A worthwhile read for all PP'ers

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D1984
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Re: A worthwhile read for all PP'ers

Post by D1984 » Thu Oct 28, 2021 12:41 pm

vincent_c wrote:
Thu Oct 28, 2021 12:17 pm
D1984 wrote:
Thu Oct 28, 2021 11:58 am
How could I possibly be asking this question? Easy.

One, how many of the transactions in Bitcoin so far are for actual goods or services and not just speculative buying and selling of Bitcoin for short-term investment/speculation purposes? How, does this compare to the amount of goods and services bought in, say, USD each day?
A lot of transactions are financial in nature. Either for remittances or like I have been mentioning, in defi which is a nascent but fast growing thing in bitcoin.
D1984 wrote:
Thu Oct 28, 2021 11:58 am
Two, how is Bitcoin cheaper, easier, or more frictionless to use than dollars? I can pay with a contactless credit card, with my phone, with a regular debit or credit card, via Venmo or via another P2P or P2Seller type app, or with cash itself; cash is accepted pretty much everywhere and Vias/MC/Amex/Discover are accepted maybe 95% to 99% of places.....BTC not so much. If I am not trying to hide anything, am not interested in evading taxes, and I am not one of these paranoid inflation hawks who somehow thinks 4 or 5% inflation is going to lead us to become Weimar Germany, then why should I want to use Bitcoin as a way to make purchases?
It is faster when it comes to finality and settlement.

D1984 wrote:
Thu Oct 28, 2021 11:58 am

Maybe I'm just being shortsighted but when I think of ANY new technology that succeeded in the marketplace, there were two common factors involved:

1. The use case was pretty obvious, and

2. It did something better (sometimes MUCH better), more effectively, and/or cheaper than a currently existing technology.

Bitcoin meets both these criteria because it is actually a 10x improvement on cash.
1. How much remittances are in BTC vs in USD? From what I can tell BTC is still a bit player in this space.

2. Faster when it comes to finality and settlement?: ACH transfers taking three days to clear (or CC transactions taking 1-2 days to fully clear...albeit the actual purchase transaction clears in a few seconds from the user's point of view) are all simply relics of the way things were set up; if everyone in the US had accounts at the Fed transactions could clear virtually instantaneously. Doesn't Bitcoin still take around 10 minutes just to clear one transaction?

3. How is Bitcoin a 10X improvement on cash? Assuming I not a diehard anarcho-capitalist or Randroid who thinks fiat money is the root of all evil, and assuming that I am not trying to hide money from the IRS or from creditors, then what appeal should BTC have to me? What use does it have it that regular dollars can't fulfill?

I'm not saying it may not be a good investment or an intelligent speculation at some points in time...but as a good currency I still don't see it. The purpose of a currency is not to make its HOLDERS richer, it is to make its USERS (i.e. the economy as a whole) richer by making transactions easier, smoother, and more fluid to conduct. Compared to cash (or electronic forms of it) Bitcoin doesn't seem like much of an improvement in this regard.
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Re: A worthwhile read for all PP'ers

Post by vincent_c » Thu Oct 28, 2021 12:51 pm

1. I don't know but you can look into the growth rate of the lightning network's transactions - it is like something crazy like 40% week over week.

2. When the Fedcoin arrives and we can start using protocols to borrow and lend directly with a smart contract using our fedcoin then that is just taking blockchain technology and improving what cash is currently.

As of now, just because they are relics of the ways things were set up does not mean that it's not reality and so currently Bitcoin is still faster in these aspects.

I take your point that we need to compare against the future of cash and so the differentiator between BTC and the fedcoin will be that one is centralized and one is decentralized, which means that the monetary policy of the fedcoin is not going to be as deflationary as the BTC monetary policy. Ultimately it means that the fedcoin will be better short term money and BTC is still going to be the best long term store of value (we've been down that road multiple times now).

You have good points, and this is why I do not think BTC is meant to be a currency. The network effect of the USD is stronger and it has first mover advantage.

3. It depends on your perspective. You're still looking at it from the perspective of whether BTC has a 10x advantage over the USD in terms of currency. I mentioned the 10x improvement as referring to paper cash that we have today vs the blockchain technology enabling BTC.
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Re: A worthwhile read for all PP'ers

Post by pugchief » Thu Oct 28, 2021 7:56 pm

D1984 wrote:
Thu Oct 28, 2021 11:58 am

If the issue is credit card fees, then the simple solution to that is to have the government legislate to regulate the fees such that they are less than they are now (Visa and Amex--nor the actual banks issuing the cards themselves--do NOT need 2 or 3% on each transaction to make money; maybe they did back when credit cards first started back in the 1960s, but not with today's technology).
I agree with the premise that 2-3% fees are excessive for profit. If it a 'simple solution' for the government to regulate fees, why has it not already been done? Ohhh, lobbyists. Yeah, not gonna happen.
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Re: A worthwhile read for all PP'ers

Post by vnatale » Thu Oct 28, 2021 9:23 pm

pugchief wrote:
Thu Oct 28, 2021 7:56 pm

D1984 wrote:
Thu Oct 28, 2021 11:58 am


If the issue is credit card fees, then the simple solution to that is to have the government legislate to regulate the fees such that they are less than they are now (Visa and Amex--nor the actual banks issuing the cards themselves--do NOT need 2 or 3% on each transaction to make money; maybe they did back when credit cards first started back in the 1960s, but not with today's technology).



I agree with the premise that 2-3% fees are excessive for profit. If it a 'simple solution' for the government to regulate fees, why has it not already been done? Ohhh, lobbyists. Yeah, not gonna happen.


Does anyone know the answer to this one?

I have that well advertised Citibank cashback card wherein I earn 1% when I use it and than another 1% when I pay the bill...so a total of 2% every time I use it.

Therefore if Citibank is charging 2% to 3% for it's use...it is only netting 0% or 1%. Unless it is charging more than the 2% to 3%.

I've looked at a lot of merchant credit card bills and I see charges with all different rates applied to them, leading me to believe that the higher the reward the higher the merchant was charged for its customers using these higher reward cards. But, if so, why would not a card issuer offer a 5% rebate to us since it just gets passed on to the merchant?
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Re: A worthwhile read for all PP'ers

Post by vincent_c » Thu Oct 28, 2021 9:34 pm

vnatale wrote:
Thu Oct 28, 2021 9:23 pm
But, if so, why would not a card issuer offer a 5% rebate to us since it just gets passed on to the merchant?
Because merchants have choice as well.
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Re: A worthwhile read for all PP'ers

Post by vnatale » Thu Oct 28, 2021 9:53 pm

vincent_c wrote:
Thu Oct 28, 2021 9:34 pm

vnatale wrote:
Thu Oct 28, 2021 9:23 pm

But, if so, why would not a card issuer offer a 5% rebate to us since it just gets passed on to the merchant?


Because merchants have choice as well.


In what ways? Where in the process? When signing up with a bank that accepts credit card payments? Or, when a customer is going to use a certain credit card to pay the merchant's bill?

A few weeks ago I was at a restaurant and when the person I was with pulled out his American Express card to pay the bill he was informed that the restaurant did not accept American Express cards.

I've seen that...that only certain type cards will not be accepted. But I've never seen the case wherein a certain Visa or MasterCard is not accepted because it carries too high of a reward to the customer (with the corresponding cost being passed on to the merchant).
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Re: A worthwhile read for all PP'ers

Post by vincent_c » Thu Oct 28, 2021 10:22 pm

vnatale wrote:
Thu Oct 28, 2021 9:53 pm
vincent_c wrote:
Thu Oct 28, 2021 9:34 pm
vnatale wrote:
Thu Oct 28, 2021 9:23 pm
But, if so, why would not a card issuer offer a 5% rebate to us since it just gets passed on to the merchant?
Because merchants have choice as well.
In what ways? Where in the process? When signing up with a bank that accepts credit card payments? Or, when a customer is going to use a certain credit card to pay the merchant's bill?

A few weeks ago I was at a restaurant and when the person I was with pulled out his American Express card to pay the bill he was informed that the restaurant did not accept American Express cards.

I've seen that...that only certain type cards will not be accepted. But I've never seen the case wherein a certain Visa or MasterCard is not accepted because it carries too high of a reward to the customer (with the corresponding cost being passed on to the merchant).
That's exactly it.

And some places only accept Visa or Mastercard.
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Re: A worthwhile read for all PP'ers

Post by dualstow » Fri Oct 29, 2021 6:53 am

It’s not just merchant fees but the late fees of irresponsible customers (or customers who lose their income) that add up to cash back rewards.
A restaurant owner once told me that American Express sends a giant binder of rules every year and she just didn’t want to deal with it anymore.
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Re: A worthwhile read for all PP'ers

Post by bitcoininthevp » Fri Oct 29, 2021 9:41 am

vincent_c wrote:
Thu Oct 28, 2021 12:13 pm
I kept thinking that all these L1 native coins were commodities but in reality they are all trying to be money.
I think Bitcoin is trying to be money. I think others are utility tokens that people think will have value but since they are just utility (chuckecheese) tokens they wont keep value other than people transacting with them. This is essentially the An (Institutional) Investor’s Take on Cryptoassets thesis.
vincent_c wrote:
Thu Oct 28, 2021 12:13 pm
I'm not sure I understand why if bitcoin's network is used for various things how it would affect BTC (the coin). The network already has a bunch of different uses, but I suppose it boils down to the use case of securing various types of transactions.
Lets say that someone issues $100 trillion worth of real stock on the bitcoin blockchain. (note: everyone does these sort of token issuance thing on ethereum or other networks but it IS possible and was done many years via things like colored coins or counterparty) on bitcoin. Lets say the "market cap" (all value of bitcoins) is only $1 billion. Well, its likely that the incentives Bitcoin currently has of miners acting in their self interest to "secure the network" and get the block rewards each 10 minutes breaks down because miners could be bribed by someone who owns a lot of stock to "undo" 10 hrs of bitcoin transactions (which include stock transactions that could be advantageous for them to undo for some reason) for example. This would not be good for the reliability of the Bitcoin network, thus the bitcoin BTC currency would suffer, Id think.
vincent_c wrote:
Thu Oct 28, 2021 12:13 pm
I would love your take on whether you think BTC is going to dominate gold as money or if they will share the space and if so what weighting would you think they will settle as?
Dominate is strong. I think people are underestimating gold currently. But I think the long term direction, per my demographics comments (old people gold, young people bitcoin, old people die) will trend toward bitcoin attaining gold market cap parity.
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Re: A worthwhile read for all PP'ers

Post by bitcoininthevp » Fri Oct 29, 2021 10:05 am

D1984 wrote:
Thu Oct 28, 2021 11:58 am
One, how many of the transactions in Bitcoin so far are for actual goods or services and not just speculative buying and selling of Bitcoin for short-term investment/speculation purposes? How, does this compare to the amount of goods and services bought in, say, USD each day?

Two, how is Bitcoin cheaper, easier, or more frictionless to use than dollars? I can pay with a contactless credit card, with my phone, with a regular debit or credit card, via Venmo or via another P2P or P2Seller type app, or with cash itself; cash is accepted pretty much everywhere and Vias/MC/Amex/Discover are accepted maybe 95% to 99% of places.....BTC not so much. If I am not trying to hide anything, am not interested in evading taxes, and I am not one of these paranoid inflation hawks who somehow thinks 4 or 5% inflation is going to lead us to become Weimar Germany, then why should I want to use Bitcoin as a way to make purchases?

If the issue is credit card fees, then the simple solution to that is to have the government legislate to regulate the fees such that they are less than they are now (Visa and Amex--nor the actual banks issuing the cards themselves--do NOT need 2 or 3% on each transaction to make money; maybe they did back when credit cards first started back in the 1960s, but not with today's technology).
I think a useful mental framework for Bitcoin is that it is a digital store of value (a digital gold, if you will) with a clunky payments mechanism attached.

Few people are wanting to buy bitcoins just to be able to transact with them immediately. Some are, for remittances or whatnot, sure, but bitcoin isnt a cheap/fast payment network first, which is how you are approaching it. This is a useful chart of how I see Bitcoin progressing:

Image

Part of the speculation on Bitcoin is speculating that it will continue to progress along this curve (the process of becoming money).
D1984 wrote:
Thu Oct 28, 2021 11:58 am
If the issue is worries about inflation, I can just buy I-Bonds (and set up either a trust or an Arizona or Wyoming LLC if I want to buy more than $15K a year of them)....besides, I don't know about you but I'd kinda prefer my "stable store of value" not to be something that can either almost lose half its value in a few short months nor nearly double in a few months....both of which BTC has already done in 2021 alone). If OTOH I am actually looking at a truly long-term store of value (for retirement savings, say) then I'd be likely putting the money into equities or property of some kind (i.e. something that over the long term wouldn't be expected to just keep up with inflation but far surpass it) rather than either cash or Bitcoin.
You asked how Bitcoin is better than gold and I provided a starter list of how. Did you have objections there?

Sure Bitcoin is volatile. Did you really think a magic Internet money was going to go from $0.0000000 to $1,000,000 in a straight line??

But if you look at data the volatility of bitcoin is decreasing over time. And as I show in the chart above, no one is claiming bitcoin to be a unit of account TODAY.

Close your eyes and imagine a magic Internet money eventually becoming a unit of account and stable store of value. Isnt the first 11 years of bitcoin exactly how it would go?
D1984 wrote:
Thu Oct 28, 2021 11:58 am
Maybe I'm just being shortsighted but when I think of ANY new technology that succeeded in the marketplace, there were two common factors involved:

1. The use case was pretty obvious, and

2. It did something better (sometimes MUCH better), more effectively, and/or cheaper than a currently existing technology.
1. I provided a list of use cases where bitcoin excels
2. I provided a list of how bitcoin is better in many ways to gold (the existing technology)

You didn’t seem to have objections to either, but then post the exact same "concerns" again.
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Re: A worthwhile read for all PP'ers

Post by vincent_c » Fri Oct 29, 2021 10:06 am

Thanks for the explanation. Makes sense now but I don't see the problem happening in reality because how much value the BTC network can secure is something that can be determined based on its market cap. It is interesting if this risk applies to purely the total value locked in the network and not specific transactions.

I am also conservatively using a gold/btc mcap parity for my base case.
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Re: A worthwhile read for all PP'ers

Post by bitcoininthevp » Fri Oct 29, 2021 10:13 am

vincent_c wrote:
Fri Oct 29, 2021 10:06 am
how much value the BTC network can secure is something that can be determined based on its market cap
That’s just it, you can issue tokens on the bitcoin network that are NOT BTC tokens. And, in theory, the value of those issued tokens could be much larger than the native BTC tokens on the network.
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Re: A worthwhile read for all PP'ers

Post by D1984 » Fri Oct 29, 2021 1:26 pm

bitcoininthevp wrote:
Fri Oct 29, 2021 10:05 am
D1984 wrote:
Thu Oct 28, 2021 11:58 am
One, how many of the transactions in Bitcoin so far are for actual goods or services and not just speculative buying and selling of Bitcoin for short-term investment/speculation purposes? How, does this compare to the amount of goods and services bought in, say, USD each day?

Two, how is Bitcoin cheaper, easier, or more frictionless to use than dollars? I can pay with a contactless credit card, with my phone, with a regular debit or credit card, via Venmo or via another P2P or P2Seller type app, or with cash itself; cash is accepted pretty much everywhere and Vias/MC/Amex/Discover are accepted maybe 95% to 99% of places.....BTC not so much. If I am not trying to hide anything, am not interested in evading taxes, and I am not one of these paranoid inflation hawks who somehow thinks 4 or 5% inflation is going to lead us to become Weimar Germany, then why should I want to use Bitcoin as a way to make purchases?

If the issue is credit card fees, then the simple solution to that is to have the government legislate to regulate the fees such that they are less than they are now (Visa and Amex--nor the actual banks issuing the cards themselves--do NOT need 2 or 3% on each transaction to make money; maybe they did back when credit cards first started back in the 1960s, but not with today's technology).
I think a useful mental framework for Bitcoin is that it is a digital store of value (a digital gold, if you will) with a clunky payments mechanism attached.

Few people are wanting to buy bitcoins just to be able to transact with them immediately. Some are, for remittances or whatnot, sure, but bitcoin isnt a cheap/fast payment network first, which is how you are approaching it. This is a useful chart of how I see Bitcoin progressing:

Image

Part of the speculation on Bitcoin is speculating that it will continue to progress along this curve (the process of becoming money).
D1984 wrote:
Thu Oct 28, 2021 11:58 am
If the issue is worries about inflation, I can just buy I-Bonds (and set up either a trust or an Arizona or Wyoming LLC if I want to buy more than $15K a year of them)....besides, I don't know about you but I'd kinda prefer my "stable store of value" not to be something that can either almost lose half its value in a few short months nor nearly double in a few months....both of which BTC has already done in 2021 alone). If OTOH I am actually looking at a truly long-term store of value (for retirement savings, say) then I'd be likely putting the money into equities or property of some kind (i.e. something that over the long term wouldn't be expected to just keep up with inflation but far surpass it) rather than either cash or Bitcoin.
You asked how Bitcoin is better than gold and I provided a starter list of how. Did you have objections there?

Sure Bitcoin is volatile. Did you really think a magic Internet money was going to go from $0.0000000 to $1,000,000 in a straight line??

But if you look at data the volatility of bitcoin is decreasing over time. And as I show in the chart above, no one is claiming bitcoin to be a unit of account TODAY.

Close your eyes and imagine a magic Internet money eventually becoming a unit of account and stable store of value. Isnt the first 11 years of bitcoin exactly how it would go?
D1984 wrote:
Thu Oct 28, 2021 11:58 am
Maybe I'm just being shortsighted but when I think of ANY new technology that succeeded in the marketplace, there were two common factors involved:

1. The use case was pretty obvious, and

2. It did something better (sometimes MUCH better), more effectively, and/or cheaper than a currently existing technology.
1. I provided a list of use cases where bitcoin excels
2. I provided a list of how bitcoin is better in many ways to gold (the existing technology)

You didn’t seem to have objections to either, but then post the exact same "concerns" again.
My objection is that Bitcoin as a stable store of value (at least as it stands today and in the near future) kind of...well...sucks.

If I want to hold a "stable" store of value, then it needs to actually hold value and not shift around by more than, say, a few percent over a short period of time.

Let's say I wanted to put aside some money from my paycheck to pay for the following:

1. My groceries next week

2. A vacation six months from now

3. For a down payment on a home that I will be buying maybe two years from now.

I would never want to save for any of those in Bitcoin because I don't want a store of value that could conceivably lose half (or more) of its value right when (or shortly before) I need to liquidate and spend it. For much the same reason, I wouldn't save for any of the above, in, say, a triple leveraged ETF, or in oil futures, or even in relatively (compared to the leveraged ETF or the futures) "tame" stuff like an ordinary S&P 500 ETF, or gold, or long-term Treasury zeroes. Yes, with any of those I could potentially profit handsomely (as indeed I could with Bitcoin) but it's not worth the risk of a severe and sharp drawdown in the value of my savings thanks to my having chosen a too volatile and too potentially risky store of value for said savings. How does BTC beat (in terms of stability and guarantee of the return of my principal) a checking account for #1 above, a savings account/MMA/reward checking account for #2 above, and either one of the same options as #2 and/or I-Bonds for # 3 above? It doesn't.

Also, how is BTC as easy to spend as dollars? How many places accept it vs accept cash (or even accept it vs accept Visa/MC if you think "places that accept cash" isn't a fair comparison since cash is legal tender by fiat in the US while neither BTC nor Visa/MC are)? How easy is it to get a refund for goods paid for in BTC if the merchant disagrees with me and refuses to give me the refund? What recourse do I have if I pay for a good or service in BTC and the seller simply never holds up his end of the deal and never provides the good/service agreed upon? Will the US government accept BTC directly in payment of taxes?

Most of your "use cases" you mentioned were fringe (and/or illegal) things that don't apply to roughly 97-98% or more of financial transactions. I don't plan on doing things that some people have used BTC for....stuff like: paying over the Dark Web to have someone murdered, or buying stolen documents from Wikileaks, or purchasing illegal drugs or trafficked human beings, or ransomingwareing a large company and demanding payment in BTC, or evading taxes I legally owe, etc...and I'm not exactly worried about the US dollar turning into a Weimar or Zimbabwe style "100 trillion dollar bills that are only good as toilet paper" hyperinflationary clusterfuck in the next few years either.

How exactly does BTC offer "cheaper payments" than, say, cash, or ACHs, or POPMoney/P2P transfers, or bank wires (much less what would happen if everyone simply had a bank account at the Fed and could transfer money instantly to anyone else at zero cost)? Average BTC transaction fees (while as of right now at around $3 or $3.50 or so) reached above $45 or $50 earlier this year (late March though much April of 2021); furthermore, if I am reading this right--and I hope I'm not--the more people using the Bitcoin network at any given time, the higher typical average transaction fees will go (which seems to me to be exactly the wrong direction to go in; you want economies of scale to benefit a currency transaction system, not go against it). The Lightning Network may help some of this but again, if we can all have instant zero fee money transfers simply by giving everyone a current account at the Fed, then why do we need BTC (or Lightning) for transactions? How does it make them quicker or cheaper and/or more liquid than doing what I just suggested?

The one major reason I can see to hold BTC that makes sense is speculation; if BTC does ever approach (for example) gold's market cap then that implies a roughly 9.5 or 10-fold increase from its current value. This reason at least makes sense to me....but again, the whole "potential 10-bagger" thesis for investing in BTC could apply to any speculative investment (and like any other speculative investment, BTC could also lose 99 or 100% of its value rather than shoot up to a million dollars).

If your investment case for Bitcoin is that "as more people hold it, then the value will fluctuate less and less, which will drive yet more people to see it as safe and thus even more people will want to hold it, which will drive further reductions in volatility, etc, and so ad infinitum, and as such it makes sense now to get in on the ground floor while Bitcoin is still (relatively speaking) cheap" then yes, that makes sense (although to be anything close to a replacement for Dollars/Yen/Euros/etc it will end up having to fluctuate even less than, say, gold or stocks; most people don't hold their everyday spending cash or their short-term or medium-term savings in instruments like that for the very reason that they are too volatile and thus too risky)...I'm not saying that I agree with it or that it will come to pass, but at least from a rational first principles explanatory standpoint it makes sense.

Other than that...I'm sorry, I still don't see a reason to hold or to use Bitcoin when ordinary US dollars still spend just fine, thank you.

PS - Long-term deflationary currencies are a bad idea for an economy as a whole even though they may be good for any particular individual holder of said currency/currencies. A long-term stable currency (i.e. neither inflationary nor deflationary) might well be a different story but--given that BTC will only ever have 21 million coins and never more (and if I understand it correctly it's even worse than that since if someone loses a physical or digital "wallet" then those BTC are gone forever and essentially don't exist anymore)--it stands to be a long-term deflationary currency which is not something a growing economy needs.
Last edited by D1984 on Fri Oct 29, 2021 1:35 pm, edited 1 time in total.
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Re: A worthwhile read for all PP'ers

Post by vincent_c » Fri Oct 29, 2021 1:53 pm

D1984 wrote:
Fri Oct 29, 2021 1:26 pm
If your investment case for Bitcoin is that "as more people hold it, then the value will fluctuate less and less, which will drive yet more people to see it as safe and thus even more people will want to hold it, which will drive further reductions in volatility, etc, and so ad infinitum, and as such it makes sense now to get in on the ground floor while Bitcoin is still (relatively speaking) cheap" then yes, that makes sense (although to be anything close to a replacement for Dollars/Yen/Euros/etc it will end up having to fluctuate even less than, say, gold or stocks; most people don't hold their everyday spending cash or their short-term or medium-term savings in instruments like that for the very reason that they are too volatile and thus too risky)...I'm not saying that I agree with it or that it will come to pass, but at least from a rational first principles explanatory standpoint it makes sense.
You seem to get it, but at the same time don't get it. Because if you understand this then it is irrational not to use it as a long term store of value? No one ever argued that bitcoin is stable, the only argument is that it is a long term store of value meaning it protects your purchasing power.
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Re: A worthwhile read for all PP'ers

Post by bitcoininthevp » Fri Oct 29, 2021 2:04 pm

D1984 wrote:
Fri Oct 29, 2021 1:26 pm
My objection is that Bitcoin as a stable store of value (at least as it stands today and in the near future) kind of...well...sucks.
I dont think anyone is claiming bitcoin is currently a stable store of value. In fact, to the contrary, I sent a chart that had "reliable store of value" as something that would have to come in the future.
D1984 wrote:
Fri Oct 29, 2021 1:26 pm
Also, how is BTC as easy to spend as dollars?
Ive not argued that BTC is currently more widely adopted than USD or that its easier to make most merchant/vendor/etc payments in BTC.
D1984 wrote:
Fri Oct 29, 2021 1:26 pm
Most of your "use cases" you mentioned were fringe (and/or illegal) things that don't apply to roughly 97-98% or more of financial transactions.
Im not saying Bitcoin should replace 100% of daily transactions (today, anyway!), you’re again rebutting a claim I have not made. You are still very focused on Bitcoins payment capabilities as if it were trying to compete with Visa, that’s not what Bitcoin is for. Bitcoin is not (currently?) for day to day transacting, that’s not the point. Maybe Lightning will augment some of those payment features and it could be better for payments down the road.
D1984 wrote:
Fri Oct 29, 2021 1:26 pm
How exactly does BTC offer "cheaper payments" than, say, cash, or ACHs, or POPMoney/P2P transfers, or bank wires (much less what would happen if everyone simply had a bank account at the Fed and could transfer money instantly to anyone else at zero cost)? Average BTC transaction fees (while as of right now at around $3 or $3.50 or so) reached above $45 or $50 earlier this year (late March though much April of 2021); furthermore, if I am reading this right--and I hope I'm not--the more people using the Bitcoin network at any given time, the higher typical average transaction fees will go (which seems to me to be exactly the wrong direction to go in; you want economies of scale to benefit a currency transaction system, not go against it).
I noted that Bitcoin payments can be cheaper than credit card payments for certain sized payments and that it is particularly cheaper in overseas/remittance payments. I didn’t claim its always cheaper than every payment method, please stop misrepresenting my points.
D1984 wrote:
Fri Oct 29, 2021 1:26 pm
If your investment case for Bitcoin is that "as more people hold it, then the value will fluctuate less and less, which will drive yet more people to see it as safe and thus even more people will want to hold it, which will drive further reductions in volatility, etc, and so ad infinitum, and as such it makes sense now to get in on the ground floor while Bitcoin is still (relatively speaking) cheap" then yes, that makes sense (although to be anything close to a replacement for Dollars/Yen/Euros/etc it will end up having to fluctuate even less than, say, gold or stocks; most people don't hold their everyday spending cash or their short-term or medium-term savings in instruments like that for the very reason that they are too volatile and thus too risky)...I'm not saying that I agree with it or that it will come to pass, but at least from a rational first principles explanatory standpoint it makes sense.
I think the speculation that Bitcoin will be the best money is the investment thesis and part of the (long term) speculation case for it. I think dampening volatility is part of that.
D1984 wrote:
Fri Oct 29, 2021 1:26 pm
Other than that...I'm sorry, I still don't see a reason to hold or to use Bitcoin when ordinary US dollars still spend just fine, thank you.
Still with the day to day coffee payments.
vincent_c
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Re: A worthwhile read for all PP'ers

Post by vincent_c » Fri Oct 29, 2021 2:29 pm

People on this forum are obviously above average when it comes to intelligence.

The fact that we still don't have full consensus on this tells you why the opportunity is there. It's not priced correctly precisely because there is a discrepancy between what it is, and what many people think it is.

It's not hard to understand, but it is easy to misunderstand.
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Re: A worthwhile read for all PP'ers

Post by Xan » Fri Oct 29, 2021 2:39 pm

vincent_c wrote:
Fri Oct 29, 2021 2:29 pm
People on this forum are obviously above average when it comes to intelligence.

The fact that we still don't have full consensus on this tells you why the opportunity is there. It's not priced correctly precisely because there is a discrepancy between what it is, and what many people think it is.

It's not hard to understand, but it is easy to misunderstand.
Have you at least considered the possibility that you have succumbed to tulip-mania? I'm not saying you have, but you do need to deeply consider that possibility. The easiest person to fool is ourselves.

For example: if all these intelligent people DID have full consensus, you would be saying "I'm right". Now you're taking the lack of full consensus as proving you're right. Confirmation bias is a real thing.

I'm not saying you're wrong because I really have no idea. But do consider that you're blinding yourself by your 100% certain attitude and cheerleading. A lot of people have lost a lot of money doing those things.
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Re: A worthwhile read for all PP'ers

Post by vincent_c » Fri Oct 29, 2021 5:34 pm

Xan wrote:
Fri Oct 29, 2021 2:39 pm
Have you at least considered the possibility that you have succumbed to tulip-mania? I'm not saying you have, but you do need to deeply consider that possibility. The easiest person to fool is ourselves.
The reason why I engage in these discussion is so that I am constantly trying to find someone who will suggest something that perhaps I've overlooked or have not considered yet. The best way to do this is to discuss with people that do not share the same views.
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Re: A worthwhile read for all PP'ers

Post by Kriegsspiel » Fri Oct 29, 2021 7:36 pm

I bought some crypto at the end of August with some VP play money (up 24%). If I can Matthew Effect this motherfucker, then great. But even if it goes bust, it's a pretty interesting phenomenon to get into.
And as for him who lacks the courage to defend even his own soul: Let him not brag of his progressive views, boast of his status as an academician or a recognized artist, a distinguished citizen or general. Let him say to himself plainly: I am cattle, I am a coward, I seek only warmth and to eat my fill.
Solzhenitsyn, Live Not By Lies
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Re: A worthwhile read for all PP'ers

Post by seajay » Sat Oct 30, 2021 2:53 am

Bitcoin is largely unregulated, some such as Elton for instance are pumping/dumping to his advantage. Banks are accommodating it for their clients that do wish to do secret transactions but regulation will be inclined to prevent them from using that themselves. With time it is inclined to become more regulated and see greater price stability, with that will be greater inclination to short what amounts the limited supply of nothing. Presently shorts are shy due to the unlimited downside risks (short at $5,000 and if the price rose to $50,000 as it has breached).

I'd put the upside at a potential double and double again price level, $5Tn total across 21M coins. From there regulation and shorters of the limited supply of nothing 'asset' would be inclined to see it being shorted to near or actually out of existence as other 'currencies' backed by tangible assets became more favored.

A tulip bulb style speculative bubble, wide open to popping at any time, appropriate only for a small percentage of total asset allocation (trading/speculation), with a mid to longer term value potentially considerably lower than present prices, maybe $0.
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Re: A worthwhile read for all PP'ers

Post by bitcoininthevp » Sat Oct 30, 2021 7:32 am

To the tulip guys, do you distinguish between Bitcoin being in a (series of) bubble vs Bitcoin being a bubble?

For example here are a bunch of bubble pops that have happened in Bitcoin:

$30->$1
$260->$40
$1200->$200
$19k->$3k
$65k->$28k

I think even us die hard Bitcoiners think there will be another blow off top coming. Just like the ones above. And prices crash from $150k down to say $40k and bears light up with glee vindicated that it was a bubble. Only to be proven wrong that instead of Bitcoin BEING a bubble it was IN a bubble. And we repeat again, as has been the pattern.

Imagine thinking a novel digital money would increase in value in a straight linear pattern.

I dont think anything is 100% and its possible that the 6th. 7th. 8th Bitcoin bubble is the last, but it seems increasingly unlikely that is the case.

I just read Devil Take the Hindmost and its good to keep an informed perspective for sure. But I already believe Bitcoin to be in a blowing up bubble phase so its really more a curious thing to watch than anything. One could use these cycles from a trading perspective, with all of the associated risk of course.
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Re: A worthwhile read for all PP'ers

Post by I Shrugged » Sat Oct 30, 2021 9:08 am

bitcoininthevp wrote:
Sat Oct 30, 2021 7:32 am
To the tulip guys, do you distinguish between Bitcoin being in a (series of) bubble vs Bitcoin being a bubble?

For example here are a bunch of bubble pops that have happened in Bitcoin:

$30->$1
$260->$40
$1200->$200
$19k->$3k
$65k->$28k

I think even us die hard Bitcoiners think there will be another blow off top coming. Just like the ones above. And prices crash from $150k down to say $40k and bears light up with glee vindicated that it was a bubble. Only to be proven wrong that instead of Bitcoin BEING a bubble it was IN a bubble. And we repeat again, as has been the pattern.

Imagine thinking a novel digital money would increase in value in a straight linear pattern.

I dont think anything is 100% and its possible that the 6th. 7th. 8th Bitcoin bubble is the last, but it seems increasingly unlikely that is the case.

I just read Devil Take the Hindmost and its good to keep an informed perspective for sure. But I already believe Bitcoin to be in a blowing up bubble phase so its really more a curious thing to watch than anything. One could use these cycles from a trading perspective, with all of the associated risk of course.
Good question. I don't know.
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Re: A worthwhile read for all PP'ers

Post by vincent_c » Sat Oct 30, 2021 12:11 pm

What if I asked for an opinion as to whether it is still more likely to go away completely or more likely have have successive cycles regardless of scale?
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Re: A worthwhile read for all PP'ers

Post by EdwardjK » Fri Nov 12, 2021 8:17 am

I do not believe that any crypto-currency will replace gold as a store of value. I say that because I believe that most countries, including the US, will digitize their currencies and effectively negate the need for Bitcoin, et al.

This will fulfill the Progressive mandate that the Federal government be able to track every dollar you have and every dollar you spend.
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Re: A worthwhile read for all PP'ers

Post by dualstow » Fri Nov 12, 2021 8:32 am

EdwardjK wrote:
Fri Nov 12, 2021 8:17 am
I do not believe that any crypto-currency will replace gold as a store of value. I say that because I believe that most countries, including the US, will digitize their currencies and effectively negate the need for Bitcoin, et al.
..
It would be neat if the digital dollar and digital renminbi caused things like Bitcoin to calm down and just be used for commerce, as opposed to hoarding by early adopters from MIT. yes, i’m a bit jealous because, well, i didn’t hoard. O0
https://julieburchill.substack.com/p/triple-humbugs-all-round
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