World, Writing, Wealth discussion
Wealth & Economics
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Bitcoin: is it here to stay and flourish?
Ian wrote: "I wonder if he shorted it first?"I thought the same thing - of course he didn't but... the offshore company he has registered in somewhere like the Caymans which is owned by another parent in Panama owned by another parent in Switzerland probably/possibly/maybe did
Yeah, he wouldn't be caught doing it. There's no point in having all that wealth if you can't buy yourself a little privacy :-)
I've been thinking about Bitcoin -- not about buying it, but about how it compares to the dollar. Neither has a value based on anything but faith in its value. Is the difference in the two that the dollar is backed by the govt, while Bitcoin is not? Does that make Bitcoin a risky investment? It seems that its value is, well, airy, nebulous, and iffy. What do you think?
I think there is a difference. The reserve bank (your Fed) is supposed to issue the right amount of money to keep the economy functioning. Whether it is doing this properly is another matter, but bitcoin has no known reason for however much there is - it is designed solely for speculation and for paying for white powders without being traced.
In a way I think of it like gold and other precious metals. For most of history, gold had no use other than decorative. You couldn't make a useful shield out of gold. You couldn't make a useful plow or a yoke for your ox. You're not building houses out of gold. It's only value was derived from its use in decoration, and it became a defacto currency because of its relative scarcity.At any point in time, communities might have decided they didn't need or want gold. They might have grown tired of it for use in jewelry. They might have decided bronze or iron or aluminum or whatever was preferable in ornamentation. After all, if your city was under siege for years at a time and you couldn't import metals to make more weapons, you could always melt down bracelets or necklaces or the king's scepter and crown if they were made of base metals. For most of history, gold was pretty useless, but peoples valued it regardless.
The same thing can be said of cryptocurrencies. Yes, they are based on lines of code, but those codes are difficult to generate, and that gives them a degree of scarcity. Right now, people are placing a value on owning one of those pieces of code, but at any time we could change our minds and abandon crypto as a source of value...or maybe it sticks around like gold did.
J.J. wrote: "In a way I think of it like gold and other precious metals. For most of history, gold had no use other than decorative. You couldn't make a useful shield out of gold. You couldn't make a useful plo..."An interesting comparison. It's also a natural longing to have something ultimately stable in the world of volatility, so every time people and investors too return to this otherwise not very useful metal.
BTW, the bitcoin is plummeting after the Bank of China announced it won't allow cryptocurrencies.The dollar is still a legal tender and a convertible currency and that's a big advantage, while crypto isn't that universal. I was kinda shocked when a restaurant in Germany at the time didn't want to accept a 500 euro bill. It's only later I've learnt that businesses didn't like it, since it was most frequently counterfeit.
I think crypto run wild for a while with people making and losing money on it in billions until it'll be syndicated into the system by all the big players.
As for gold, it now actually has uses. It s important for certain electronics because it is corrosion resistant and oddly enough it has use as a chemical catalyst as you get nano-sized particles. You may be amused you can dye fabric a stunning red with gold nanoparticles.
Ian wrote: "As for gold, it now actually has uses. It s important for certain electronics because it is corrosion resistant and oddly enough it has use as a chemical catalyst as you get nano-sized particles. Y..."I know, that's why I was trying to frame it in terms of ancient peoples :D
The funny thing is, value of precious metals is almost inverse to what it used to be. Platinum has been trading lower than gold for a few years now, and Palladium has been running away from gold for a few years because of increased demand in catalytic converters.
Nik wrote: "BTW, the bitcoin is plummeting after the Bank of China announced it won't allow cryptocurrencies.The dollar is still a legal tender and a convertible currency and that's a big advantage, while cry..."
That's funny. In the US, I think it's the $20 bill that's most counterfeited. The crooks are smart enough to know most people and businesses watch the larger bills more closely, but we take and spend the smaller denominations without giving much thought to counterfeits, so it's easier to pass a counterfeit if it's in a smaller denomination.
Have not used cash for nearly 12 months - except what few coins I had left to tip take-away deliveries - run out of those now.
Ian wrote: "I think there is a difference. The reserve bank (your Fed) is supposed to issue the right amount of money to keep the economy functioning. Whether it is doing this properly is another matter, but b..."Who controls Bitcoin? Who regulates it? Who actually banks it? With any government money, we know these things. I keep saying it, I have magic beans.....
Bitcoin is nice for discreet purchases, the sort which you don't want to have looked at by the alphabet agencies.https://www.cnn.com/2020/11/06/busine...
J. wrote: "Bitcoin is nice for discreet purchases, the sort which you don't want to have looked at by the alphabet agencies.https://www.cnn.com/2020/11/06/busine..."
I assume there are legitimate uses too....8^)
The blockchain technology that underpins bitcoin, etc enables distributed trusted ledgers.This is a game changing technology that enables distributed, de-centralised monetary and financial systems.
Bitcoin may not survive, but blockchain (or something like it) has, I believe, a role to play.
Papaphilly wrote: "I assume there are legitimate uses too....8^)"Let's be honest. At this point "legitimacy" has more to do with knowing/paying the right people, than legality or ethics. If I were drummed out of the Navy for smoking crack then committed perjury to buy a gun, then my mugshots would be the lead story on the evening news. Unless, of course, my daddy was a ranking politician.
Papaphilly, all I can say is you do not seem to be making the most of your magic beans. Not even your first giant slayed :-)
During the Depression era, for a few years, there was the use of "scrip" - an alternative currency, not backed by the US government. The "currency" was sometimes made of paper, but there were also "coins" made of wood, rubber, even seashells. This allowed for the local exchange of goods and services, a sort of elevated form of barter, and a precursor, it looks like, to crypto.
Interesting, glad to hear and learn something new
During the great inflation in Germany, one of the precursor groups to IG Farbenindustrie issued an "aniline currency" that could be used in its own special stores. It was successfully selling chemical products overseas, so it used some of the income to purchase goods etc to stock the stores and paid its workers in this currency, which was more or less pegged to the US dollar hence its workers, and anyone else who could somehow trade with the company could withstand the hyperinflation. Not sure how the German tax system worked in those times, though.
Barbara wrote: "During the Depression era, for a few years, there was the use of "scrip" - an alternative currency, not backed by the US government. The "currency" was sometimes made of paper, but there were also ..."I think the factories and the mills were using it in the 19th century, too, as a roundabout way of turning their employees into de facto slaves. They would pay the employees in scrip instead of hard currency, and the scrip was only good to spend in the company store or for company housing. In essence, those factories got their money back from the employees before all was said and done.
Well, that's just wrong.I heard that Colonial Pipeline paid the ransom in bitcoin. Is it truly untraceable?
And to the authors in here, you can turn your book into an NFT!https://opensea.io/assets/0x677a0b710...
I have to admit, I decided to jump down the rabbit hole myself... :D
Showing my total ignorance, what is an NFT?
Right. Non tangible Dutch tulips. Thank you.
Scout wrote: "Well, that's just wrong.I heard that Colonial Pipeline paid the ransom in bitcoin. Is it truly untraceable?"
I am betting against it being not traceable. it is electronic, it leaves a finger print and when the Government gets angry......
My football club is to become the first major sports team to sell nft tickets:https://www.binance.com/en/blog/42149...
Nik wrote: "My football club is to become the first major sports team to sell nft tickets:https://www.binance.com/en/blog/42149......"
Someone will try to forge/counterfeit them :-)
Funny how they came for drugs and found crypto instead
Nik wrote: "Funny how they came for drugs and found crypto instead"It was the electricity consumption - illegal - that gave them away
Philip wrote: "Nik wrote: "Funny how they came for drugs and found crypto instead"It was the electricity consumption - illegal - that gave them away"
They were stealing the electricity? How stupid can they be?
Stealing electricity occurs frequently in parts of SE Asia. You want to see the street wiring :-)
El Salvador looks to become the world’s first country to adopt bitcoin as legal tenderhttps://www.cnbc.com/2021/06/05/el-sa...
Indeed, J.Legal tender.
The bombing campaign begins in 4 ... 3 ... 2 ...
(Just kidding).
The key issue will arise if oil is traded in bitcoin.
Graeme wrote: "Indeed, J.Legal tender.
The bombing campaign begins in 4 ... 3 ... 2 ...
(Just kidding)."
Nah. A mixture of intelligence "leaks" and groundbreaking, in country, reporting will show that El Salvador is a Narco-State, which is using bitcoin to sell drugs.
The brave "freedom fighters" will make great strides towards a "free and secure" future for their nation when El Presidente's head suddenly explodes during a public appearance.
It's somewhat reflective in what idiotic world we live. Elon's tweets (amplified by biz and general media for all those unsubscribed) were probably the single major factor of bitcoin's value fluctuations in the course of the year. If there are enough chumps willing to do what he does no questions asked, one can make billions championing whatever junk and then dumping it at its high.That's a business Mayweather - Logan Paul in a sense :)
Funny enough (or not at all), I know see on the news that some dudes might have a grudge on good, old Elon: https://www.forbes.com/sites/daveywin...
Now if it were cash you would need a number of trucks to take that away and they would be caught. Crypto has no such requirement - a strong case for cash :-)
Ian wrote: "Now if it were cash you would need a number of trucks to take that away and they would be caught. Crypto has no such requirement - a strong case for cash :-)"Yeah, it's a semi-official rumor when Yanukovich ran to Russia it wasn't b4 a few trucks were carefully loaded with pallets of green papers, bearing pic-s of some unfamiliar dudes
Unfamiliar dudes?? I would have thought by the time you had packed a truck they would be starting to get nicely familiar. And most people recognise Benjamin :-)
Nik wrote: "Heist of a century? https://www.bloomberg.com/news/articl..."Indeed, Nik.
Whatever the future of Bitcoin and other cryptocurrencies is, one of the current issues for investors is the security of the platform and the company holding the platform.
As the article points outs, this has happened before.
Steps.
[1] Establish crypto platform and company front.
[2] Attract investors.
[3] Abscond with the money
[4] Live like billionaires (in hiding ... or perhaps with new identities...)
Personally, I don't believe cryptocurrencies as we know them today are here to stay. Cryptocurrencies do not generate cashflow or value in any way and so I don't believe they should be considered an "investment", more of a "gamble". The whole market is driven by speculation and history has shown time and time again that speculative bubbles always burst. That's not to say there won't be cryptocurrencies developed and managed by central banks and governments in the future.
If you want more detail from a different perspective, away from the social media hype, check out this book:
Cryptocurrencies: Ponzi Schemes, Bubbles and Bitcoin
Some additional grist for this mill.An accessible article on El Salvador's new bitcoin based bond.
REF: https://www.exodus.com/blog/the-bitco...
Isn't he a great guy....8^)