Society/Culture Bitcoin

[nut]

Are cryptocurrencies the biggest threat to the current financial system?

BRICS bank was seen as a threat to the power of the US dollar but it seems now Bitcoin and the likes are fast becoming so powerful it might bring down the US dollar and hence cause more world instability.

No I don't own any bitcoin but following its rise at the moment.

 

[Old M8]

I don't think so, personally. I can't see why they can't exist side by side.

I see it as the alternative to gold. If Greece ever hits trouble again, watch people pile into bitcoin.

If it ever poses a threat to the US dollar watch it become regulated/outlawed.

 

[woota]

I don't think so, personally. I can't see why they can't exist side by side.

I see it as the alternative to gold. If Greece ever hits trouble again, watch people pile into bitcoin.

If it ever poses a threat to the US dollar watch it become regulated/outlawed.

The problem for bitcoin and bitcoin holders is that banks don't like bitcoin because it threatens to ruin their monopoly over the store of wealth. As I've said before, it's analogous to the Uber versus Taxi debate. Taxi drivers were in outrage when Uber entered the market, because it created competition for the Taxi industry and ended their monopoly over the "on-demand public transport" market, thus driving down the value of Taxi plates. It was a case of a new business model that took advantage of modern technology offering a superior service to the old, archaic taxi industry that hadn't changed in years. Taxis are now becoming redundant in many parts of the world as more and more people favor Uber and other ride-sharing services over traditional Taxis. A similar thing will occur with fiat currency versus cryptocurrency. We've already had the CEO of JPMorgan Chase, Jamie Dimon, come out and make public comments like this: "If you're stupid enough to buy bitcoin, you'll pay the price for it one day." He is trying to destroy the public perception of bitcoin and weaken confidence in it as an investment, because he's threatened by the emergence of bitcoin/cryptocurrency posing a threat to the traditional banking system.

Here's what you need to understand: If you hold bitcoin in a place in which you own and control the private key (for example, on a hardware wallet such as a ledger nano, keepkey or trezor), then you are effectively your own private bank -- you have total ownership and control over a private facility to store personal wealth. And THAT is why the traditional banking system is threatened by bitcoin and blockchain technology.

(By contrast, if you hold bitcoin/crypto in a place where someone else owns the private key, such as an exchange or an online wallet, then you're not acting as your own private bank because you're effectively just storing currency in someone else's bank, albeit digital currency).

This issue is on the periphery of public awareness because we're still in the early stages where most people don't really understand bitcoin or blockchain technology. That will change within a matter of years, and cryptocurrency will go mainstream. I think this debate will play out over many years, not 1 or 2 years like the Uber/Taxi debate. Banking institutions and governments may do everything in their power to try and run down bitcoin and suppress the mainstream adoption of cryptocurrency, but in my opinion they will ultimately fail.

 

[Chief]

I am sure people are making money off of it, but these "Bitcoin multimillionaires" are, I guess, just paper rich. Can you even convert them to cash? Are they accepted widely? I never see anyone accepting them online.

Who is buying a mansion with Bitcoin?

 

[Old M8]

I am sure people are making money off of it, but these "Bitcoin multimillionaires" are, I guess, just paper rich. Can you even convert them to cash? Are they accepted widely? I never see anyone accepting them online.

Who is buying a mansion with Bitcoin?

Bitcoin is highly liquid, you can convert them to cash in less than a second. They aren't just paper rich.

 

[King Brown]

What I don't understand is how a currency that is designed to be 'deflationary' work as a means of transaction. If Bitcoin increasingly becomes more valuable, then the incentive is to hoard it. This is fine for things that have an objective intrinsic value and restricted supply, such as land or gold, but Bitcoin only meets the latter of the two criteria.

So, aside from criminal enterprise, what is its purpose?

 

[Chief]

Bitcoin is highly liquid, you can convert them to cash in less than a second. They aren't just paper rich.

It looks like a shonky, complicated pyramid scheme to me. Did anyone from the MtGOX thing get their money back?

 

[Old M8]

It looks like a shonky, complicated pyramid scheme to me. Did anyone from the MtGOX thing get their money back?

MtGox was a problem for people who left their cash/bitcoin in the exchange. Dodgy company, but there's lots of way to sell your coins, no problems.

 

[Chief]

MtGox was a problem for people who left their cash/bitcoin in the exchange. Dodgy company, but there's lots of way to sell your coins, no problems.

Where does the cash come from when you sell?

 

[Taylor]

What I don't understand is how a currency that is designed to be 'deflationary' work as a means of transaction. If Bitcoin increasingly becomes more valuable, then the incentive is to hoard it. This is fine for things that have an objective intrinsic value and restricted supply, such as land or gold, but Bitcoin only meets the latter of the two criteria.

So, aside from criminal enterprise, what is its purpose?

I think the idea is that once there is an even distribution of bitcoin across the planet, since there is a restricted amount of bitcoin available objects in the real world should be worth the same amount of bitcoin this year as they are in twenty years - where as the paper money value of those objects will inflate over the years.

In the short term those holding it will hold it as long as the value climbs.

 

[King Brown]

I think the idea is that once there is an even distribution of bitcoin across the planet, since there is a restricted amount of bitcoin available objects in the real world should be worth the same amount of bitcoin this year as they are in twenty years - where as the paper money value of those objects will inflate over the years.

In the short term those holding it will hold it as long as the value climbs.

But the number of objects increases - we always make newer and better goods and services. Money supply has to keep up in order to purchase these things, otherwise you end up with incentives to hoard the money, which leads to further contraction in the money available to purchase - a vicious circle of deflation.

 

[RupieDupie]

The problem for bitcoin and bitcoin holders is that banks don't like bitcoin because it threatens to ruin their monopoly over the store of wealth. As I've said before, it's analogous to the Uber versus Taxi debate. Taxi drivers were in outrage when Uber entered the market, because it created competition for the Taxi industry and ended their monopoly over the "on-demand public transport" market, thus driving down the value of Taxi plates. It was a case of a new business model that took advantage of modern technology offering a superior service to the old, archaic taxi industry that hadn't changed in years. Taxis are now becoming redundant in many parts of the world as more and more people favor Uber and other ride-sharing services over traditional Taxis. A similar thing will occur with fiat currency versus cryptocurrency. We've already had the CEO of JPMorgan Chase, Jamie Dimon, come out and make public comments like this: "If you're stupid enough to buy bitcoin, you'll pay the price for it one day." He is trying to destroy the public perception of bitcoin and weaken confidence in it as an investment, because he's threatened by the emergence of bitcoin/cryptocurrency posing a threat to the traditional banking system.

Here's what you need to understand: If you hold bitcoin in a place in which you own and control the private key (for example, on a hardware wallet such as a ledger nano, keepkey or trezor), then you are effectively your own private bank -- you have total ownership and control over a private facility to store personal wealth. And THAT is why the traditional banking system is threatened by bitcoin and blockchain technology.

(By contrast, if you hold bitcoin/crypto in a place where someone else owns the private key, such as an exchange or an online wallet, then you're not acting as your own private bank because you're effectively just storing currency in someone else's bank, albeit digital currency).

This issue is on the periphery of public awareness because we're still in the early stages where most people don't really understand bitcoin or blockchain technology. That will change within a matter of years, and cryptocurrency will go mainstream. I think this debate will play out over many years, not 1 or 2 years like the Uber/Taxi debate. Banking institutions and governments may do everything in their power to try and run down bitcoin and suppress the mainstream adoption of cryptocurrency, but in my opinion they will ultimately fail.

I think an issue with Bitcoin is where it fails vs where Uber succeeded. That is, the financial marketplace is a minefield of shite, including laws, rules and regulations, additionally some countries can and do outlaw bitcoin. There are, for example, double standards whereby banks, for example, get automatic bailouts (and bonuses) if they fcuk up, or are fined, but other people / organisations doing way way way way way less (I cannot even understate the comparison) get some serious jail time.

I understand, for example, Charlie Shrem was jailed for "operating an unlicensed money transmitting business, money laundering conspiracy and willfully failing to file suspicious activity reports with banking authorities" whereas a certain CBA - Commonwealth Bank of Australia (I know these are from two different countries) has done something very similar (without the first one - but this proves my point) without jail-time penalty. The laws are written from these guyses (sic / sick) perspective.

That is, the issue is bitcoin tries to deal with the degeneracy of the current power structure, but the current power structure will do everything in its power to make the crypto-currency degenerate.

 

[Old M8]

Where does the cash come from when you sell?

From the person who wants to buy. Similar system to buying and selling shares.

 

[Chief]

From the person who wants to buy. Similar system to buying and selling shares.

Yeah... sounding more and more like a pyramid scheme.

 

[RupieDupie]

Yeah... sounding more and more like a pyramid scheme.

That's a good analogy with the stock market

 

[AM]

That's a good analogy with the stock market

Really! Here's me thinking I was buying shares in solid corporations.

 

[Chief]

That's a good analogy with the stock market

For some companies yes. But others give dividends, so there is a return not based solely on a rising price.

 

[AM]

For some companies yes. But others give dividends, so there is a return not based solely on a rising price.

And there is prudential oversight.

 

[RupieDupie]

Really! Here's me thinking I was buying shares in solid corporations.

Solid as a blow up doll - there’s nothing inside.

For some companies yes. But others give dividends, so there is a return not based solely on a rising price.

Fair enough, but you’re discussing the overall system based on what a few well designed levers and pulleys can do. The system as a whole seems to favour the established.

 

[Long Live HFC]

as noted above, bitcoin will never be a currency until it can actually act as a medium of exchange. it's ever-increasing value makes it a terrible currency alternative, as it encourages hoarding. to be considered a currency people must also be able to buy stuff with it without having to convert it into dollars first, ie it needs widespread acceptance on par with cash or credit. until you can buy milk and bread at woolworths with bitcoin, it's not a currency.

the idea that bitcoin threatens the USD or EUR etc is not compelling (despite all the love from the ideologues). the sheer differences in scale make such propositions unlikely (at least, not remotely soon). it makes no sense to compare the little libertarians, clutching their handful of coins and buying nose candy on silkroad, with government and big business' money movements. nation states aren't about to give up regulatory authority over their currencies in favour of a bunch of miners with too many GPUs in their PC, and the libertarians will never have the clout to take it away from them.

https://www.marketwatch.com/story/b...000000-to-be-a-legitimate-currency-2017-09-15

im more interested to see whether it can become big enough to bring more competition to currency conversion fees (though btc conversion or transaction fees aren't exactly setting the world on fire http://mashable.com/2017/08/28/bitcoin-transaction-fees/#Kldgq8Vgykq9 )

 

[AM]

Solid as a blow up doll - there’s nothing inside.

Oh really! Nothing inside CBA, BHP, Coles, CSL, Wesfarmers................et al...........et al .............et al..........

Just as folk have lost money with foolish property decisions, folk have done so on the stock market too. Frankly, to equate solid shares with Bitcoin is laughable.

 

[woota]

as noted above, bitcoin will never be a currency until it can actually act as a medium of exchange. it's ever-increasing value makes it a terrible currency alternative, as it encourages hoarding. to be considered a currency people must also be able to buy stuff with it without having to convert it into dollars first, ie it needs widespread acceptance on par with cash or credit. until you can buy milk and bread at woolworths with bitcoin, it's not a currency.

the idea that bitcoin threatens the USD or EUR etc is not compelling (despite all the love from the ideologues). the sheer differences in scale make such propositions unlikely (at least, not remotely soon). it makes no sense to compare the little libertarians, clutching their handful of coins and buying nose candy on silkroad, with government and big business' money movements. nation states aren't about to give up regulatory authority over their currencies in favour of a bunch of miners with too many GPUs in their PC, and the libertarians will never have the clout to take it away from them.

https://www.marketwatch.com/story/b...000000-to-be-a-legitimate-currency-2017-09-15

im more interested to see whether it can become big enough to bring more competition to currency conversion fees (though btc conversion or transaction fees aren't exactly setting the world on fire http://mashable.com/2017/08/28/bitcoin-transaction-fees/#Kldgq8Vgykq9 )

You're way too focused on bitcoin. Bitcoin marked the dawn of blockchain technology; we've come a a long way since then. Electroneum and Ethos are going to bring cryptocurrency to the masses, not bitcoin.

 

[RupieDupie]

Oh really! Nothing inside CBA, BHP, Coles, CSL, Wesfarmers................et al...........et al .............et al..........

Just as folk have lost money with foolish property decisions, folk have done so on the stock market too. Frankly, to equate solid shares with Bitcoin is laughable.

I don’t think you can point out a few established companies to state the system isn’t just a tarted up bit of plastic. And secondly if this isn’t the case why is bitcoin any different?

 

[Long Live HFC]

You're way too focused on bitcoin. Bitcoin marked the dawn of blockchain technology; we've come a a long way since then. Electroneum and Ethos are going to bring cryptocurrency to the masses, not bitcoin.

well sure, but it is the title of this thread honestly, i just haven't read enough about etherium and all the other relatively new competitors to make much comment on them. or more correctly, i haven't had libertarians preaching at me about them for the last 5 years or so.

however, i would still make the general comment as per the above, that countries aren't going to be pushed off their currency by cryptos, they will exist alongside each other (as someone mentioned, in a similar way to how gold does now, just with more utility).

 

[kickazz]

Yeah... sounding more and more like a pyramid scheme.

Capitalism's requirement for constant growth in consumption could also be described as such