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Comment by empath75 | Hacker News Reader

The only practical use cases for bitcoin as a currency are money laundering, selling drugs, evading capital controls and tax evasion so the least regulated exchanges are going to draw a lot of volume.

As a store of value, you’re depending on its continued use as a tool for criminals for it to appreciate in value beyond pure beanie baby-style speculation, so you depend on you still depend sketchy exchanges to drive the price.

When the futures contracts come out, there is going to be a massive price correction as bitfinex isn’t going to be able to print enough tether to counteract all the shorts.

Once the price of bitcoin starts dropping, people are going to try and cash out of bitfinex en masse, causing a run on the bank and collapsing the whole house of cards. I wouldn’t be surprised to see sub-1000 bitcoins by January.

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> The only practical use cases for bitcoin as a currency are money laundering, selling drugs, evading capital controls and tax evasion

Bitcoin is actually terrible for these use cases since the blockchain is public and more traceable than your credit card. If you're really trying to hide your financial transactions then a better option would be something more anonymous like cash, or one of the other cryptocoins that actually does provide anonymity.

Your inaccurate and misconceived perception of what bitcoin's use case is would be laughable if it weren't so popular and wrong. I fear you're completely misunderstanding the new world economy. You think that bitcoin is a sideshow for criminals, and seemingly failed to see that maybe a large parallel economy is being created digitally.

You see, Bitcoin was created after the 2008 crash where the banks, the organizations we've trusted with our money for a century, made some deliberate and knowingly poor decisions and they lost a lot of money for many of us.

Bitcoin was invented so that never has to happen again, so that we can have a secure storage for our money without someone else controlling that money. You might say that bitcoin was created to get away from the wall street criminals. I suggest you pick up some cryptocoin (of any kind) so you're not completely left in the dust as the centralized banks lose power and the decentralized economy reigns.

> You see, Bitcoin was created after the 2008 crash where the banks, the organizations we've trusted with our money for a century, made some deliberate and knowingly poor decisions and they lost a lot of money for many of us.

I hadn't heard about that. Which banks lost their customers' money in the 2008 crash?

The banking system deliberately removed value from all holders of EUR, GBP and USD: https://en.wikipedia.org/wiki/Quantitative_easing

This is false. During QE, inflation rate was below target, so less value than normal was removed from EUR, GBP, USD, etc.

You can't measure value like that during a recession. Whichever way you look at it, QE removed value from those currencies.

If I were to rob you, claiming that the overall robbery rate was lower that year, so you weren't robbed by others, so your expected losses were lower does not change the fact that I robbed you.

If the money in my bank losing value is robbery, isn't Bitcoin robbing me all the time? Bitcoin price changes may not be intentional, but I don't see why that should matter to me.

A lot of them of them but customers didn’t see their balance move because it was repaid indirectly with their taxes money

example: https://en.wikipedia.org/wiki/Icesave_dispute#Collapse_of_La...

https://en.m.wikipedia.org/wiki/List_of_bank_failures_in_the...

I certainly know of people who lost a lot of money as bank shareholders rather than as customers.

You seem to be interpreting this very literally as money lost from bank accounts.

Banking involves a lot more than simply money in checking accounts so I didn't think it needed to be established that a lot of people lost value in different ways in 2008. A number of banks packaged subprime mortgage lots that were misrepresented, sold and when they defaulted, they crashed the lending market which rippled through other parts of the economy causing job loss, real estate price crashes, stock value crashes and other types of lost equity for millions of people.

But I guess if you want to take it literally, then you're right... nobody had cash go missing from their checking account. I personally lost about $60,000 in equity, but my checking account was not affected if that makes you feel warm and fuzzy about saying no banks lost anybody's "money".

You convinced me, I’m putting everything into dogecoin.

Bitcoin replaces one tyranny with one that is far worse.

If it succeeded in displacing existing currencies as you attest, it would amount to an unprecedented and catastrophic redistribution and concentration of wealth.

80% of all bitcoins that can ever exist have been mined and are already owned; this is a monstrous design decision far more unjust than the inflation bitcoin sought to prevent.

Our current corrupt and stinking financial system is far preferable to the neo-feudal world of bitcoin where all spending power is concentrated in the hands of a tiny number of tech overlords who had the sheer good fortune to literally own all the money.

I think you're right in a lot of ways, but that doesn't change what is happening and the best option doesn't always win.

Not really true, there are legitimate use cases for bitcoin. E.g. Cross Border payments, settlement between untrusted parties in a low amount of time, Transaction Settlement Layer etc.

Not saying there aren't a lot of dodgy transactions going on, or that the legitimate use cases will take off, but ignoring the practical use cases is misleading.

As someone who has dozens of thousands of dollars (not in Bitcoin, I sold some of them) on an exchange, what should I do with that money ? Should I ask the website to verse everything on my bank account ?

If you’re on a legit exchange you should be able to withdraw everything. You should never use an exchange as a bank. Have exactly the money on there that you intend to trade with and no more.

It's basically the opportunity cost of being able to trade quickly (xc->bank->xc would take 10+ business days) versus the risk of having co-mingled funds in an unregulated exchange.

The reason banks are regulated in the US is because the banking system pre 1930s wasn't too dissimilar from crypto now.

>The only practical use cases for bitcoin as a currency are money laundering, selling drugs, evading capital controls and tax evasion so the least regulated exchanges are going to draw a lot of volume.

I think it's somewhat realistic to envision a future where there is substantial transaction value of legitimate, legal uses. Maybe that future isn't probable, but the idea that the price of bitcoin would ever reach its current price seemed rather unlikely at one point, too.

I'm not conversant on the first part, but as soon as I heard about futures, I thought a correction would be likely. I suppose we'll see.

Amateur mistake!

Bitcoin cannot crash because you cannot sell and cash out in timely manner.

The CME futures won't mean a thing if the spot price they settle against is being manipulated. The future predicts the spot price so the spot moves the future not the other way around. Since the CME futures will be financially settled against the spot index look out for another LIBOR type problem where the future doesnt do anything except predict an artificial number.

It seems you misunderstand both derivatives as well as the Libor rigging. The price of a future absolutely can affect the price of its underlying, and the Libor rigging has nothing to do with any of this - the problem was that the value was not determined by the market, it was basically just a “vote.”

I work in derivatives trading (well did, recently fx). I see you do too. Fun huh.

I meant libor as in a futures price that was disconnected from anything meaningful not a direct comparison. The comparison was to how libor was easily rigged by those submitting quotes that weren't correct. Libor wasn't just a vote but a collection of informal (and incorrect) quotes.

When financially settled against a manipulated number the standard ways a future affects the spot (by taking delivery) doesn't apply.

Go read the proposed contacts for the future and real time BTC index. If the index is being manipulated the future doesn't stand a chance at correcting it.

Ah I see what you mean, that makes sense. I took quickly jumped to assuming ignorance regarding the Libor thing. I definitely agree with the concept.

This reminds me of potential VIX options manipulation. Not quite the same thing, and probably not as susceptible to manipulation, but a similar concept nonetheless: https://www.bloomberg.com/view/articles/2017-05-24/vix-tradi...

My experience is equity options, btw.

I used to run a trade of equity options against the closing cross near witching days. Cool.

I'm going to hit you up on linkedin. Always good to have good tech contacts.

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