Bitcoin Blows Past $9,000

Ripple will find a use and may do quite well. But it requires more trust in a few centralized parties. It won't replace Bitcoin's primary use case as the highest security value store and world-wide settlement layer.

https://themerkle.com/ripple-labs-settles-lawsuit-with-jed-m...

That's an interesting way to think about BCH. Some of the price increase is justified due to the increasing legitimization of all crypto currencies but definitely not 100x.

I am not going to throw allegations out, but I believe there will be a day in the coming years where we read stories about organized crime and pump and dumps in this space. I believe the bitcoin forks will be at the heart of this all.

Everybody is happily singing the song of crypto while the music is going. Not sure how long it will last.

I think this is a good overview of the basic numbers and banking situation: https://ftalphaville.ft.com/2017/09/15/2193370/crypto-tether...

If you're a CTO of a major company and you don't have a wallet with at least $1m in BTC in some wallet somewhere then you're risking a major disaster if someone breaks in and locks up your data.

But just because there are real uses doesn't mean that I think that the government will allow it to remain legal.

There have been plenty of crashes until now, and those who "smelled it" and sold (I did) lost lots of paper profits.

There will be other crashes for sure, and it will be impossible to know if it's the BTC Apocalypse™ or the BTC Yearly Crash™ until late in the process.

Unless, of course, one belongs to the BTC-illuminati.

I agree that each asset class comes with risk, and that euro and dollar is currently less risky than crypto. But remember that each has its own risk. Fiat money goes down at about 2% each year, if you're in a proper economy. Did you see the quantitative easing that was done on the dollar? Scary.

Do you think people in Zimbabwe are "cashing out" to their local currency? https://www.bloomberg.com/news/articles/2017-11-15/bitcoin-s...

Some people are even "cashing out" to expensive real estate I read, not dollars.

Don't make the mistake to think euro's or dollars are the unit of value, they are not. Their price goes up and down just like everything else. History was not kind to fiat money (see French revolution for example).

Bitcoin is in a position to compete with central banks and commercial banks with fraction reserves. The chance of crypto really getting that far might be low, but it is still there, don't forget about that.

Nobody can be certain of the "bitcoin bubble", and nobody can be certain of the "worldwide bitcoin takeover of fiat money". Maybe it will end somewhere in between. It's all chances. You have to play on the risk factors of each, not on "I believe ...".

You don't cash out, you properly organize your assets.

Your statement, from my understanding, is saying "if people cash out, everything will crash". That's simply not true. More so, it's not true because that's fundamentally not how markets work.

Whenever someone buys 400 BTC, that means someone else sold or "cashed out" 400 BTC. This is a highly liquid market system with many participants, not a lottery system.

Even more: having the masses controlling the capital would allow for novel allocation of financial resources: nobody would have killed the electric car 40 years ago if research capital had been more distributed (just an example, not trying to bring up any specific conspiration theory).

More applications, taken from git: before git took the development world by storm, everybody was pretty much used to cumbersome and slow merges when doing team development. Once a fast vcs tool appeared, the possibilities multiplied, and whole new industries emerged. A couple of simple features (speed, low cost, easy setup) where enough to create a miriad of new applications.

Money being at the base of everything, from economics to politicis to science, the blockchain is poised to revolutionize society as no other technology has achieved before.

An option or future is zero sum. One goes to zero, the other gets paid on expiration, a winner and loser.

The fact that money sitting in a checking account depreciates due to inflation is a terrible argument for cryptocurrency. No one actually does that with any significant amount of capital.

The reason we need money, from a societal sense, is that there is a time gap between when we decide to build something and when that thing is finished. You need access to raw materials, or labour before the thing you are building is completed. The premise is that the thing you are building is more valuable than the raw material and labour that went into it. Money is basically a lubricant that allows you to pay people before you start and then balance the books after you finish.

If money increased in value over time, we would have a problem. Let's say that the thing you are building will return an extra 5% on the investment. If holding on to money and doing nothing returned 10% in the same time period, you would be stupid to build the thing. You will make more money by doing nothing.

In a deflationary system, people will tend not want to risk the money they have by spending it to build something. This means less demand for goods and services and causes people to be idle. Access to capital is harder because why would I lend you money when I can just make a return by doing nothing? If I'm going to lend it to you, you had better lock in a really good rate -- which means you need to have a spectacular return on investment in your enterprise.

Essentially, rich people are rewarded and poor people are screwed. Society has no incentive to build things and poor people can't bootstrap themselves out of poverty without incredible risk.

I think the easiest way to verify this for yourself is to look at BTC. If you own BTC, what value does it have on society sitting in your wallet? Now consider using those BTC to buy something and employ people. Would you do it? Or would you rather park the BTC in your wallet and hope for a 2-300% return through deflation? Imagine I wanted to start a game company and I would like to borrow your BTC so that I can hire artists, musicians and programmers? Would you lend me your money? What kind of promises would it take to entice you to lend me your money?

Now imagine a currency where the value decreases over time. So you have a million units and over the period of your lifetime, the value will decrease to almost nothing. How does that change your view of whether or not it's a good idea to lend me your money? How does that ultimately affect society?

Transaction costs are high, Transactions take forever to pass, and it's not even really anonymous.

"Of the four key areas of investment knowledge — theory, history, psychology, and investment industry practices — the lack of historical knowledge is the one that causes the most damage. In finance, there is no controversy: the same speculative follies play out with almost clock-like regularity about once a generation."

A whole lot of investors have come to believe that history is obsolete, and later regretted it.

At the moment they are pretty obnoxious about it and are feeling bad for me.

To liquidate your position and to make a profit you need constant inflow of new investors to keep the market going as BTC has no true value. There's no backing of any hard assets.

The revenue stream is based on new investments rather than the underlying product itself. That's a very common pyramid scheme/multi level marketing scenario.

This is very different from company stocks, as the stock unit itself is a guarantor of dividends and a small part ownership of the assets of a company. Its price is representative of the performance of the company, it is not the product itself. That company produces something (in theory), although to cash out you still need to find someone to buy it at a said price.

Why would the rest of the world decide this? It’d hurt them more than it’d hurt the US or else they’d have done it already.

Economically the US is very well positioned - it has friendly neighbors, a robust legal system, a diversified industry and a lot of natural resources, so it would take quite a bit for hyperinflation to occur. Obviously anything is possible, though.

Why would the world suddenly not want in on that?

When Zimbabwe destroyed its currency the real killer wasn't leaving the printing presses on (it was too late by that point) it was the systematic destruction of its agricultural industry.

If the influx of USD was higher and faster than could be addressed, the economy would naturally get inflation that would force interest rates even higher up (since no banks will lend at a loss, so borrowing costs get pushed up first by the fed, and then by the need to cover for expected inflation). This would be a death blow to many indebted and highly-leveraged businesses that are dependent on low interest rates for operational purposes (including those in the financial sector) and so they would go out of business. The need for the financial system to write-off the debt held by these companies would also eliminate a certain amount of money in circulation. Eventually enough money has been destroyed/absorbed and the economy is back in equilibrium.

On a less than academic note: this is not a totally unlikely scenario since the flight-to-crypto is a de facto process of de-dollarization, with crypto assets essentially replacing fiat both as store of value as well as medium of exchange. Put another way, the increase in the value of cryptocurrencies is really just a loss in the purchasing power of everyone holding fiat, and since these additional assets are now competing to purchase the same pool of goods, what people think of as bubbles in assets like housing are really just reflective of inflation in the underlying supply of money-that-can-buy-things. And it will get worse when you can sell your house for crypto.

People will scoop up all the free dollars, and bring them back to the us where they have value.

Contracts still have to be paid in dollars. Some people around the world would be upset that their dollars are worthless, but it turns out they could sell those dollars to people who need to pay debts in dollars. So suddenly this valueless piece of paper has value again, because you can trade it for things you want.

if you can in an instant impose some irrational condition for an instant, i think the global economy will, certainly shift, but people would notice all of the arbitrage opportunities and things would _generally_ go back to the way they were, like a flash crash.

if you could wave a magic wand, and make people think the dollar is worthless for 10 years? That would be weird. i imagine we'd make a new currency, dollar2 and just pay everyone in that. you could bring in old dollars to the us and exchange them for dollar2's. But because people are under a spell, they can't think of the arbitrage idea. so it only happens accidentally.

As long as there's a base of goods/services that can be bought and are priced in dollars, dollars will continue to have value.

Why would the fed need to buy back dollars?

You might as well ask what would happen if the world suddenly disbelieved in anything else that's just a social construct -- property, authority, family, etc. It's a fun and perhaps enlightening thought experiment, but not much practical use.

To be crude, human poop takes effort to create, but the worth of it as a tradable good is significantly less than the effort involved.