Gyroscopic Investing

It's important to understand what a blockchain actually is: an immutable public record of exchange transactions, trackable back to both parties in the exchange. Unless the thing you've built on top of a blockchain benefits from this trackability, no value has actually been generated by doing so.

Quite ironically to the typical anarcho-capitalist crypto fan, it would actually be quite a powerful tool against money laundering should governments ever decide to back their existing fiat currencies with blockchains. There are probably also applications to copyright and contract law. But this is boring stuff that you really can't get rich quick from.

By the same token, buying illegal goods with cryptocurrencies is kind of a staggeringly bad idea.

Pointedstick wrote: ↑Fri Jun 17, 2022 3:00 pm It's important to understand what a blockchain actually is: an immutable public record of exchange transactions, trackable back to both parties in the exchange. Unless your the thing you've built on top of a blockchain benefits from this trackability, no value has actually been generated by doing so.

Quite ironically to the typical anarcho-capitalist crypto fan, it would actually be quite a powerful tool against money laundering should governments ever decide to back their existing fiat currencies with blockchains. There are probably also applications to copyright and contract law. But this is boring stuff that you really can't get rich quick from.

By the same token, buying illegal goods with cryptocurrencies is kind of a staggeringly bad idea.

Yes, I've often pointed out that touting privacy as an advantage of such coins makes virtually no sense. The entire point is that everything that happens is public.

Knocking on the door of 20K

Kbg wrote: ↑Fri Jun 17, 2022 4:33 pm Knocking on the door of 20K

On the way down or back up?

It's all 'bout narrative baby!

Through it and down today…-72% from high

Wow…down 7.5% today…18950

Some store of value.
The only thing for sure at this point is it can't go any lower than zero, so we know there's a floor.

But if you're an intrepid speculator, what better time than after a precipitous 70% crash?
The counter argument is that after a crash like that the market trust in Bitcoin might be broken irrevocably.
But I say human psychology has a moth to flame quality, and at some point the mania will return.

glennds wrote: ↑Sat Jun 18, 2022 11:36 am Some store of value.
The only thing for sure at this point is it can't go any lower than zero, so we know there's a floor.

But if you're an intrepid speculator, what better time than after a precipitous 70% crash?
The counter argument is that after a crash like that the market trust in Bitcoin might be broken irrevocably.
But I say human psychology has a moth to flame quality, and at some point the mania will return.

I'm reminded of this video:

https://youtu.be/XbZ8zDpX2Mg

We're seeing the leveraged money and speculators exit. There will be those of us that will carry the flame until the mania returns again. I will certainly be buying, but at what point? $10k seems not far off. Didn't think I'd ever get the chance to own a whole Bitcoin again.

Through all this, Bitcoin continues to do its thing. Blocks are mined, transactions are made.

As the economy melts down due to mismanagement of the money, Satoshi's message in the genesis block continues to be relevant:

The Times 03/Jan/2009 Chancellor on brink of second bailout for banks

Jack Jones wrote: ↑Sat Jun 18, 2022 6:06 pm
I'm reminded of this video:

https://youtu.be/XbZ8zDpX2Mg

We're seeing the leveraged money and speculators exit. There will be those of us that will carry the flame until the mania returns again. I will certainly be buying, but at what point? $10k seems not far off. Didn't think I'd ever get the chance to own a whole Bitcoin again.

Through all this, Bitcoin continues to do its thing. Blocks are mined, transactions are made.

As the economy melts down due to mismanagement of the money, Satoshi's message in the genesis block continues to be relevant:

The Times 03/Jan/2009 Chancellor on brink of second bailout for banks

For those that got into it at a high point, and remain committed, this is probably the time to DCA otherwise you're waiting for as much as 400% gain to get even. That's a lot of movement, even for Bitcoin. But doing it would feel like running towards an oncoming train in order to jump off the track.

glennds wrote: ↑Sat Jun 18, 2022 7:41 pm For those that got into it at a high point, and remain committed, this is probably the time to DCA otherwise you're waiting for as much as 400% gain to get even. That's a lot of movement, even for Bitcoin. But doing it would feel like running towards an oncoming train in order to jump off the track.

Agreed. Waiting around for speculations to get even is the sunk cost fallacy in action.

Kbg wrote: ↑Wed Jun 15, 2022 9:09 am

bitcoininthevp wrote: ↑Tue Jun 14, 2022 10:50 am Bitcoin was actually a pretty great monetary inflation hedge (went up a lot during money "printing" in the last years), and not a good CPI hedge, esp during tight money.

As it seems the monetary inflation has stopped and we are in tightening money mode it makes sense to me that BTC would be punished accordingly. Pain is likely to be strong for BTC, and exacerbated by the crypto worlds nuances like leverage/LUNA, until whatever we expect the Fed pivot event to be.

BC,

It was a great inflationary hedge during the money printing in the last years...except there was no inflation. So wrong.

It seems the monetary inflation has stopped and we are in tightening money mode...except there is significant inflation. So wrong x2.

Technical point...inflation is not more money in circulation, inflation is the prices of actual goods going up. As Japan has proved going on three decades now a lot of money in circulation does not equal inflation.

Inflation is such a poor word since it can mean so much. You’re right CPI didn’t inflate during "the printing". And now during the tightening (of money supply) CPI is high. But the point is the same. When the money was looser/being printed/whatever name we give it (monetary inflation seems good term) BTC did well and when the money is now tightening BTC is suffering.

Pointedstick wrote: ↑Fri Jun 17, 2022 9:38 am Regarding crypto, the problem is always that to be a good asset, something needs more to it than simply, "I think I'll be able to later sell it at a higher price than I paid for it". It needs some kind of real underlying value or collateral to provide a guideline for a reasonable price and preserve investors' faith when that price declines to keep everyone from running to the exits and dropping it to zero. Crypto has never had any of that. Unlike a stock or a corporate bond, there's no underlying productive enterprise that expands the scope of human prosperity that you're investing in. Unlike a government bond or cash, the promises made by crypto issuers are not backed by any kind of legal authority, contract enforcement power, or history of stability. Unlike gold, crypto isn't physical and "off the grid" so it's not really a good SHTF asset. Unlike real estate, there's no physical structure in the real world backstopping its value. And so on.

I think gold is the closest analog to bitcoin so Ill pull that one out. There is no intrinsic value, all value is subjective valuation of individuals. Gold is valued (by individuals) for some small % of industrial use, price history, SHTF no electricity scenarios, hold it in my hand, etc. But none of those reasons "back" gold, they are just a list of reasons some people like gold in some ways. Similarly BTC has properties that are valued (by individuals). I had a list from before so Ill paste it here:

bitcoininthevp wrote: ↑Mon Jan 07, 2019 9:49 am I cant know your situation and how Bitcoin might benefit you, but here are some examples of what people are using Bitcoin for. I am not claiming Bitcoin is a perfect solution for each of these uses cases, but that this is what people can and are using it for.

Censorship resistance. This includes individuals whose payments are typically censored, like wikileaks or online drug markets. This also includes groups or individuals who getting "deplatformed" (block by paypal or other fundraising platforms) because they have views that those platforms (or their governments) do not like.

Store of value. This includes people in countries whose currencies are inflating at a rate that makes Bitcoin's current volatility seem appealing. It also includes people in countries with lacking or no banking services available to them.

Speculation. This includes short term traders trying to trade on trends. But this also includes people that hold long term who believe Bitcoin can become money and in order to do so will appreciate drastically in value.

International payments. This includes people remitting money from overseas to their family. Also people paying for goods and services overseas can save money by using Bitcoin to transact. There are also countries where it is hard or impossible to exchange with online which would be serviced by Bitcoin.

Private payments. While Bitcoin is not completely anonymous, it can be transacted in a "more private" way. This includes individuals who value their financial privacy.

Micropayments. It is possible to transact in bitcoin using fractions of pennies. Especially using tools ontop of bitcoin (lightning network). This is applicable for pay-per-use services like an online newspaper paywall, paying realtime per minute used on a cell plan, etc. Even new use cases are opened up here like machine to machine micro transaction payments.

Tax evasion. This is for individuals who do not wish to pay the government the recommended taxes: income tax or otherwise.

Anti confiscation. This includes people that want to have value stored in something that cannot easily be stolen. Individuals crossing borders, feeling countries, etc. Asset forfeiture is applicable here. It also includes anyone fearful that their government might become a bit more invasive.

Anti inflation hedge. This includes individuals wanting to hold money that isnt inflating. As this use case becomes more appealing (bitcoin's volatility decreasing), Bitcoin will be a threat to central banks and the governments that attain part of their non-taxation funding from inflating the money supply. By eliminating the ability for governments to print money to benefit themselves, governments will have to shrink or get their funding from increasing taxes, which is harder than inflating.

Cheaper payments. Fees on Bitcoin transactions can be very low. So there is some advantage for people transacting in Bitcoin, even in the same country, where fees might be high. This might be the case when making medium/large purchase online and avoiding the ~3% credit card fee for example.

Programmable money. I give my son bitcoin that cannot be spent before the year 2050 for example. My 3 business partners and I can fund a bitcoin address such that 2 our of the 3 of us has to approve the transaction in order for it to go through. Google "smart contracts" for other examples of this.

Now this doesn’t mean that YOU should value bitcoin for these reasons or that bitcoin is backed by any of these features. But it does mean some people (incorrectly or correctly) value these features and thus value the asset (bitcoin) and network (Bitcoin) that provide it.

Aside: There is nothing to say a digital asset cannot have value. In fact many people prefer bitcoin to gold for this reason. And many arguments to be made that golds physicality was a reason it failed as the worlds money.

glennds wrote: ↑Sat Jun 18, 2022 11:36 am But if you're an intrepid speculator, what better time than after a precipitous 70% crash?
The counter argument is that after a crash like that the market trust in Bitcoin might be broken irrevocably.

it went from $30 to $1
then $270 to $40
then $1200 to $100
then $20k to $3k
now $70k to

Personally, I think lower from here even, given macro backdrop. But once the pivot comes and then YCC... rocketship.

bitcoininthevp wrote: ↑Tue Jun 14, 2022 10:50 am Inflation is such a poor word since it can mean so much. You’re right CPI didn’t inflate during "the printing". And now during the tightening (of money supply) CPI is high. But the point is the same. When the money was looser/being printed/whatever name we give it (monetary inflation seems good term) BTC did well and when the money is now tightening BTC is suffering.

Again, a classic tactic of the BTC maximalists. If you make any definition vague enough, you can confuse anyone with enough pseudo-philosophical counter points. What you're saying here boils down to "when money is easy to come by, people are more willing to use some of it* for speculation. When money isn't easy to come by, people are less willing."
*important note: it is money they believe is spendable relative to their living expenses. After extended bull markets, this belief usually turns out to be misguided due to recency bias.

Great, so you've explained how BTC can be seen as just another (speculative) financial asset. What additional insight have you provided...?

bitcoininthevp wrote: ↑Tue Jun 28, 2022 8:12 pm I think gold is the closest analog to bitcoin so Ill pull that one out. There is no intrinsic value, all value is subjective valuation of individuals. Gold is valued (by individuals) for some small % of industrial use, price history, SHTF no electricity scenarios, hold it in my hand, etc. But none of those reasons "back" gold, they are just a list of reasons some people like gold in some ways. Similarly BTC has properties that are valued (by individuals).

Now this doesn’t mean that YOU should value bitcoin for these reasons or that bitcoin is backed by any of these features. But it does mean some people (incorrectly or correctly) value these features and thus value the asset (bitcoin) and network (Bitcoin) that provide it.

Aside: There is nothing to say a digital asset cannot have value. In fact many people prefer bitcoin to gold for this reason. And many arguments to be made that golds physicality was a reason it failed as the worlds money.

You keep saying there is no intrinsic value and you keep being wrong on this point. Again, this is technically true in a philosophical sense, but we live in the real world.
"Gold is valued (by individuals) for some small % of industrial uses [...]. But none of those reasons "back gold, they are just a list of reasons some people like gold in some ways."

BUT INDUSTRIAL USES DO "BACK" GOLD. The fact of the matter is that if the price was low enough, it would be used in many more industrial cases, but it's simply valued way beyond that price point. This creates a "justified" artificial floor. You could argue that we could find enough metals and materials to totally replace any use case for gold, but again, that's simply unrealistic. You could similarly argue wheat can be totally removed as a product of food consumption, giving it an intrinsic value of $0, but why go so far for the sake of mental gymnastics? People like wheat, people use wheat. People like gold, people use gold. You're trying to manipulate people to like BTC, even when people don't use BTC. It really is that simple.

Of course a digital asset can have value. You'd have to sensibly explain it though (or better yet, have its use case be so apparent that explaining it is unnecessary). Again...BTC comes up short.

Finally:
"I think gold is the closest analog to bitcoin so Ill pull that one out."
https://twitter.com/saylor/status/15400 ... Ty0kK6novg

Apparently the gold proposition is no longer ambitious enough to entice institutions and normal people to the Great Ponzi Scheme. The bond market is way bigger! Saylor says so, and he's a genius of technology and finance. He hasn't been able to provide even modest shareholder appreciation in over 20 years despite being one of the earliest in the infant tech sector of the 1990s, but yet the problem for his company is the low return profile of the cash and bonds on his company balance sheet. It's not the company and his leadership that is the problem, it is the money they use as a hedge to their "growth". And BTC fixes that problem, apparently...
The grift knows no bounds.

I willing never stop beating this drum:
BTC was supposed to be p2p money. Technical challenges weren't met with creative solutions and this value proposition has been abandoned.
BTC was supposed to be "digital gold". It's scarcity has yet to totally distinguish it from other cryptocurrencies and there are still potential technological hurdles in the future and while this value proposition hasn't been abandoned, it is used tentatively when needed (it's very weak).
BTC was supposed to be becoming less volatile with time (many here may not know/remember, but this was a big talking point to justify it's monetary network properties, especially around 2019-2020). This value proposition has been abandoned.
BTC was supposed to be adopted by institutions. This is true to an extent, but there is no meaningful adoption above other projects to make it stand out from the larger crypto sector. And related to this...
BTC was supposed to be a pseudonymous, censorship resistant monetary network. You now have BTC maximalist celebrities trying to influence and promote government overreach in order to keep BTC's edge over other cryptocurrencies. This value proposition hasn't been abandoned, but it is being used in a way antithetical to the point of what BTC is even supposed to be.
The list goes on and on...

With no value proposition, BTC keeps ducking and dodging and pointing out the flaws in other assets.
"When something has no real world use, you can argue any fantasy world use you want."

Arthur Boe Nansa wrote: ↑Wed Jun 29, 2022 3:37 am

bitcoininthevp wrote: ↑Tue Jun 14, 2022 10:50 am Inflation is such a poor word since it can mean so much. You’re right CPI didn’t inflate during "the printing". And now during the tightening (of money supply) CPI is high. But the point is the same. When the money was looser/being printed/whatever name we give it (monetary inflation seems good term) BTC did well and when the money is now tightening BTC is suffering.

Again, a classic tactic of the BTC maximalists. If you make any definition vague enough, you can confuse anyone with enough pseudo-philosophical counter points.

I think theres a difference between "money printing" and CPI, dont you?

And it seems BTC responded well to money printing, perhaps even one of the best assets from price appreciation perspective (up ~700-1000% during the printing period). Of course other assets benefit from the printing (stocks). Harry knew stocks responded "ok" to inflation as well but still included gold in the PP for its outsized price response in the inflation regime. I dont think BTC should replace gold in the PP by any means, just pointing out to the "other stuff went up too, see!" crowds that there is still portfolio value to have the fastest inflation horse and that it may be BTC these days.

Arthur Boe Nansa wrote: ↑Wed Jun 29, 2022 3:37 am You keep saying there is no intrinsic value and you keep being wrong on this point. Again, this is technically true in a philosophical sense, but we live in the real world.
"Gold is valued (by individuals) for some small % of industrial uses [...]. But none of those reasons "back gold, they are just a list of reasons some people like gold in some ways."

BUT INDUSTRIAL USES DO "BACK" GOLD. The fact of the matter is that if the price was low enough, it would be used in many more industrial cases, but it's simply valued way beyond that price point. This creates a "justified" artificial floor. You could argue that we could find enough metals and materials to totally replace any use case for gold, but again, that's simply unrealistic.

I think its just really terminology here. Yeah those individuals that value gold for those reasons give it value (same for BTC). But those people could value gold less over time or value some other asset (same for BTC). The fact that gold could be used in some industrial usecase doesn’t mean its some intrinsic value "backing" it. Its like saying Bitcoin will always have collectible value even if it blew up, therefore it wont ever go to zero. What does this really add?

Arthur Boe Nansa wrote: ↑Wed Jun 29, 2022 3:37 am You could similarly argue wheat can be totally removed as a product of food consumption, giving it an intrinsic value of $0, but why go so far for the sake of mental gymnastics? People like wheat, people use wheat. People like gold, people use gold. You're trying to manipulate people to like BTC, even when people don't use BTC. It really is that simple.

Yes if individuals stopped valuing wheat worldwide, the price would go down. And if some new energy could be derived from wheat price would go up since people value energy. Im not sure why the same cant be applied to Bitcoin. Its really that simple. You just dont seem to like it and pull out "justified" or other emotional or moral terms when humans subjectively value a digital asset.

Arthur Boe Nansa wrote: ↑Wed Jun 29, 2022 3:37 am Of course a digital asset can have value. You'd have to sensibly explain it though (or better yet, have its use case be so apparent that explaining it is unnecessary). Again...BTC comes up short.

Bitcoin has the properties of a digital gold. That’s a simple enough explanation IMHO. That doesn’t mean humans trade this new asset like gold.

Arthur Boe Nansa wrote: ↑Wed Jun 29, 2022 3:37 am With no value proposition, BTC keeps ducking and dodging and pointing out the flaws in other assets.

Seems the financial equivalent of "Nobody goes there anymore. It’s too crowded." ->

"Look bitcoin has no value/adoption/uses!" as price continues to (cyclically) go up!

Arthur Boe Nansa wrote: ↑Wed Jun 29, 2022 3:37 am I willing never stop beating this drum:
BTC was supposed to be p2p money. Technical challenges weren't met with creative solutions and this value proposition has been abandoned.
BTC was supposed to be "digital gold". It's scarcity has yet to totally distinguish it from other cryptocurrencies and there are still potential technological hurdles in the future and while this value proposition hasn't been abandoned, it is used tentatively when needed (it's very weak).
BTC was supposed to be becoming less volatile with time (many here may not know/remember, but this was a big talking point to justify it's monetary network properties, especially around 2019-2020). This value proposition has been abandoned.
BTC was supposed to be adopted by institutions. This is true to an extent, but there is no meaningful adoption above other projects to make it stand out from the larger crypto sector. And related to this...
BTC was supposed to be a pseudonymous, censorship resistant monetary network. You now have BTC maximalist celebrities trying to influence and promote government overreach in order to keep BTC's edge over other cryptocurrencies. This value proposition hasn't been abandoned, but it is being used in a way antithetical to the point of what BTC is even supposed to be.

Interestingly, Bitcoin doesn't know anything about this. It doesn't even know anything about money. It keeps on doing its mundane task of filling blocks with transactions every ten minutes or so, unaware of the turmoil in the real world. It makes (difficulty) adjustments to the goings on in the human realm, but it is largely oblivious to all of this.

At this point, I think it's best to consider it a phenomena. What it was originally, or what its creator hoped for it, or what it was supposed to be is largely irrelevant. What matters is if and how we will use this tool.

You're trying to manipulate people to like BTC, even when people don't use BTC.

I started using Bitcoin in 2013, and continue to do so.

bitcoininthevp wrote: ↑Tue Jun 28, 2022 8:12 pm I think gold is the closest analog to bitcoin so Ill pull that one out. There is no intrinsic value, all value is subjective valuation of individuals. Gold is valued (by individuals) for some small % of industrial use, price history, SHTF no electricity scenarios, hold it in my hand, etc. But none of those reasons "back" gold, they are just a list of reasons some people like gold in some ways.

I could nitpick, but I think ultimately you're right, and it's the reason why I don't own gold anymore.

bitcoininthevp wrote: ↑Tue Jun 28, 2022 8:12 pm Similarly BTC has properties that are valued (by individuals). I had a list from before so Ill paste it here:

I think it's quite naive to expect cryptocurrencies to have value for anything privacy-related. The whole point is that all transactions are 100% trackable. It just doesn't make any sense at all to list "censorship resistance," "tax evasion," or "anti confiscation" as advantages of cryptocurrencies. Compared to other speculative assets or media of exchange, cryptocurrencies are just as vulnerable or more so to these outcomes, technologically speaking.

bitcoininthevp wrote: ↑Tue Jun 28, 2022 8:12 pm And many arguments to be made that golds physicality was a reason it failed as the worlds money.

I think Gold failed as the world's money because its supply wasn't elastic enough to match the demand for money either in the marketplace where goods and services available for purchase increase at a relatively high rate, or by governments which often want or need to create extra money to goose their purchasing power for specific ends or to avoid public discontent. This lack of elasticity is mostly seen by its proponents as a feature, not a bug, because they think deflation is better than inflation and disapprove of government spending. But there aren't enough of those people to keep it going.

Pointedstick wrote: ↑Wed Jun 29, 2022 10:00 am

bitcoininthevp wrote: ↑Tue Jun 28, 2022 8:12 pm Similarly BTC has properties that are valued (by individuals). I had a list from before so Ill paste it here:

I think it's quite naive to expect cryptocurrencies to have value for anything privacy-related. The whole point is that all transactions are 100% trackable. It just doesn't make any sense at all to list "censorship resistance," "tax evasion," or "anti confiscation" as advantages of cryptocurrencies. Compared to other speculative assets or media of exchange, cryptocurrencies are just as vulnerable or more so to these outcomes, technologically speaking.

Even with Bitcoin's current open ledger there are many current privacy techniques:

bitcoininthevp wrote: ↑Thu Oct 21, 2021 11:53 am You can meet in an alley and exchange dollar bills for a gold coin, yes. You can also meet in an alley and exchange dollars for bitcoins. There is a public transaction on the bitcoin blockchain, yes, but that doesn’t give up privacy entirely. Sure, your counterparty could taddle on you, but that’s the same case with the in person gold transaction as well (maybe they have video evidences).

Additionally there are ways of exchanging bitcoins physically, with no on chain fingerprint, with something like opendimes.

Additionally you could use localbitcoins or Bisq to facilitate a buying or selling of bitcoins (uses an escrow) with varying payment methods and traceability.

Additionally there is a technique of joining a bunch of bitcoin transactions together, called a coinjoin, to obfuscate coin origins and attain more privacy. This can be done without some central party taking control of your coins at any point. And no KYC.

Additionally there are centralized mixing services, though I wouldn't recommend that.

Additionally, I could turn my dollar bills into USD equivalents (stablecoins) and then use a decentralized exchange, that doesn’t need my KYC info, to purchase coins.

Additionally I could swap "my" bitcoins with an equivalent amount of someone elses bitcoins in a process known as a coinswap.

Additionally, similar to the coinswap (within the same chain/currency), I would swap my BTC with LTC in a cross chain atomic swap (swapping between chains). This can be done without anyone knowing of anyones identity.

Additionally you could buy bitcoin and not have an blockchain fingerprint. For example I buy bitcoins in the alley and someone sends me bitcoins on the lightning network which doesn’t have a record kept forever like the blockchain.

None of these is fool proof and there are considerations (legal, privacy, trust, physical security, etc) for each. But it’s the same with alley gold.

And evolving techniques as well:

bitcoininthevp wrote: ↑Thu Oct 06, 2016 4:52 pm I think fungibility is the biggest concern and should be the biggest effort in the coming years.

Coinjoin, MimbleWimble, Confidential Transactions, Ring Sigs, Zerocash.

All ideas being tossed around to solve the fungibility problem. There is hope on this front.

Also, without wading too deep into non-Bitcoin blockchains, Monero offers a high degree of privacy as you cannot see amounts in transactions or senders or receivers.

Id add that anti confiscation and censorship resistance are a bit tangential to privacy.

Yeah, I think privacy for gold isn't really a thing either. Nobody buys or sells krugerrands in an alley unless they have a death wish. If the best cryptocurrencies can muster is "well, if you use exotic means to jump through a bunch of risky hoops, it's at least theoretically no worse than gold", that isn't exactly a ringing endorsement IMO. It's time to face facts: financial privacy is largely dead. And it's super duper dead on the internet. This ship sailed years and years ago.

bitcoininthevp wrote: ↑Wed Jun 29, 2022 6:09 am I think theres a difference between "money printing" and CPI, dont you?

And it seems BTC responded well to money printing, perhaps even one of the best assets from price appreciation perspective (up ~700-1000% during the printing period). Of course other assets benefit from the printing (stocks). Harry knew stocks responded "ok" to inflation as well but still included gold in the PP for its outsized price response in the inflation regime. I dont think BTC should replace gold in the PP by any means, just pointing out to the "other stuff went up too, see!" crowds that there is still portfolio value to have the fastest inflation horse and that it may be BTC these days.

Definitely. I wasn't referring to money printing and CPI, I was referring "Inflation is such a poor word since it can mean so much." I've seen many, many bad takes regarding inflation the past year and lately it's been thrown around so casually to explain a great many things (sometimes well, oftentimes not).

Everything responded well to money printing. Throw in a dash of "this is a surefire way to create generational wealth" and you have a great recipe to inflate an asset (inflate in the sense of a bubble). Stocks respond "ok" to inflation because the products they produce are tied to the economy being inflated. In that sense they're somewhat joined at the hip. Academic research supports this (to an extent).

Regarding BTC's performance... as an asset CLASS it did exceptionally well. When the printing was actually happening (for months, I might add), BTC dominance actually went down:
Note that the money printing really occurred from January to July of 2020. More interestingly, in August Michael Saylor started buying for MicroStrategy (pointed out in the graphs). A few months later is when the marketing and headlines really started enticing retail. Sure the money printing continued, but not close to the same rate. It seems the real catalyst to BTC's rise (especially relative to other cryptocurrencies and projects) is simply Michael Saylor and other influencers promoting it so heavily. Once VCs, trading firms, and "the common man" realized they can spin up their own blockchain/company/NFT/whatever to leverage the hype for their own benefit, the market became saturated with cash grabs and low effort projects and this is clearly seen in the drop in BTC dominance in 2021.

bitcoininthevp wrote: ↑Wed Jun 29, 2022 6:09 am I think its just really terminology here. Yeah those individuals that value gold for those reasons give it value (same for BTC). But those people could value gold less over time or value some other asset (same for BTC). The fact that gold could be used in some industrial usecase doesn’t mean its some intrinsic value "backing" it. Its like saying Bitcoin will always have collectible value even if it blew up, therefore it wont ever go to zero. What does this really add?


Yes if individuals stopped valuing wheat worldwide, the price would go down. And if some new energy could be derived from wheat price would go up since people value energy. Im not sure why the same cant be applied to Bitcoin. Its really that simple. You just dont seem to like it and pull out "justified" or other emotional or moral terms when humans subjectively value a digital asset.

No. For practical purposes, it does mean it has value backing it. That's the point of what "backing" even means. If you keep abstracting the conversational points you can say nothing has backing and make the discussion of backing (or anything else) totally moot. Is your financial wellbeing "backed"? Is your love for family and friends "backed"? If not, are any of those things even "real"? We can talk philosophy in a different thread, but at some point a line has to be drawn.

I'm talking about the here and now. Of course relative value for things can fluctuate. They do all the time and that's what free markets are for. I'm not saying wheat can't have it's value go down. I am saying that certain talking points are disingenuous at best, outright deceitful at worst. I have a problem when people say "but wheat, 100% of the time, ends up going bad so it shouldn't be considered. But this Digital Wheat. This NEVER goes bad. It's perfect wheat. It's supply limited wheat. Buy this Digital Wheat!"
Then someone comes along and goes "I made this Digital Rye!" and those who already have the Digital Wheat come around, bully that person and say "Digital grains can only be made once! Only Digital Wheat!"

What can't be applied the same to Bitcoin? I have no problem with Bitcoin. I have a problem with what people say Bitcoin is and does. The two things are very different. I have no problem with Bitcoin the same way I have no problem with art or lottery tickets. But at least those things are (somewhat) honest. I will call out the scummy art dealer in the same i'll call out the scummy crypto enabler. As I said before, almost none of the talking points used to legitimize Bitcoin have actually panned out. If people want to speculate they're welcome to. Saying it's the ultimate monetary network (an extraordinary claim with huge ramifications) requires extraordinary evidence.

bitcoininthevp wrote: ↑Wed Jun 29, 2022 6:09 am Bitcoin has the properties of a digital gold. That’s a simple enough explanation IMHO. That doesn’t mean humans trade this new asset like gold.


Seems the financial equivalent of "Nobody goes there anymore. It’s too crowded." ->

"Look bitcoin has no value/adoption/uses!" as price continues to (cyclically) go up!

"So it's like a digital version of thing X. But that doesn't mean it should trade like thing X."
What?

Correct. Something can have no value/adoption/uses! and still have its price go up.
Not even cyclical. Up only! If anyone wants in on the Madoff strategy let me know, I can arrange something...

Jack Jones wrote: ↑Wed Jun 29, 2022 8:56 am
Interestingly, Bitcoin doesn't know anything about this. It doesn't even know anything about money. It keeps on doing its mundane task of filling blocks with transactions every ten minutes or so, unaware of the turmoil in the real world. It makes (difficulty) adjustments to the goings on in the human realm, but it is largely oblivious to all of this.

At this point, I think it's best to consider it a phenomena. What it was originally, or what its creator hoped for it, or what it was supposed to be is largely irrelevant. What matters is if and how we will use this tool.

I started using Bitcoin in 2013, and continue to do so.

I can respect this position. I don't agree with it, but to each their own.
Can I ask in what way you "use" Bitcoin? You must have changed attitude in how you use it? Or maybe not?
On chain? Lightning Network? etc.
I'm interested (not facetious. I know of few people who really use BTC and i'm wondering what's the same/different in your "use" of it over the years).

Pointedstick wrote: ↑Wed Jun 29, 2022 10:00 am I could nitpick, but I think ultimately you're right, and it's the reason why I don't own gold anymore.

I think it's quite naive to expect cryptocurrencies to have value for anything privacy-related. The whole point is that all transactions are 100% trackable. It just doesn't make any sense at all to list "censorship resistance," "tax evasion," or "anti confiscation" as advantages of cryptocurrencies. Compared to other speculative assets or media of exchange, cryptocurrencies are just as vulnerable or more so to these outcomes, technologically speaking.

I think Gold failed as the world's money because its supply wasn't elastic enough to match the demand for money either in the marketplace where goods and services available for purchase increase at a relatively high rate, or by governments which often want or need to create extra money to goose their purchasing power for specific ends or to avoid public discontent. This lack of elasticity is mostly seen by its proponents as a feature, not a bug, because they think deflation is better than inflation and disapprove of government spending. But there aren't enough of those people to keep it going.

PS, do you own Bitcoin? If that's your line of reasoning then BTC must have no value either, no?

Regarding privacy-related use cases i'd disagree. A lot of good work is being done on that front, it just isn't getting the attention it deserves...

And regarding your statements about gold failing as the world's money for not being elastic enough, what do you make of Russia now backing the Ruble and a certain shift in geopolitical economics favoring harder (or at least semi backed) currencies? Whether direct or indirect, metals and materials are being looked at more seriously lately.

And what are your general parameters for "elastic enough"? I think people/nations were so hungry for growth that they simply wanted no restraints whatsoever. Short term that always feels like a step in the right direction, long term it allows for the unrestrained excess we see now that always seems to blow up spectacularly.

You always have an interesting perspective, it'd be great to hear more of your thoughts (and it's great to see you posting more!).

Arthur Boe Nansa wrote: ↑Wed Jun 29, 2022 2:32 pm No. For practical purposes, it does mean it has value backing it. That's the point of what "backing" even means. If you keep abstracting the conversational points you can say nothing has backing and make the discussion of backing (or anything else) totally moot. Is your financial wellbeing "backed"? Is your love for family and friends "backed"? If not, are any of those things even "real"? We can talk philosophy in a different thread, but at some point a line has to be drawn.

Im not even sure there is a disagreement here but my opinion is that all value is subjective and that there is no intrinsic value. I also think digital things can be subjectively valued.

Arthur Boe Nansa wrote: ↑Wed Jun 29, 2022 2:32 pm I have a problem with what people say Bitcoin is and does. The two things are very different. I have no problem with Bitcoin the same way I have no problem with art or lottery tickets. But at least those things are (somewhat) honest. I will call out the scummy art dealer in the same i'll call out the scummy crypto enabler. As I said before, almost none of the talking points used to legitimize Bitcoin have actually panned out. If people want to speculate they're welcome to. Saying it's the ultimate monetary network (an extraordinary claim with huge ramifications) requires extraordinary evidence.

Bitcoin is not the thing that one person happens to say it is at a certain point of time. Im not sure what Satoshi or Greg Maxwell said about it in 2010 that bugs you, but actual Bitcoin itself seems to have mostly stayed the same thing since. I think that hard-to-change-ness a good thing and something Id want in an emerging money. I think I mentioned this to you before but I think there are a bunch of individuals saying things they think about Bitcoin over time and sometimes they are right and sometimes wrong. Im not sure there is broad malice or a narrative conspiracy.

Arthur Boe Nansa wrote: ↑Wed Jun 29, 2022 2:32 pm

bitcoininthevp wrote: ↑Wed Jun 29, 2022 6:09 am Bitcoin has the properties of a digital gold. That’s a simple enough explanation IMHO. That doesn’t mean humans trade this new asset like gold.

Seems the financial equivalent of "Nobody goes there anymore. It’s too crowded." ->

"Look bitcoin has no value/adoption/uses!" as price continues to (cyclically) go up!

"So it's like a digital version of thing X. But that doesn't mean it should trade like thing X."
What?

The "digital gold" label is just a simple way to get across what Bitcoin is for new people. I think it works well. But that doesn’t mean gold and "digital gold" (Bitcoin) trade the same.

Arthur Boe Nansa wrote: ↑Wed Jun 29, 2022 2:32 pm Correct. Something can have no value/adoption/uses! and still have its price go up.

We are back to value again. Why would some individual buy something that provides no value to themselves? They could be wrong of course, but they would not act if they didn’t perceive some value. For BTC sometimes that’s circumventing capital controls or playing with the tech, sometimes betting on BTC being the future of money, or sometimes pure speculation based on TA or whatever.

Arthur Boe Nansa wrote: ↑Wed Jun 29, 2022 2:32 pm PS, do you own Bitcoin? If that's your line of reasoning then BTC must have no value either, no?

I don't own any Bitcoins, or any cryptocurrencies. I did years ago, and even accepted payment in Bitcoins back when I was running a small business.

Ultimately I lost faith in the concept of cryptocurrencies as stable media of exchange. I find them to be just too volatile to work as currency, in all possible ways: their exchange value vs government currencies; the underlying technology; the trustworthiness of their issuers and the forms that bridge the cap between cryptocurrencies and government currencies; the sheer number of cryptocurrencies; I could go on. And if they're no good as media of exchange, that only leave them as investment products. In this respect, I find cryptocurrencies wanting as there is no real underlying asset they represent. As I brought up earlier, lots of other assets we're familiar with do represent the value of some underlying real asset: the future productivity of a firm, a promise of future payment by a trustworthy institution with taxing and police power, a physical building, and so on. Cryptocurrencies don't have any of that; it's all just "what someone else thinks it's worth", and this makes them super-volatile and unpredictable when treated as investments.

So in answer to your original question, if I can't trust cryptocurrencies as currencies, and I can't trust them as investments, then no, they have no value to me.

Arthur Boe Nansa wrote: ↑Wed Jun 29, 2022 2:32 pm Regarding privacy-related use cases i'd disagree. A lot of good work is being done on that front, it just isn't getting the attention it deserves...

One thing I've learned over time is to not fight against the nature of what a thing is; instead either embrace it or abandon it. Cryptocurrencies are inherently and according to their nature anti-financial-privacy. Anyone who tries to fight against this eventually fails, because it's swimming upstream without being a salmon. I don't need to know about any of those pro-privacy-in-cryptocurrency projects to know that they're doomed to fail. You just can't fight against what a thing is, and try to turn it into something it isn't. It doesn't work.

Arthur Boe Nansa wrote: ↑Wed Jun 29, 2022 2:32 pm And regarding your statements about gold failing as the world's money for not being elastic enough, what do you make of Russia now backing the Ruble and a certain shift in geopolitical economics favoring harder (or at least semi backed) currencies? Whether direct or indirect, metals and materials are being looked at more seriously lately.

I don't see any real trend toward governments turning back to precious-metal-backed currencies. Where do you see this? Regarding Russia specifically, it's clearly a desperation move caused by being ostracized in the world of international finance, and I don't think it amounts to a hill of beans. In general, Russia is a weak country that doesn't matter. They're economically weak, diplomatically weak, culturally weak, and they've even revealed themselves to be militarily weak, embarrassingly unable to win a land war against a much smaller neighbor despite massive on-paper military advantages and favorable geography. Russia simply doesn't need to be taken seriously about much of anything, IMO.

Arthur Boe Nansa wrote: ↑Wed Jun 29, 2022 2:32 pm And what are your general parameters for "elastic enough"? I think people/nations were so hungry for growth that they simply wanted no restraints whatsoever. Short term that always feels like a step in the right direction, long term it allows for the unrestrained excess we see now that always seems to blow up spectacularly.

Regardless of what we do or don't believe, it's what people want that ultimately matters, and the governments and economies of the world want money supplies that are very elastic. Governments want this so they can do fiscal stimulus at will and finance large expensive projects. Economies want it to ensure that the supply of money in circulation at least keeps up with the supply of goods and services to prevent deflation, because deflation is ruinous to the indebted and modern economies run on debt. I get that you don't approve of this, but honestly our opinions on the subject simply don't matter. The governments and economies of the world have spoken, at least for now.

Arthur Boe Nansa wrote: ↑Wed Jun 29, 2022 2:32 pm You always have an interesting perspective, it'd be great to hear more of your thoughts (and it's great to see you posting more!).

Thanks!

Pointedstick wrote: ↑Thu Jun 30, 2022 12:38 pm So in answer to your original question, if I can't trust cryptocurrencies as currencies, and I can't trust them as investments, then no, they have no value to me.

Once I get my investments in order, I'll most likely figure out how to buy 1 BTC, as a very expensive lotto ticket.

Arthur Boe Nansa wrote: ↑Wed Jun 29, 2022 2:32 pm

Jack Jones wrote: ↑Wed Jun 29, 2022 8:56 am I started using Bitcoin in 2013, and continue to do so.

I can respect this position. I don't agree with it, but to each their own.
Can I ask in what way you "use" Bitcoin? You must have changed attitude in how you use it? Or maybe not?
On chain? Lightning Network? etc.
I'm interested (not facetious. I know of few people who really use BTC and i'm wondering what's the same/different in your "use" of it over the years).

Yes, I have changed attitude in how I use it. I used to spend it, but now I treat it similarly to gold. However, unlike gold, I hope to spend it again someday.

joypog wrote: ↑Thu Jun 30, 2022 2:06 pm Once I get my investments in order, I'll most likely figure out how to buy 1 BTC, as a very expensive lotto ticket.

I seriously doubted I'd ever own 1 BTC again, but it's looking more likely!

joypog wrote: ↑Thu Jun 30, 2022 2:06 pm

Pointedstick wrote: ↑Thu Jun 30, 2022 12:38 pm So in answer to your original question, if I can't trust cryptocurrencies as currencies, and I can't trust them as investments, then no, they have no value to me.

Once I get my investments in order, I'll most likely figure out how to buy 1 BTC, as a very expensive lotto ticket.

Don't, just buy actual lotto tickets. (I'm serious. With a lotto ticket at least if you do get lucky you know what the return is going to be.)