Goldman Sachs now in the Crypto Exchange business & JP Morgan admit that Crypto is a threat

[tecate]

A few people on here have expressed confusion at how cryptocurrency could possibly be a threat to conventional banking.

Jamie Dimon of J.P. Morgan infamously suggested that Bitcoin was a fraud - amidst other outbursts in recent months. Meanwhile, J.P. Morgan have admitted for the first time that Crypto is a threat to their business;
"“Both financial institutions and their non-banking competitors face the risk that payment processing and other services could be disrupted by technologies, such as cryptocurrencies, that require no intermediation,” the bank (JPM, -1.18%) wrote in the report."

In other not unrelated news, Goldman Sachs is now in the Cryptocurrency Exchange business. I'll qualify that by saying that it's not direct - Goldman Sachs own a significant stake in payments company, Circle. Circle in turn have bought one of the largest european crypto-exchanges - Poloniex.

LINK.


Crypto pricing could well end up much lower as others on here have speculated. However, crypto itself is here to stay regardless of the pricing speculation.

 

[TheBigShort]

So what you are saying is, if I can interpret all this correctly, is that outside of the 'Bitcoin community', others are starting to see value in crypto?

 

[tecate]

So what you are saying is, if I can interpret all this correctly, is that outside of the 'Bitcoin community', others are starting to see value in crypto?

Both items are indicators that the established banking industry recognise that cryptocurrency is here to stay. That's not to say that crypto won't crash and burn (price-wise) as Brendan maintains. However, the price speculation end of things is separate. Crypto will survive regardless of that event taking place.

It could be that they see 'value' in it or that they see it as a 'threat' or both - depends upon the perspective

 

[Negotiator]

Crypto pricing could well end up much lower as others on here have speculated. However, crypto itself is here to stay regardless of the pricing speculation.

I totally agree, Cryptos are here to stay and I have absolutely no doubt about that. Price speculation is something that will settle down over time as the bad players get weeded out. At least Goldman Sachs aren't going around with their head in the sand like the vast majority in the banking industry!

 

[noproblem]

A building Co in Northern Ireland is now taking Bitcoin as payment for houses. There's also a stud farm selling racehorses for Bitcoin. I have no idea whatsoever if this will boost the "thing" or not, they could all be just taking a punt on it, if so good luck to them. Who knows how they'll get on?

 

[Duke of Marmalade]

A building Co in Northern Ireland is now taking Bitcoin as payment for houses. There's also a stud farm selling racehorses for Bitcoin. I have no idea whatsoever if this will boost the "thing" or not, they could all be just taking a punt on it, if so good luck to them. Who knows how they'll get on?

You can safely take it that nobody is taking bitcoin for anything (except maybe a latte). So I ask the builder in NI how much bitcoin do you want for your house, which he is, say, pricing at £200,000. So he tells me he will accept 20 BTC, which happens to be the correct exchange rate at the time of asking. I tell him I'll confirm that this afternoon. No way, says the builder, you confirm it now imediately so that I can get my £200K. Otherwise the buyer is sitting on a one way bet and with movements of 10% a day not unusual that would be a very bad place to be for the builder. On the other hand I have all the time in the world to pay £200k no matter where the BTC price goes.

 

[Duke of Marmalade]

I think the Bitcoin Community are not really grasping the central mantra of the Anti Bitcoin Community.

ABC folk like myself think blockchain technology is a good thing and will possibly find niche uses for society.

We can also see the attraction for some of a decentralised currency though personally I prefer my currency to have the guardianship of a central bank like the ECB, though Venezuelans would admittedly not be in the same position.

ABCers do not contest that the entry on the blockchain ledger has all the attributes accorded to it by the BCers.

Except one. It is not a currency. As Satoshi mused it lacks the central requirement of a currency, it has no value. So if someone shows me a figure on her Smart Phone and tells me it is bitcoin and waxes lyrical about all its wonderful technical attributes, I say "so what, what is it other than that figure you are showing me?"

 

[TheBigShort]

I think the Bitcoin Community are not really grasping the central mantra of the Anti Bitcoin Community.

'Its worth nothing', 'its hot-air', 'it will return to zero', 'it has no value', 'its a con-job', 'a ponzi scheme'...did I miss anything?

We can also see the attraction for some of a decentralised currency

Wait a second, if something holds attraction to someone, then by its very definition it holds value to that person.
So perhaps bitcoin holds no attraction to you, or Brendan, or others...but if it holds attraction to others then its not uncommon for that attraction, or value, to command a price in a market, is it?

personally I prefer my currency to have the guardianship of a central bank like the ECB,

Me too, but perhaps after all this time you have still missed one of the central points of why bitcoin was created in the first place.
Why there is still so much trust and respect afforded to this, and similar institutions, considering how the monetary system actually operates I do not know?
By any measure, the monetary system has failed on two fronts.
First, a belief that a system based on perpetual and increasing credit expansion will induce productivity growth that 'trickles down' to the less fortunate actually works.
Second, a belief that when the system crashed, that it is still the best system that just needed some (massive) repairs and that it can continue thereafter unabated.

 

[tecate]

You can safely take it that nobody is taking bitcoin for anything (except maybe a latte).

Except that's not actually true, is it? Never heard of overstock.com, expedia.com or microsoft.com? Purse.io maybe? ...no? Granted, it's at a low base and it has had a setback in terms of trying to scale. That doesn't mean to say it's not being used for anything. That's a sweeping generalisation to support your narrative.

So I ask the builder in NI how much bitcoin do you want for your house, which he is, say, pricing at £200,000. So he tells me he will accept 20 BTC, which happens to be the correct exchange rate at the time of asking. I tell him I'll confirm that this afternoon. No way, says the builder, you confirm it now imediately so that I can get my £200K. Otherwise the buyer is sitting on a one way bet and with movements of 10% a day not unusual that would be a very bad place to be for the builder. On the other hand I have all the time in the world to pay £200k no matter where the BTC price goes.

So currently, pricing will base off FIAT - so what, Duke? Big deal. If anyone holds BTC, they know that it can swing - and they accept that reality. That wouldn't stop them in buying a house or anything else. They know that it might gain or lose - but I'm sure they would be happy to book it in at the best available price at the time of signing or whatever.
Furthermore, this =>

Price speculation is something that will settle down over time

Once again, you are pulling the trigger on btc when it's not even half way towards fully evolving. I hope there are not too many regulators with your mindset as innovation in the crypto space will be truly screwed.

ABC folk like myself think blockchain technology is a good thing and will possibly find niche uses for society. We can also see the attraction for some of a decentralised currency though personally I prefer my currency to have the guardianship of a central bank like the ECB, though Venezuelans would admittedly not be in the same position.

You think it's just Venezuelans? There's a long list and it keeps changing year on year. As regards the ECB and the Euro, you think that the ECB enforce policy with Ireland in mind? Is that what we found back in 2008/9? You think that printing off paper on a whim and devaluing the pieces of paper in your wallet or the electronic euro in your bank account serves you - or any of us well? I'm not suggesting we opt out - but I accept that bitcoin (in it's current incomplete form) is imperfect. I don't think you accept the same for your precious euro.

As Satoshi mused it lacks the central requirement of a currency, it has no value.

Just in case there are any newcomers to this subject here, I will correct this. At no point did Satoshi state that Bitcoin would not succeed as a currency. He recognised certain difficulties it would face is all. The rest you are making up to suit your own narrative.

So if someone shows me a figure on her Smart Phone and tells me it is bitcoin and waxes lyrical about all its wonderful technical attributes, I say "so what, what is it other than that figure you are showing me?"

And he or she will retort - "see that piece of paper you took out of your pocket? It's exactly that - a piece of paper." Or if you whip out your phone - logged in to your AIB A/C and show him / her the Duke's euro wealth, he/she will say "so what, what is it other than that figure you are showing me?"

 

[ant dee]

So I ask the builder in NI how much bitcoin do you want for your house, which he is, say, pricing at £200,000. So he tells me he will accept 20 BTC, which happens to be the correct exchange rate at the time of asking. I tell him I'll confirm that this afternoon. No way, says the builder, you confirm it now imediately so that I can get my £200K. Otherwise the buyer is sitting on a one way bet and with movements of 10% a day not unusual that would be a very bad place to be for the builder.

Come on Duke thats not an argument, bitcoin has nothing to do with it!
Noone should take a one way bet, be it on bitcoin, horses, the weather or any currency

 

[Duke of Marmalade]

Come on Duke thats not an argument, bitcoin has nothing to do with it!
Noone should take a one way bet, be it on bitcoin, horses, the weather or any currency

Compare with the retailer in Newry who accepts euro and pounds. She genuinely does accept both currencies because she knows there are customers around who naturally use either one or the other currency. Nobody naturally uses bitcoin for transactions. The gimmick is a publicity stunt. No way is there a person in Larne, say, who now finds it more convenient to buy from the builder.

 

[Duke of Marmalade]

Wait a second, if something holds attraction to someone, then by its very definition it holds value to that person.
So perhaps bitcoin holds no attraction to you, or Brendan, or others...but if it holds attraction to others then its not uncommon for that attraction, or value, to command a price in a market, is it?

B/S read the whole of my musings, it's worth it, believe me. The following is an extract which you appear to have missed. I have added the bold to draw your attention not to promote my Worldview.

We can also see the attraction for some of a decentralised currency though personally I prefer my currency to have the guardianship of a central bank like the ECB, though Venezuelans would admittedly not be in the same position.

ABCers do not contest that the entry on the blockchain ledger has all the attributes accorded to it by the BCers.

Except one. It is not a currency.

So let me try again. A decentralised currency would have attraction for some but not me. But we do not have a decentralised currency, not until we can satisfy Satoshi's plea to give value to the entries. Arguing that they have value because they are decentralised is circular, but hey we have been here before, we are going around in circles.

 

[Duke of Marmalade]

And he or she will retort - "see that piece of paper you took out of your pocket? It's exactly that - a piece of paper." Or if you whip out your phone - logged in to your AIB A/C and show him / her the Duke's euro wealth, he/she will say "so what, what is it other than that figure you are showing me?"

That is not comparable. If you are arguing that the display of itself is worthless, well that is rather trite and I won't attempt to challenge it.

I would answer "You're from Mars aren't you? Let me explain a bit about human economics. It is centred on the acts of buying and selling goods and services. We do this with money. Society devotes great attention to managing its money, which is effectively a debt on society. Some people owe money and some people are owed money and it goes round and round. That figure is what society owes me." Bitcoins means nothing other than it is a digital entry on a blockchain.

 

[TheBigShort]

decentralised currency would have attraction for some but not me

Yes, as I already mentioned.

First of all, the title 'currency', as in cryptocurrency. I agree, it is merely a label. Labels can be stuck on anything to portray a different meaning, or imply the product or service or item is something that perhaps it is not.
I dont know of anyone who claims that bitcoin is the finished product. In fact even if you listen to the most ardent of bitcoin supporters their language tends to veer to future tense "bitcoin will revoluntionise the monetary system", "bitcoin is going to change the world"...etc...

So, as has been said to you on numerous occassions, some people can see the potential in bitcoin. You seem to be fixated that as your groceries are not priced in bitcoin, therefore it holds no value. You use the Newry trader who accepts two currencies as an example. This is a consequence of economic forces, as in both jurisdictions on this island officialdom will tell you only one currency prevails.
So the point being, it is ultimately economic forces that will dictate what we use as ocurrency. Institutions can facilitate greatly in the adoption of a particular currency, but if faith in those institutions ever erodes, then so too faith in the currency that they stand over.
So finally, going back to what you said, that you can see how cryptocurency is attractive to some...perhaps you could elaborate a bit more on that?

 

[Firefly]

And he or she will retort - "see that piece of paper you took out of your pocket? It's exactly that - a piece of paper."

Except that piece of paper is backed by the ECB which in turn is underpinned by the 2nd largest economy in the world, representing 22% of the global economy and some 500 million people....

 

[jman0war]

But we do not have a decentralised currency, not until we can satisfy Satoshi's plea to give value to the entries. Arguing that they have value because they are decentralised is circular, but hey we have been here before, we are going around in circles.

I think you misunderstood that.
Decentralization by itself has no particular value, rather it's the censorship resistance that that decentralization enables, which gives it value.

The great thing about bitcoin isn't that you are able to transfer value over a decentralized network; it's that nobody can stop you.
That nobody can say to you: you can only transfer so much, you must get my approval first (KYC, AML etc).

 

[jman0war]

Money as Debt, and the current fractional reserve system has created a rather nasty pattern of cyclic economic shocks (crashes).
Excess monetary expansion with low interest rates leads to economic bubbles that burst and wreck peoples lives.

Bitcoin provides an antidote for that.

 

[tecate]

Compare with the retailer in Newry who accepts euro and pounds. She genuinely does accept both currencies because she knows there are customers around who naturally use either one or the other currency. Nobody naturally uses bitcoin for transactions. The gimmick is a publicity stunt. No way is there a person in Larne, say, who now finds it more convenient to buy from the builder.

Just because we've always done something one way, it can never change? Really enlightening, Duke - seriously. Bitcoin is moving from a standing start. You dismiss it even though it's still evolving and still has not matured and you expect that it should be used by everyone today or if not, it's useless. I really don't share your viewpoint and I don't think it's reasonable of anyone who does.

But we do not have a decentralised currency, not until we can satisfy Satoshi's plea to give value to the entries.

Firstly, it's clear as night and day that it's decentralised. Otherwise - and you keep doing this, but don't worry, I'll keep correcting it as I don't want anyone to be misinformed - Satoshi didn't 'plea' for anything. You colour his comments with your own narrative. Satoshi identified a problem to be overcome is all. Furthermore, Bitcoin has overcome that problem as it has attained value. The only debate is whether it will keep it (and I'd say that to be successful, it doesn't have to be the current valuation - it can be a hell of a lot less...it just needs to shake the volatility).

That is not comparable. If you are arguing that the display of itself is worthless, well that is rather trite and I won't attempt to challenge it.....Bitcoins means nothing other than it is a digital entry on a blockchain.

I completely and utterly disagree. The paper in your pocket is just that - paper. The digital entry in your bank account is just a number. There is no difference between them other than FIAT has established a level of sentiment. Bitcoin attempts to do so.

Except that piece of paper is backed by the ECB which in turn is underpinned by the 2nd largest economy in the world, representing 22% of the global economy and some 500 million people....

Same point as above, Firefly. A central bank backs a FIAT currency? What meaning does that have? The gold standard was dropped by the Brits in 1931 & the Americans finally killed it off in 1971. That gave way for FIAT - which by it's very meaning - implies that it's decreed as currency by governments. Guess what - governments fail and economies fail. In any given year, there is a list of such economies.
Furthermore, government may decree it but it's still a system where sentiment dictates. The euro has had some rocky times not that long ago. Nothing is impossible. Furthermore, the electronic euro entry in your bank account can be subject to a haircut. Where was the ECB when Bank of Cyprus depositors had 47.5% of their savings wiped out? You'll recall we were pretty close to it ourselves. I recall the scramble that was going on amongst AAM'ers - searching europe for safe-haven banks to store their euro. That can't happen with a decentralised system.

The point is that be it bitcoin or euro, they are just entries and all that 'backs' them is sentiment. The only difference is that Euro is more established and matured. It would be prudent of people to withhold their judgement until cryptocurrencies have matured. Hope for some in that respect but at this point, I don't expect the Duke to climb out of his entrenched position and embrace that idea.

 

[TheBigShort]

Except that piece of paper is backed by the ECB which in turn is underpinned by the 2nd largest economy in the world, representing 22% of the global economy and some 500 million people....

And for all intents and purposes there is no need for cryptocurrencies.
Until you examine the currency of the ECB, and how in its very short lifetime bankrupted countries and saddled them with mountainous debt.
Or perhaps, as it transpires, the ECB can basically print as much of the stuff as it wants.
I cant do that, you cant do that, 500million people cant do that. So its a fallacy to assume its 'our' currency. It is not. It is merely the currency we use. Sovereignty has been ceeded. Which is fine while we piggyback the good times, but not so good in bad times.
Bitcoin, or other cryptos offer an opportunity to decentralise sovereignty to the individual.
Whether it prevails or not remains to be seen. But clearly, some people can see the value in that and therefore a market has formed.

 

[Firefly]

Same point as above, Firefly. A central bank backs a FIAT currency? What meaning does that have? The gold standard was dropped by the Brits in 1931 & the Americans finally killed it off in 1971. That gave way for FIAT - which by it's very meaning - implies that it's decreed as currency by governments. Guess what - governments fail and economies fail. In any given year, there is a list of such economies.
Furthermore, government may decree it but it's still a system where sentiment dictates. The euro has had some rocky times not that long ago. Nothing is impossible. Furthermore, the electronic euro entry in your bank account can be subject to a haircut. Where was the ECB when Bank of Cyprus depositors had 47.5% of their savings wiped out? You'll recall we were pretty close to it ourselves. I recall the scramble that was going on amongst AAM'ers - searching europe for safe-haven banks to store their euro. That can't happen with a decentralised system.

The point is that be it bitcoin or euro, they are just entries and all that 'backs' then is sentiment. The only difference is that Euro is more established and matured. It would be prudent of people to withhold their judgement until cryptocurrencies have matured. Hope for some in that respect but at this point, I don't expect the Duke to climb out of his entrenched position and embrace that idea.

All very good points, but I would be happier with euros in my bank than Bitcoins on my computer or on some exchange somewhere....