Bitcoin as a complement or alternative to gold in the PP

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

Post by bitcoininthevp » Mon Mar 01, 2021 3:30 pm

vincent_c wrote:
Mon Mar 01, 2021 1:50 pm
bitcoininthevp wrote:
Mon Mar 01, 2021 1:05 pm
Well, Bitcoin is an inflation-resistant, censorship-resistant, seizure-resistant, pseudonymous digital asset.

And governments like inflating, censorship, taxation, and privacy intrusion.
I understand that bitcoin has these characteristics.

I just don't see them as a problems for the government.
Im not really sure what to say.

Government wants the exact opposite of everything bitcoin provides yet it isn't a problem for the government?
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by bitcoininthevp » Mon Mar 01, 2021 3:38 pm

Xan wrote:
Mon Mar 01, 2021 1:52 pm
bitcoininthevp wrote:
Mon Mar 01, 2021 1:05 pm
Well, Bitcoin is an inflation-resistant, censorship-resistant, seizure-resistant, pseudonymous digital asset.

And governments like inflating, censorship, taxation, and privacy intrusion.
Emphasis mine.

Pseudonymity is a major step backwards, is it not? Gold is anonymous. Cash (physical) is anonymous. What if every dollar bill had on it some identifier that was unique to you, and which once linked to you, permanently identified every transaction you had ever performed? Suppose the government proposed putting that in every dollar bill. There would be an uproar. It would never fly.
Yes, pseudonymous, was my comparison to the government liking privacy intrusion.

I think you are exaggerating the pseudonymity-is-bad point a bit. The pseudonymous-ness of bitcoin has to do with addresses, not people. Its sort of like having a bar code on the dollar (which basically it does) or on gold (not so much) So if you can get your bitcoins anonymously you have pretty good privacy.

As noted by others, even if you get your coins from a KYC exchange you can still use tech like mixers or other to re-gain some pseudonymity.

Pseudonymity is much better privacy than having full identities on the blockchain, surely?
Xan wrote:
Mon Mar 01, 2021 1:52 pm
I'm not convinced that Bitcoin isn't a plot by governments to get "money" itself to report everything everybody does. I don't understand why anybody thinks this pseduonymity is a good thing.
Actually that will be the central bank digital currencies (CBDCs). They will be fully tracked, associated with your identity, have whitelists and blacklists (probably based on whomever is in governmental power at that time), give different interest rates based on skin color, automatically deplete your balance hourly based on your wealth tax bracket, apply additional taxes if you ingest too much meat this month, etc...
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I Shrugged
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by I Shrugged » Mon Mar 01, 2021 4:07 pm

The more bad things Janet Yellen says about bitcoin, the more you should think that it is good. I don't own any but that point should be obvious as heck.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by Ugly_Bird » Mon Mar 01, 2021 4:58 pm

I Shrugged wrote:
Mon Mar 01, 2021 4:07 pm
The more bad things Janet Yellen says about bitcoin, the more you should think that it is good. I don't own any but that point should be obvious as heck.
Hah! It makes sense :-)
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by Matthew19 » Wed Mar 03, 2021 1:56 pm

bitcoininthevp wrote:
Mon Mar 01, 2021 12:39 pm
Here is a nice bitcoin log price chart to match up with the previous one.
Dude, you're a gem. Keep going.

The market is speaking, and it's saying Bitcoin.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by whatchamacallit » Thu Mar 04, 2021 10:21 am

Cool graphic story:

https://cash.app/bitcoin

Watch out below. I am contemplating the 1% allocation.

Will probably do some deep BTC in GBTC and then Robinhood or coinbase to be able to catch big swings after hours.

Thinking rebalance bands at .5% and 2%.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by bitcoininthevp » Thu Mar 04, 2021 10:29 am

whatchamacallit wrote:
Thu Mar 04, 2021 10:21 am
Cool graphic story:

https://cash.app/bitcoin

Watch out below. I am contemplating the 1% allocation.

Will probably do some deep BTC in GBTC and then Robinhood or coinbase to be able to catch big swings after hours.

Thinking rebalance bands at .5% and 2%.
GBTC is currently at negative premium, about -8%. So "could" be a good time to buy. Or the days of 20,30,40% premium are over and end of an era.

That said, you might consider the swings in GBTC and hold your coinbase coins for the long term. That way you can buy and bottom and sell at top without tax considerations (in a tax advantaged account that is!).

Some guy had a GBTC premium trading guideline but since the premium is squashed might not apply as much:
https://docs.google.com/spreadsheets/d/ ... edit#gid=0

More sophisticated plays would be buying GBTC as a discounted premium and selling spot and waiting for convergence. Cash and carry essentially. Although who knows premium could get more discounted or never return to 0 or above...
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by Ugly_Bird » Fri Mar 05, 2021 9:14 am

bitcoininthevp wrote:
Thu Mar 04, 2021 10:29 am
GBTC is currently at negative premium, about -8%. So "could" be a good time to buy. Or the days of 20,30,40% premium are over and end of an era.
I bought it right before it lost fat premium. Now it keeps eroding. How it could be 40.5 when BTC is at 48k ? Arrrh :-(
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by bitcoininthevp » Fri Mar 05, 2021 10:13 am

Ugly_Bird wrote:
Fri Mar 05, 2021 9:14 am
bitcoininthevp wrote:
Thu Mar 04, 2021 10:29 am
GBTC is currently at negative premium, about -8%. So "could" be a good time to buy. Or the days of 20,30,40% premium are over and end of an era.
I bought it right before it lost fat premium. Now it keeps eroding. How it could be 40.5 when BTC is at 48k ? Arrrh :-(
As long as GBTC and Grayscale (who uses Coinbase Custody) has the BTC, I suspect the premium will head back up towards zero at least. Could see it being slightly negative long term due to their 2% yearly fees.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by Ugly_Bird » Fri Mar 05, 2021 10:16 am

bitcoininthevp wrote:
Fri Mar 05, 2021 10:13 am
Ugly_Bird wrote:
Fri Mar 05, 2021 9:14 am
bitcoininthevp wrote:
Thu Mar 04, 2021 10:29 am
GBTC is currently at negative premium, about -8%. So "could" be a good time to buy. Or the days of 20,30,40% premium are over and end of an era.
I bought it right before it lost fat premium. Now it keeps eroding. How it could be 40.5 when BTC is at 48k ? Arrrh :-(
As long as GBTC and Grayscale (who uses Coinbase Custody) has the BTC, I suspect the premium will head back up towards zero at least. Could see it being slightly negative long term due to their 2% yearly fees.
Hopefully. It is about -16% now.
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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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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 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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