then it won't be worth transacting at that price.
Brendan
Well, I brought it down to near your valuation to take the pricing aspect of it out of the picture. You had said previously that you could see a logic in it without the mad valuation....OR....are you taking the banking line? i.e. Bitcoin = Bad, Blockchain = Good?
Because if that's the case, I don't agree in any way, shape or form.
The banks are going with this nonsense having initially dismissed it totally. A blockchain that is centralised and doesn't have any tokens running on it - is just a glorified database without all of the advantages that the bitcoin blockchain brings with it. It has the potential to cut into some of their revenue streams - it's why they're taking this position. Also, we discussed recently the matter of banks cutting off customers ability to purchase BTC via Credit Card. A couple of banks are now taking that a step further - and applied it to debit card. I don't personally agree with people being wreckless (buying via Credit Card) - but then not all of them were...many used this method as they saw an opportunity and it was/is the only way to react quickly in buying BTC...a SEPA transfer may take too long, a wire transfer will take longer still). However, preventing people to spend their own money on crypto is fundamentally wrong on every level. It proves the point I made back then. Even with Credit Cards, this notion that they were protecting customers was absolute nonsense. If that was the case, you couldn't buy any sports betting product with credit card. What really caps it off and proves it beyond doubt are the examples where they're banning Debit Card purchases.
It's exactly nonsense like this that led me to Bitcoin in the first place. Who the hell are they to dictate how anybody spends their money.
There is. I've left the door open on the BTC pricing debate. I accept that there is a possibility that the BTC price could plummet and stay down there. I don't think it will go to zero - or if it does, the project has failed. Equally, it could retain it's existing valuation or it could go higher.
I'm not going to argue with anyone on price other than to say that ultimately, BTC will find it's price - and I believe that will be greater than zero. On that basis - with the price speculation dealt with - BTC can still function as a transactional currency - and particularly with regard to the specific use cases I mentioned.
Transaction costs and times have only become an issue recently due to a scaling issue. Segwit was implemented and people were disappointed with the outcome. However, people need to understand that Segwit implementation is only at 14%. Once it's fully implemented, the benefits will be seen. In tandem with that, Lightning Network will be introduced in 2018. This will make real time transactions possible at negligible tx cost.....ergo...BTC will be back in the game as a transactional currency.
Layer 2 solutions will also take the pressure off the mean average cost in terms of mining and energy consumption.
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No this is stale information.
SegWit adoption continues and this is lowering transaction fees.
To get your transaction into the next block, fee right now is $3
- Next Block Fee: fee to have your transaction mined on the next block (10 minutes). $3.13
- 3 Blocks Fee: fee to have your transaction mined within three blocks (30 minutes). $2.84
- 6 Blocks Fee: fee to have your transaction mined within six blocks (1 hour). $0.28
https://bitcoinfees.info/
That's at 14% Segwit adoption. It seems we will see an uptick in adoption levels as per what's outlined in this article here. Layer 2 (Lightning Network) solution implementation will bring fees down to facilitate not just micro transactions but nano transactions. Furthermore, tx times will be instantaneous.
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TheBigShort
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Do you have any concrete examples of this? As I would imagine this is stepping over the line with regard to the rights of the individual to engage in free trade.
In order for a bank to put a block on debit card payments they have to have a reasonable basis to do.
When I sold bitcoin and deposited to my bank account it took a number of days for it to arrive. I called up the bank to inquire if there was any issue at their end or were there issues dealing with Coinbase. The customer service was pretty emphatic, they do not interfere in transactions where payer and payee have authorized the transaction.
They are mere facilitators in that regard.
It makes sense, if banks can at their own discretion block transactions between particular parties, with money that does not belong to them, then the prospect of market manipulation, price manipulation, unfair trade etc occuring would be ominous.
TheBigShort
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That's great thanks.
First point of note, its India, and not the EU, and my thinking is in terms of being an EU citizen.
This is what Citibank India says;
"Given concerns, both globally and locally, including from the Reserve Bank of India, cautioning members of the public regarding the potential economic, financial, operational, legal, customer protection, and security-related risks associated in dealing with bitcoins, cryptocurrencies, and virtual currencies, Citi India has decided to not permit usage of its credit and debit cards towards purchase or trading of such bitcoins, cryptocurrencies and virtual currencies,”
this probably amounts to their "reasonable basis"? In response;
'India’s cryptocurrency industry has sought to play down Citibank’s move. "Most purchases are done through internet banking, not using debit or credit cards", said Ajeet Khurana, head of the Blockchain and Cryptocurrency Committee, an industry lobby.'
So perhaps my err, banks can stop the use of trade through using their debit card, but my thinking was stopping the trade altogether. My transactions with Coinbase were all on-line. It may also be possible to block website access? But if this is the case, I would agree what it says further in the article;
"Even if banks were to justify this as necessary to mitigate their risk, I would find such a view to be very conservative and unjustifiable, which leads me to think that this is arm-twisting,” said Anirudh Rastogi,managing partner at law firm TRA, which represents several cryptocurrency businesses."
In any case, back in the EU, the ECB currently has this to say on its website;
"It is not the ECB’s responsibility to ban or regulate bitcoin or other cryptocurrencies. But, given the lack of consumer protection, it is important to exercise caution."
https://www.ecb.europa.eu/explainers/tell-me/html/what-is-bitcoin.en.html
So I think we are a long way from interference by the ECB at this point.
First point of note, its India, and not the EU, and my thinking is in terms of being an EU citizen.
This is what Citibank India says;
"Given concerns, both globally and locally, including from the Reserve Bank of India, cautioning members of the public regarding the potential economic, financial, operational, legal, customer protection, and security-related risks associated in dealing with bitcoins, cryptocurrencies, and virtual currencies, Citi India has decided to not permit usage of its credit and debit cards towards purchase or trading of such bitcoins, cryptocurrencies and virtual currencies,”
this probably amounts to their "reasonable basis"? In response;
'India’s cryptocurrency industry has sought to play down Citibank’s move. "Most purchases are done through internet banking, not using debit or credit cards", said Ajeet Khurana, head of the Blockchain and Cryptocurrency Committee, an industry lobby.'
So perhaps my err, banks can stop the use of trade through using their debit card, but my thinking was stopping the trade altogether. My transactions with Coinbase were all on-line. It may also be possible to block website access? But if this is the case, I would agree what it says further in the article;
"Even if banks were to justify this as necessary to mitigate their risk, I would find such a view to be very conservative and unjustifiable, which leads me to think that this is arm-twisting,” said Anirudh Rastogi,managing partner at law firm TRA, which represents several cryptocurrency businesses."
In any case, back in the EU, the ECB currently has this to say on its website;
"It is not the ECB’s responsibility to ban or regulate bitcoin or other cryptocurrencies. But, given the lack of consumer protection, it is important to exercise caution."
https://www.ecb.europa.eu/explainers/tell-me/html/what-is-bitcoin.en.html
So I think we are a long way from interference by the ECB at this point.
Makes no odds - to ban Debit Card transactions is completely wrong regardless of what country it happens in.
On the mitigating risk in terms of Credit Card transactions, if that's the case, why are they not mitigating risk by banning spend on Gambling services such as PaddyPower? Don't tell me that there are no hardcore gamblers that have not maxed out their Credit Cards on betting. Not only does this make a nonsense of their 'mitigating risk' argument, it also makes a nonsense of their 'protecting customers' argument.
Well, lets hope they don't pick up any bad habits from the Polish!
TheBigShort
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Totally agree, all it does is add weight to the reason to hold money outside the system. Come to think of it, if type of policy begins to catch on, I would imagine bitcoin price to rise rapidly.
State-owned Punjab National Bank cited in a nearly $2 billion fraud case.
You know those state-run, regulated institutions that are there to protect your money, or something.
You know those state-run, regulated institutions that are there to protect your money, or something.
http://www.bbc.com/news/business-43110085