World, Writing, Wealth discussion
Wealth & Economics
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Bitcoin: is it here to stay and flourish?
There are a couple of things here.[1] Cryptocurrencies (including Bitcoin) will go mainstream and be co-opted by the existing monetary establishment.
[2] Blockchain technology (the important invention underneath bitcoin) will be used widely to establish trusted ledgers.
Graeme wrote: "There are a couple of things here.[1] Cryptocurrencies (including Bitcoin) will go mainstream and be co-opted by the existing monetary establishment.
[2] Blockchain technology (the important inv..."
Well may be. Before it happens though, I wouldn't be surprised if it plummeted a couple of times.. Some stern and negative announcement from any serious central bank may suffice..
My guess is blockchain technology is important and will be used widely, but it must be remembered that cryptocurrencies have absolutely nothing behind them, so anything can happen to them. I know someone will object that central bank currencies are not anchored to anything like gold, but that misses the point. All government services are paid in those currencies, all taxes have to be paid in them, and in most countries, all transactions have to be recorded for tax purposes in them. Given the governments' involvement in the economy, this does give them a weird substance.Currently, most of the transactions in Bitcoin are through "trading", aka gambling, hence the volatility. The question then arises what happens to them in a downturn, when everyone needs cash to pay their taxes? They could go a long way down. I am also far from convinced that some bright hacker won't find some way to rort the system.
Ian wrote: "I know someone will object that central bank currencies are not anchored to anything like gold, but that misses the point. All government services are paid in those currencies, all taxes have to be paid in them, and in most countries, all transactions have to be recorded for tax purposes in them. Given the governments' involvement in the economy, this does give them a weird substance..."The key point is that the current monetary system is based on a monopoly, enforced by violence. There are no legal alternatives - hence it's acceptance.
My expectation is that while the specific technologies will change, the underlying presence of monopoly and enforced usage will continue for one very good reason. The current framework for the instantiation of monetary systems supports the transfer of labour value from the many to the (powerful) few. Thus I expect the fundamental framework of control to remain in place while technologies get shifted.
I think Bitcoin is a means for the founders to get rich (because they have retained a large number of them) and they have correctly predicted a boom. The question is, will they get out before the tulip is recognised for what it is?
Graeme wrote: "The key point is that the current monetary system is based on a monopoly, enforced by violence. There are no legal alternatives - hence it's acceptance...."Love the core stuff
Like Graeme believe that cryptocurrencies might be syndicated into an existing system at some point... Current volatility and ascend remind of a gold rush and maybe those coins are a virtual gold -:)
Virtual gold can disappear in a bout of wave interference. Aaargh!
As long as you can afford to lose what goes in. I saw on TV last night a founder of bitcoin has stated he has cashed out all of them. That says something about their value at $17000 per coin.
Bitcoin is superhot again and there isn't much left to mine. Gonna appreciate enormously, plummet or fluctuate: what do you think?
Massive fluctuations. That is how the manipulators get rich at the expense of alol and sundry.
Ian wrote: "As long as you can afford to lose what goes in. I saw on TV last night a founder of bitcoin has stated he has cashed out all of them. That says something about their value at $17000 per coin."The thing is, large institutions are now buying. I suspect corps like Paypal are not the bag holders here.
The capitalization of Bitcoin vs other 'monetary instruments,' is still trivially small.
For the record I do not own any, but I'm considering acquiring a 'coin,' to diversify my investments. However I do consider such an investment speculative, and I think the key risk is 'Sovereign,.' I.e. the state could decided to outlaw bitcoin...
For those of you that want bitcoin, good luck. I see it as nothing more than as fugazi. What is backing it? mark my word, at some point, the plug will be pulled and all of that "money" will disappear along with the real money to buy in.
Papaphilly wrote: "For those of you that want bitcoin, good luck. I see it as nothing more than as fugazi. What is backing it? mark my word, at some point, the plug will be pulled and all of that "money" will disappe..."This the key risk - it is essentially an abstraction.
I keep waiting for the wizard behind the curtain to be found out.
I still don't own any - I can't bring myself to pull the trigger on it.
Money is only worth what it will buy. Since the Silk Road was shut down, what will Bitcoin buy?
I don't trust Bitcoin to hold its value. Is it FDIC insured? I bet not :-)
Scout wrote: "I don't trust Bitcoin to hold its value. Is it FDIC insured? I bet not :-)"Bitcoin is not supported by any government.
Papaphilly wrote: "Scout wrote: "I don't trust Bitcoin to hold its value. Is it FDIC insured? I bet not :-)"Bitcoin is not supported by any government."
That is both its weakness and the point.
The value of bitcoin is simply what someone else will give you for one. Any time people lose interest in it, it is valueless. However, its volatility makes it an excellent medium for gambling. It is like a portable casino, with the "miners" taking the "house charge". Casinos have no economic value either, but look at their turnover.
Or the start of another "pump and dump" campaign :-)
Bitcoin dropped 10% with 150,000,000,000 lost in 24 hours of all cryptocurrencies. OUCH
A bit tragicomic aspect: https://www.cnbc.com/2021/01/15/uk-ma... ,apparently a quarter billion USD might be sitting somewhere in the dump in Wales and another - lost locked in Frisco
Nik wrote: "A bit tragicomic aspect: https://www.cnbc.com/2021/01/15/uk-ma... ,apparently a quarter billion USD might be sitting somewhere in the ..."
Ouch
Meanwhile bitcoin is being institutionalized, first supported by Musk, now pushed further up by Mastercard: https://edition.cnn.com/2021/02/11/in...Yet, I do think it might have more ups and downs ahead
I like the comment in the link - "the mother of all bubbles". Note that Mastercard wasn't handling bitcoin - it enabled someone to convert it into ordinary currency before it transferred it.
Cryptocurrency mining consumes a sizeable chunk of world power generation. Bitcoin alone surpassed Argentina's entire consumption: https://www.bbc.com/news/technology-5...Yeah, with its price skyrocketing, it should be magically profitable. But does it make sense to you?
I gather that the CCP is entering the cryptocurrency market, offering coin at about 12 cents each. Not sure what this will do. One rumour is they will hold the value, effectively making the Yuan available also in a crypto form, but this time "guaranteed" by the Bank of China. If that happened, those wanting crypto for genuine purchases would have a government-backed currency of the second biggest economy, which would make bitcoin potentially back to its true value, which is arguably nothing. I see little value in Bitcoin, although in retrospect I regret not buying any when they were available for a dollar each.
Do not trust the whole idea. BTW, for those of you that think it cannot be traced, it is coming. At some point governments will crack down.
Newly born digital token soared to a value of 45 billion USD in 1 day:https://fortune.com/2021/05/11/intern...
Isn't it a dot com bubble raised to the power of ___?
The total "market value" of crypto is $2.48 trillion ???? They are backed by nothing (although China is apparently issuing something backed by the Bank of China that may be just a virtual equivalent of the yuan - not sure abut that one.) This reminds me of a previous tulip boom. I wonder who will win out when the bubble bursts?
I wonder about crypto too. My son talked me into buying in 2017 and it promptly lost value. Today it looks like one of the best investments in my life. It is a small amount just enough to have my hand in and watch. What will happen who knows. I love gaining but I can afford to lose what I have in if it is worthless when this crypto bubble comes to an end. Even if some of them are worth something in the end like the tech boom - they probably won't all be worth something. It's fun - don't invest more than you can afford to lose.
Bitcoin - offer to but a few years ago when rate was 1500. Today it was around 55kGoogle share offered at launch - didn't buy - how could I guess Google would be Google or Apple apple. Left the Delorean in the garage...
Ian wrote: "The total "market value" of crypto is $2.48 trillion ???? They are backed by nothing (although China is apparently issuing something backed by the Bank of China that may be just a virtual equivalen..."The guys that got out first....
Hey everyone, I have magic beans......
My two cents worth - Belynda should cash out while ahead.
I don't care for speculation because it creates hopelessly overvalued markets. Bitcoin and the like are pure speculation.Its use as a currency is mostly limited to anonymous international transactions. While that is a nice bit of utility, the CFTC does not currently recognize cocaine as a legally tradable commodity.
One tweet from Elon Musk caused a crash in the price of bitcoin and dogecoin. Because crypto is unregulated right now, it is extremely vulnerable to manipulation.Another thing I'm seeing, is because so many young people have made lots of money from this, people are creating their own crypto currency left and right, and millennials and zoomers are jumping on everything and anything that comes out thinking it will be the next BTC or ETH or DOGE. It feels like the dot com bubble of the 90s on steroids.
If you cannot hold it, it does not exist.
I have to admit, I've been thinking about the spin off to cryptos, Non Fungible Tokens (NFT). It's commonly thought that all you're buying/collecting is a bit of code, but that code points to some digital asset somewhere online.That's what has me interested. Some of you are authors, or you create other content. NFTs allow you a different way to distribute content. You could turn your book into an NFT. Instead of buying it on Amazon, someone could buy the NFT, and the NFT will direct them to where they can pick up the book. Artists are using these things as a way to distribute digital art, videos, audio files, anything that can be digitized can be distributed as an NFT.
Another interesting aspect is you can set up your NFT so that you collect a percentage of the price when someone resells the NFT you created. For example, I buy your NFT and read your book. For some reason that NFT appreciates in value and I decide to sell it for a profit, you get a cut from that sale. As long as there is a market, you could potentially generate ongoing revenue.
The downside is these things are expensive. Because of the energy and computer system requirements to code that piece of blockchain, it is not cheap to mint an NFT...that cost gets passed onto either you or the buyer.
Also, the location of the asset associated with an NFT is fixed. Once you mint the NFT, you cannot change it. If for whatever reason the site hosting the asset folds, or if it gets removed due to a copyright issue (yes, people are minting NFTs of someone else's work), the owner of the NFT is left with a blockchain code, but no asset. They're left holding a bag, and have to hope the "code" by itself is enough in demand to be able to flip it later.
I have to admit I've been wondering if the craze right now makes it worth putting up the money to convert my catalog of content into series of NFTs...
Bitcoin (and other versions) mining power requirements globally exceeded Netherlands entire energy consumptionhttps://www.bbc.co.uk/news/science-en...
Musk has allegedly stated that Tesla will not accept bitcoin for payment because of the energy consumption in mining it.
Ian wrote: "Musk has allegedly stated that Tesla will not accept bitcoin for payment because of the energy consumption in mining it."After he made his money in it. Probably shorted it before announcement. He needed an extra billion or two as Bezos has a new yacht apparently
https://www.bbc.co.uk/news/world-us-c...
Philip wrote: "Bitcoin (and other versions) mining power requirements globally exceeded Netherlands entire energy consumptionhttps://www.bbc.co.uk/news/science-en..."
Ouch
The traditional financial system and central banks still haven't expressed clear attitude in most countries.
Will bitcoin become more and more significant or will we see its demise, if confronted by the establishment?
Only now we maybe seeing an attempt of the systems/trads to cope with Uber or Airbnb in some places.
Are bitcoin's hurdles still lying ahead?