I note that the bitcoin community seem to have given up on the medium of exchange motif and are pinning everything on the "digital gold" aspect.
Absolutely!! They are inseparable in the case of a currency.Have a look at the Lightning Network. SOV and payments are not mutually exclusive.
I don't think anyone knows how it will exactly play out but its worth a small percentage of your portfolio imo. Anyone who invested the past 10 years has done extremely well.Not at all, Willie Mullins had a 5,000/1 five timer last Sunday. 5,000/1 in one day! As much entitlement to be called an asset class as a digital entry signifying nothing.
There have been thousands of cryptos. Betting them all would be like betting a myriad of racehorse combinations. Yes a few have been spectacular winners. Most have bit the dirt.I don't think anyone knows how it will exactly play out but its worth a small percentage of your portfolio imo. Anyone who invested the past 10 years has done extremely well.
You clearly have not invested then. It's funny how people who invest are blind and don't care about it's flaws and just want it go up and almost try to cling onto any argument supporting it and encourage anyone else to buy, buy, buy. On the other side those who haven't invested are desperate for it to fail, probably some jealousy there that others have made bank off it.There have been thousands of cryptos. Betting them all would be like betting a myriad of racehorse combinations. Yes a few have been spectacular winners. Most have bit the dirt.
Yes a few have been spectacular winners
It's funny how people who invest are blind and don't care about it's flaws and just want it go up and almost try to cling onto any argument supporting it and encourage anyone else to buy, buy, buy.
I don't know a lot about bitcoin but I know there are some good points to it and some flaws or inefficiencies with it, like anything. I should have said in my previous post many who invest are blind, a lot who promote it are of course encouraging everyone to buy it so the price then continues to go up. That's a fair reason for buying, I think it will easily go up past 50k, how far I don't know.Care to elaborate?
Care to elaborate on the flaws of bitcoin?
I don't buy bitcoin in the hope that it will go up. I buy bitcoin because I believe it will retain, at a minimum, the purchasing power of my euro over the foreseeable future.
My argument for that is the continued and no-end-in-sight of fiat currency debasement by 'trusted' central banks.
So you don't buy because it will be an efficient medium of exchange for you, which was its primary purpose.I don't buy bitcoin in the hope that it will go up. I buy bitcoin because I believe it will retain, at a minimum, the purchasing power of my euro over the foreseeable future.
So you don't buy because it will be an efficient medium of exchange for you, which was its primary purpose.
P.S Bitcoin is not decentralised.
Sure - promote a system where people get robbed by stealth every year.Depositors never had it so good as today.
Another day, another nonsensical analogy. What characteristics of a store of value or money does one of Willie's nags possess?Not at all, Willie Mullins had a 5,000/1 five timer last Sunday. 5,000/1 in one day! As much entitlement to be called an asset class as a digital entry signifying nothing.
For who's benefit? You're propping up an inequitable system - and it's that system that has only been around over the past 50 years that is the great experiment - not bitcoin. Note that CBDCs will be used for social manipulation like never before. A government can simply seize your 'money' at the touch of a button. They can give you a time limit as to how long you have to use it (encouraging responsible fiscal behaviour...NOT). They can penalise you depending upon what you spend your money on. That is the world of CBDCs that awaits.But yes I think the facility to charge negative interest rates would make monetary policy more effective and that would facilitate the central bank's role in managing monetary policy in the interests of society.
I think you are at this stage familiar with how the project has developed thus far. That doesn't negate its ability to innovate further. Bitcoin remains a legitimate and superior settlement layer for large transactions. Nothing stands in its way in that regard. The cup of coffee purchase (micro-transactions) is a different animal. The mistake (or more likely convenient assumption) that naysayers like yourself run with is that it doesn't fit that purpose today, therefore I won't listen to the notion of it (or associated projects) being developed to accommodate that purpose.I note that the bitcoin community seem to have given up on the medium of exchange motif and are pinning everything on the "digital gold" aspect.
And disregard the superior characteristics of bitcoin vs. gold? Why would I do that? Is gold divisible...because bitcoin is. Can gold be safely transported across borders without risk of confiscation - because bitcoin can. In reality, how easy is it to transport and store gold? Are there costs associated with it? The vast majority of gold is stored centrally - meaning that the entire market can be and is manipulated. Billions of dollars worth of fake gold were found in vaults last year alone - yet bitcoin cant be counterfeited. Digital cornflakes indeed.If it is gold you want surely the real thing is far better than some virtual digital replacement. Can you imagine digital cornflakes?
Absolutely. And the story of the development of each of them remains unfinished business yet there's a mob here that wants to dismiss any notion of further progression/innovation. To me, it seems reasonable that as the pool of people that hold bitcoin increases they will from time to time use that facility to exchange value. Particularly so - if UX/design makes that option more user friendly. Gold has never had that option.SOV and payments are not mutually exclusive.
You're trying to contrive something here to meet your narrative. There is nothing within the laws of physics that dictates that bitcoin has to develop as a medium of exchange first.The other way round, that a medium of exchange should at least be a short term SOV, is orthodox monetary theory.
His credibility is shot. Where has he ever recognised one positive facet of decentralised blockchain? Turkeys don't vote for Christmas and the monetary implications of bitcoin challenge the status quo as it exists for him and his central banking buddies. Having been wrong since bitcoin was at $13, he keeps doubling and tripling down and it keeps getting worse for him.I'm a bit worried about the Roubini chap now after listening to that interview. He more or less says the exact same thing he has been saying for years. Its becoming a bit of a broken record. Does he not listen to himself?
An allocation of no more than a couple of percent would provide exposure to an asset with significant upside potential (representing an assymetric risk) whilst limiting portfolio downside risk. That was my suggestion here a couple of years ago already.I don't think anyone knows how it will exactly play out but its worth a small percentage of your portfolio imo. Anyone who invested the past 10 years has done extremely well.
There have been (and continue to be) thousands of startups outside of crypto. Most of them have failed or will fail. There were thousands of tech startups back in the dot com. I've no doubt that some gambled but what if someone spent the time on it and identified Google/Amazon/Facebook, etc. as winners at a very early stage?There have been thousands of cryptos. Betting them all would be like betting a myriad of racehorse combinations. Yes a few have been spectacular winners. Most have bit the dirt.
Indeed. I don't see much depth to that discussion on AAM. The case is often made that its not so much bitcoin price going up as euro/usd going down the toilet.My argument for that is the continued and no-end-in-sight of fiat currency debasement by 'trusted' central banks.
As was pointed out to you, store of value was identified as a feature at an early stage. Even if what you claim was true, so what? Time and time again, new tech gets used for various purposes.So you don't buy because it will be an efficient medium of exchange for you, which was its primary purpose.
I agree with you Wolfie that it's likely that a means will be found to provide for improved user experience when it comes to micro transactions as we move forward. Internet had scaling issues that took quite a while to overcome. Why should this be any different.I know it is not an efficient medium of exchange, today. I expect it will be more than efficient at some point.
No? Thats new on me. Care to elaborate?
Take no notice, Wolfie - it's just more scaremongering. There is no economic incentive for such actors to attack the very network that feeds them. It would cost billions to attack the network in that way. There is no economic incentive for miners to act in that way - quite the opposite. This is the sort of fear, uncertainty and doubt that the likes of Roubini (or anyone who is diametrically opposed to decentralised crypto) comes out with.No? Thats new on me. Care to elaborate?
Take no notice, Wolfie - it's just more scaremongering. There is no economic incentive for such actors to attack the very network that feeds them. It would cost billions to attack the network in that way. There is no economic incentive for miners to act in that way - quite the opposite. This is the sort of fear, uncertainty and doubt that the likes of Roubini (or anyone who is diametrically opposed to decentralised crypto) comes out with.
Chinese Miners Do Not Provide a Credible Threat to Bitcoin's Decentralised Peer to Peer Network
There is no realistic and credible threat to the bitcoin network from any Chinese entity - be that a corporation or the Chinese government. On mining pools, participants can move from one mining pool to another dynamically - they're not locked in. If the controller of a mining pool worked against their interest they wouldn't be long in doing that.
If it cost X billion to carry out an attack on the network and the potential upside was much less than the cost of the attack, what participant in a mining pool is going to be down with that?
On the government threat - firstly, they would need a motivation. Who would they be attacking in going to all that effort? But for all intents and purposes, lets assume that the Chinese government have one. Mining farms are cast all over China - often in remote inaccessible locations. The Chinese can't move against these miners without letting the cat out of the bag that something is afoot. Counter measures would be taken. The attack would fail. At worst it would cause temporary network disruption. As with all other attacks, such an eventuality would only serve to make the network stronger in the longer term.
Would greater geographical distribution of mining facilities be optimal? Sure. Notwithstanding that, any reasonable appraisal of the current threat potential that I've come across doesn't suggest that such an eventuality would destroy bitcoin. Beyond that, I do see greater distribution of such facilities in other regions as we move forward. We've already seen increased growth in that regard in regions such as North America. Of course for the Roubini's of this world that have a hatred for bitcoin, such individuals will latch on to any old rubbish without even handed assessment simply because its useful to them in casting fear, uncertainty and doubt.
Bitcoin Distribution was Equitable
With regard to economic distribution of bitcoin, Satoshi couldn't possibly have designed distribution more equitably. Bitcoin was available for free to anyone who wanted it at the very beginning. It was available for next to nothing for the first number of years. Anyone with the foresight to recognise the societal good that it represents are well entitled to whatever dividend has come with that. Over and above that, bitcoin is available today to anyone that wants it. Over the course of 3-4 years of debate here on AAM, it has been available at low cost to anyone who felt they had missed out. It's available to them today at a higher cost. It will be available to them in the not too distant at a higher cost still.
There are an ever growing number of actively used wallet addresses - that metric has grown year on year over the course of this long running debate. That's indicative of growing network effect and adoption.
Regulation Continues to Evolve
Taxation policy is but one aspect in all of this. As the userbase for the cryptocurrency continues to grow, sane and reasonable tax policy will have to follow. Of course governments can be unreasonable - but they're going to have to be careful or that will blow up in their faces. Furthermore, we're talking about a digital asset that has given itself license anywhere on the planet. Tax policies and regulation vary. India banned crypto a couple of years ago only to do a u-turn. Now it looks like they're going to implement a ban again. Lets see how that goes for them! Meanwhile, in the US long term bitcoin proponent senator Cynthia Lummis ( a former state treasurer) has just joined the banking committee. She joins quite a number of bitcoin-enlightened house representatives. I would expect that such tax treatment will be addressed in due course. Even if its not, it's not the greater issue with regard to the use of bitcoin as a means of exchange. Scalability and usability are. Both of those aspects are being worked on in one way or another. People often expect instant results but my understanding is that this is not how development works. It's slow, and iterative.
Bitcoin's Energy Usage has Purpose
The recent uptick in price has brought renewed focus on Bitcoin. With that, all the usual dated arguments are being rolled out once again. One of those is the energy requirement of bitcoin's proof of work consensus mechanism. Firstly, for anyone who has no appreciation of the societal good that bitcoin offers, they're never going to have a positive view towards bitcoin's energy usage. The reality is that conventional banking uses a hell of a lot more energy. Secondly, bitcoin is the energy buyer of last resort. The mining industry is driving innovative approaches in that respect. As this progresses, more and more renewable power is being used for this purpose. That level currently stands at 70%. Miners don't compete with any other users for power - as if they did then it wouldn't be cheap enough and they'd simply be uncompetitive. Far and away more energy is wasted every day of the week than is needed to power the bitcoin network. Flared off gas is now being used for bitcoin mining. Stranded renewable power is being utilised. In power plants throughout the world, an incredible amount of energy is simply wasted. Bitcoin mining now provides a use case for that wastage.
Bitcoin's proof of work based consensus mechanism provides for the most robust network on the planet. If after many years of real world road testing another model proves itself, I'm sure bitcoin developers would consider adopting it. However, any such changes to the bitcoin protocol are insanely (and deliberately) slow in their implementation (and arrived at by consensus). Notwithstanding that, the bottom line is that the energy usage is accounted for by stakeholders and it serves a purpose. So long as someone on here or elsewhere maintains that bitcoin offers nothing, then of course that argument will be perpetual - but so be it.
Bitcoin Transaction Fees & Sustainability
Mining is currently profitable - or else miners simply wouldn't have an economic incentive to carry out that activity. Block rewards will be phased out by 2140. From that point, miners will rely exclusively upon transaction fees. Therefore, the current year on year increase in network effect and adoption will need to continue to ensure that mining is sustainable. Aspersions have been cast as to sustainability re. transaction fees as the block reward reduces. Whilst changes made to the bitcoin protocol are insanely and deliberately slow and conservative, there is ongoing development taking place with tweaks and improvements applied. Looking that far ahead, its difficult to figure out whether there is an issue to be tackled here or not. However, over the coming years, there is no concern in this regard.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?