Bitcoin as a complement or alternative to gold in the PP

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whatchamacallit
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by whatchamacallit » Fri Mar 05, 2021 10:19 am

Where are you checking premium?

Article thinks loss of premium is bullish.

https://finance.yahoo.com/amphtml/news/ ... 20660.html
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bitcoininthevp
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by bitcoininthevp » Fri Mar 05, 2021 10:52 am

whatchamacallit wrote:
Fri Mar 05, 2021 10:19 am
Where are you checking premium?

Article thinks loss of premium is bullish.

https://finance.yahoo.com/amphtml/news/ ... 20660.html
You can see here (I think daily, not real time): https://ycharts.com/companies/GBTC/disc ... ium_to_nav

Or here: https://docs.google.com/spreadsheets/d/ ... edit#gid=0
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by ppnewbie » Wed Mar 10, 2021 3:28 am

How about this little gem to throw a monkey wrench into the thread. If you had bought BNB less than a year ago you would be up 17x. It’s a complete crap shoot. And JP Morgan Is full of S@&! I believe Jamie Dimon was disparaging BTC not too long ago.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by ppnewbie » Wed Mar 10, 2021 3:39 am

I am throwing my 1% black swan money into....tulips. Just kidding. I’m starting to study this space carefully because I do think the rigged financialized system is coming to an end.

Also the collar suggestion was great.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by doodle » Wed Mar 10, 2021 6:56 am

ppnewbie wrote:
Wed Mar 10, 2021 3:39 am
I am throwing my 1% black swan money into....tulips. Just kidding. I’m starting to study this space carefully because I do think the rigged financialized system is coming to an end.

Also the collar suggestion was great.
Empirically we have had stable prices and weathered two pretty severe financial crises in the last decade or so. Bitcoin due to its design and nature is a non starter as a currency. If something is going to replace our system it's going to have to be a new arrival or one of the lesser known coins...of course thats all assuming governments will stand back and let that happen...which they won't. So now this vision of the future is predicated on governmental collapse in which case I'd be buying guns and ammo rather than magic internet money.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by bitcoininthevp » Wed Mar 10, 2021 7:57 am

doodle wrote:
Wed Mar 10, 2021 6:56 am
Bitcoin due to its design and nature is a non starter as a currency.
Can you elaborate here?
doodle wrote:
Wed Mar 10, 2021 6:56 am
If something is going to replace our system it's going to have to be a new arrival or one of the lesser known coins...of course thats all assuming governments will stand back and let that happen...which they won't.
Imagine a new (non centralized) asset that would eventually become a world money. By definition it is a new asset and has no value to start. And if it is to become the worlds money it will have to eventually grow to trillions of dollars of an asset. Obviously any such asset would take a VERY volatile path to go from zero value to trillions.

Isnt what Bitcoins doing price wise exactly how such an asset would go from zero to trillions? Not in a straight line.

I do think a centralized asset or currency could start with "stable" value, say SDRs or something similar. But that is value by centralized fiat and more of what we have today. Bitcoin is decentralized.
doodle wrote:
Wed Mar 10, 2021 6:56 am
So now this vision of the future is predicated on governmental collapse in which case I'd be buying guns and ammo rather than magic internet money.
This is a strawman. Bitcoin doesn’t need governments to collapse in order to grow or sustain in value. I do think Bitcoin has many anti-government properties, but not all use cases are anti-government:
viewtopic.php?p=173490#p173490
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by Xan » Wed Mar 10, 2021 8:46 am

I would hope that any "world currency" that indelibly tracks every transaction and every participant in every transaction would be a non-starter.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by doodle » Wed Mar 10, 2021 9:03 am

Bitcoin is a non starter as a currency for a variety of reasons...a few of which are:

Efficiency....namely it is incrediblely inefficient... Kwh per transaction is absurd. How many Kwh per transaction does it use? Do you think that is sustainable?

It isn't nearly capable of handling transaction load necessary to be functioning world currency.

There is nobody to appeal to in case of error or mistake or fraud or theft or whatever. That sucks. I'd much rather be able to call my bank if I forgot my password than lose all my money.

There is no mechanism for expanding money supply so it is heavily deflationary..not to mention additional deflation caused by lost tokens which will continue to increase. This poses a huge range of problems if your goal is to extract maximum productivity out of economy.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by bitcoininthevp » Wed Mar 10, 2021 9:38 am

I think some of the concerns are bitcoin as currency vs money vs asset. Im personally thinking of bitcoin as an asset (and money in the store of value sense). I think of it like a digital gold.
doodle wrote:
Wed Mar 10, 2021 9:03 am
Efficiency....namely it is incrediblely inefficient... Kwh per transaction is absurd. How many Kwh per transaction does it use? Do you think that is sustainable?
If you compare bitcoin to gold, mining bitcoin actually consumes less resources and has less environmental impact. Check out page 10 onwards from this recent writeup:

The es­ti­mat­ed CO2 emis­sion for pro­duc­ing new gold is more than 100 mil­lion tons per year. Es­ti­mates vary, but re­cent stud­ies put Bit­coin’s around 30 mil­lion tons an­nu­al­ly. That’s less than one third of gold’s CO2 emis­sions. And as re­new­ables in­crease in the mix, Bit­coin’s CO2 emission in­ten­si­ty should drop sig­nif­i­cant­ly. Note that this is still dis­re­gard­ing the cost of re­fin­ing and stor­ing gold, as well as the neg­a­tive im­pact land ex­ca­va­tion in less com­pli­ant re­gions of the world has on both peo­ple and the en­vi­ron­ment.

https://www.seetee.io/static/shareholde ... 632722.pdf

The dollar standard and all that supports that too is costly. Remember its backed by men with guns, right?
doodle wrote:
Wed Mar 10, 2021 9:03 am
It isn't nearly capable of handling transaction load necessary to be functioning world currency.
The issued paper ("dollars") on top of gold was a sort of "layer 2" on top of gold to facilitate the ease of transactions. There are similar "layer 2" solutions on top of bitcoin. For example the Lightning Network can scale to larger-than-Visa-payment-network levels. The deadly flaw with paper issuance against gold, and part of golds downfall, was there was fractional reserve. In Lightning, the transacting is all in bitcoin so there is no opportunity to inflate or fractional reserve.

Lightning is still new, but shows promise, and there are other layer 2 networks being built on top of Bitcoin's hard money base. I suspect the payment network functionality on top of Bitcoin to grow.
doodle wrote:
Wed Mar 10, 2021 9:03 am
There is nobody to appeal to in case of error or mistake or fraud or theft or whatever. That sucks. I'd much rather be able to call my bank if I forgot my password than lose all my money.
There are bitcoin banks out there. There are also folks like Lloyd's of London insuring these banks/custodians. I suspect the ecosystem around Bitcoin's hard money to grow. Bitcoin users can opt in to such services if they would like their protections.
doodle wrote:
Wed Mar 10, 2021 9:03 am
There is no mechanism for expanding money supply so it is heavily deflationary..not to mention additional deflation caused by lost tokens which will continue to increase. This poses a huge range of problems if your goal is to extract maximum productivity out of economy.
Bitcoins hard cap is not amenable to central planning of the money supply, no. But this argument largely applies to gold as well.

There are many good articles, books, and threads on this topic on the Internet and I dont think Id do a good job articulating the arguments pro-deflationary currency here.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by bitcoininthevp » Wed Mar 10, 2021 10:01 am

One way to look at Bitcoin and its (decentralized as well as centralized) ecosystem as growing and not DONE yet.

One of the things that people don't realize in retrospect looking at the early internet today, it appears as if it was the perfect protocol and it never really had that much competition. But that's not true, even TCP/IP had plenty of competition and also plenty of criticism. Throughout the 90's, the prevailing attitude from the telecommunication providers was this will never scale to the level of voice. It can't do a quality of service. It can't do video. It can't scale to large levels and that's why, we need to continue using these legacy fiber-optic networks. Today, all of those legacy fiber-optic networks are running on top of TCP/IP. Turns out it could do voice, it could scale and it did scale. TCP/IP is a story of a protocol that was good enough and reached the scale where it achieved viral network effects and embedded itself in computer science curricula, and in hardware, and in software implementations and become so successful that now we can't even upgrade it to IPv6, because it resists its own successor.
via https://www.weusecoins.com/video-ulteri ... cumentary/

I realize this sort of defense could be applied to anything, "its just not there yet", but I hope it can be taken in a charitable way here.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by doodle » Wed Mar 10, 2021 10:20 am

I'll concede the potential it has as an asset...a store of value. In that respect it is similar to gold in many ways in that it does rely on faith and the greater fool theory. Bitcoin is entirely faith...gold does have at least some tangible value which is sure to keep it on the world scene for foreseeable future. Personally being risk adverse I prefer not to save heavily in upstart assets with very volatile and short track records....but everyone's risk tolerance is different.

As a currency, I don't see how it would ever work for many reasons I'm sure you have already heard. For that matter I don't think pinning economy to a rock is a good idea either.

My big problem with Bitcoin is mostly with the hype and exagerrated pessimistic and mistaken claims regarding our monetary system that surround it. It comes across a lot as very cultish.... to a degree at times which makes fervent gold bugs look entirely sane and rational. There is also a lot of money in Bitcoin (as I'm sure there is with metals as well) that has been driven there by the speculative fervor that the recent returns in Bitcoin have inspired and the crowd it has atracted reminds me in many ways of the those who are continuously in search of the next get rich quick and easy scheme. This isnt investing as much as jumping in on the hype train trying to make easy money. The chart of Bitcoin looks very similar to other historic bubbles....that should be worrying to anyone who is heavily invested.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by doodle » Wed Mar 10, 2021 10:33 am

I'll concede though as well that I am feeling a bit old and salty as I literally cannot understand the asset classes that I'm surrounded with today. I do not understand NFTs at all..and crypto while I do understand somewhat, I cannot understand the price movements. Combine that with covid, an insane real estate market, political turmoil and yeah...I'm feeling rather crotchety at times. Lol
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by doodle » Wed Mar 10, 2021 10:38 am

Interestingly, I think Tesla is the crypto of stocks. There is so much hype and big far reaching world shattering promises that surround it that it's hard to place a value on it. It's run-up over the last year has been insane...unfortunately for tesla it's easier to place value metrics on it and it has since retreated. In bitcoins favor those metrics don't exist.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by vincent_c » Wed Mar 10, 2021 10:40 am

A lot of you guys are focusing on issues that are no longer really debatable in crypto and arguments from 2017 that the market has already parsed and deemed as no longer presenting risks etc.

The real risk to crypto in my opinion is mining pools. These make bitcoin somewhat centralized depending on your perspective and also gives it fewer points of failure. Countries can ban mining pools which will force miners to compete themselves pricing out smaller miners and causing mining to be more centralized.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by whatchamacallit » Wed Mar 10, 2021 10:46 am

Even though I have a little in the game now.

I would love to see a mining pool take full control of bitcoin just for the fireworks if nothing else.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by doodle » Wed Mar 10, 2021 10:46 am

vincent_c wrote:
Wed Mar 10, 2021 10:40 am
A lot of you guys are focusing on issues that are no longer really debatable in crypto and arguments from 2017 that the market has already parsed and deemed as no longer presenting risks etc.
The "market" is frequently if not always wrong....especially regarding risks. Ignoring or not ignoring black swans...
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by bitcoininthevp » Wed Mar 10, 2021 10:49 am

doodle wrote:
Wed Mar 10, 2021 10:38 am
Interestingly, I think Tesla is the crypto of stocks. There is so much hype and big far reaching world shattering promises that surround it that it's hard to place a value on it. It's run-up over the last year has been insane...unfortunately for tesla it's easier to place value metrics on it and it has since retreated. In bitcoins favor those metrics don't exist.
Tesla's valuation isnt a crazy when you see that the discounted cash flow model, combined with extremely low rates, actually backs some of that valuation.

This is also why the rise in rates murdered Telsa recently. It fubar'd the DCF valuation.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by bitcoininthevp » Wed Mar 10, 2021 10:51 am

whatchamacallit wrote:
Wed Mar 10, 2021 10:46 am
Even though I have a little in the game now.

I would love to see a mining pool take full control of bitcoin just for the fireworks if nothing else.
<pedant> A mining pool has a collection of independent miners (individuals, companies) within it, contributing. If the pool tried shenanigans, the miners would point their miners/hardware at a new pool. </pendant>
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by doodle » Wed Mar 10, 2021 10:51 am

Take anonymity for example...there is no way that continues...Bitcoin will be taxed and governments will not standby as Bitcoin becomes the greatest money laundering and criminal funding invention ever.

The future will certainly be interesting...I have a feeling we are very much in the early innings.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by vincent_c » Wed Mar 10, 2021 10:53 am

doodle wrote:
Wed Mar 10, 2021 10:46 am
vincent_c wrote:
Wed Mar 10, 2021 10:40 am
A lot of you guys are focusing on issues that are no longer really debatable in crypto and arguments from 2017 that the market has already parsed and deemed as no longer presenting risks etc.
The "market" is frequently if not always wrong....especially regarding risks. Ignoring or not ignoring black swans...
Sure, you have to make a decision whether you side with the market or not, but it doesn't mean some things aren't already priced in, discounted for or not, etc.

Take the EIP 1559 for example. I believe the market is pricing in a fair probability of this upgrade happening despite the real risk of the majority of miners not yet being on board. But if you think ETH 2.0 is coming in 2-3 years and it makes sense for miners to sacrifice short term profit for the longevity of the ETH economy and their industry then it maybe in their best interest to support the upgrade.

The miners and mining pools are voting in their self interest though, so maybe some miners who don't think they will even be around in 2-3 years may want to be focused on the here and now.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by bitcoininthevp » Wed Mar 10, 2021 10:53 am

vincent_c wrote:
Wed Mar 10, 2021 10:40 am
Countries can ban mining pools which will force miners to compete themselves pricing out smaller miners and causing mining to be more centralized.
The mining pool itself doesn’t really require a physical presence, unlike the miners themselves which require machine space, machines, power supplies, big warehouses and employees. The pool is just some software on the Internet, so it would be easy to move locations or just not comply with such a ban.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by vincent_c » Wed Mar 10, 2021 10:54 am

I'm not arguing about how difficult it would be.

But if all countries banned all mining pools. They are bigger targets than the smaller miners because mining pools have to advertise their services.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by bitcoininthevp » Wed Mar 10, 2021 10:55 am

vincent_c wrote:
Wed Mar 10, 2021 10:40 am
A lot of you guys are focusing on issues that are no longer really debatable in crypto and arguments from 2017 that the market has already parsed and deemed as no longer presenting risks etc.
Keep in mind, folks in this forum are primed for bitcoin, but not necessarily familiar with the space or all of the detailed arguments, politics, etc.

I think addressing objections here with care is worth the (my) time.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by doodle » Wed Mar 10, 2021 10:56 am

bitcoininthevp wrote:
Wed Mar 10, 2021 10:49 am
doodle wrote:
Wed Mar 10, 2021 10:38 am
Interestingly, I think Tesla is the crypto of stocks. There is so much hype and big far reaching world shattering promises that surround it that it's hard to place a value on it. It's run-up over the last year has been insane...unfortunately for tesla it's easier to place value metrics on it and it has since retreated. In bitcoins favor those metrics don't exist.
Tesla's valuation isnt a crazy when you see that the discounted cash flow model, combined with extremely low rates, actually backs some of that valuation.

This is also why the rise in rates murdered Telsa recently. It fubar'd the DCF valuation.
From my perspective it's 50/50 whether tesla even survives as a viable car company. I think they are about to become overwhelmed by competition. They were the big fish in a small pond up until now, that environment is rapidly changing and the Chinese are going to be a hell of a force to contend with. Silicon valley enterprises seem soft and pudgy compared to lean and cutthroat chinese upstarts.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by vincent_c » Wed Mar 10, 2021 10:58 am

BTW I heard about YOLO money above.

If more of you guys are researching this space, one of the coins I'm in is AVAX (avalanche) and I would add this to your list to research. Technically I believe it has better technology than ADA or DOT and it's better for YOLOing.

Remember, buy first the amount you're willing to lose if your research doesn't support your thesis so you won't regret if it goes up while you're researching. It's better to lose money and then get out when your research shows you want nothing to do with the project.
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