Bitcoin hits $10,000
bloomberg.com
bloomberg.com
“We have underestimated the populist movements,” he said. “There is growing unease on how central banks and governments are managing fiat currencies. Ordinary people globally understand why a decentralized asset is the ultimate safe haven.””
That’s the reason for 10k and it will be the reason for 100k. 100k puts the market at cap at a trillion, it’s not that crazy if you remember that Gold is several times that and other than looking good as jewelry it has no other real intrinsic value. No one likes to talk about that though, they like to demonize bitcoin which actually does something gold could never do. Force trust in a world where you can’t trust anything.
It's the same with expensive paintings. A painting is considered to be beautiful (some are actually ugly) and have some deep meaning only after it's sold for a lot of money.
I too thought most of this "throw paint onto a canvas and charge rich suckers thousands of dollars" is bullshit. But after seeing some Picassos IIRC, I realized, yes there is a method to the madness.
Even if the painting wasn't displayed in a fancy museum, I think I would still have thought it was "special".
But those "artists" that pour paint onto the canvas - complete bullshit.
If a five year old can do it - it's not art except to the parents of those "artists"
Reason: it's complicated. But something that's DEFINITELY required for this to be possible is scarcity. The artist is not alive any more. It would never sell for that much if he were still alive.
True digital scarcity is a hard problem to solve (because computers are good at copying things). Bitcoin was the first system that was able to solve this problem.
This does away with the idea that gold has no relevant value outside jewlery.
It seems likely that the dominant currency of the future will be heavily inspired by Bitcoin--but will it be the same blockchain Bitcoin uses today?
Seems unlikely to me.
The ICO's are like the Webvan and Amazons - similar to how businesses used the Internet to serve their respective industries, we are now using ICO's to serve specific markets.
Rentberry for Rentals, Enjincoin for Games.
With so many new ICOs, it feels like the early Startup Scene but now it's with a focus in Cryptocurrency.
How so? I buy lunch with Bitcoin and a few weeks ago I paid for a car repair with it. If I need more, I just go to a bitcoin vending machine near by.
* https://bitinfocharts.com/comparison/bitcoin-transactionfees...
(Assuming you bought it for cheaper than the price you transact at)
While this may seem pedantic, it is important that people do not rely on BTC transactions for anonymity. Perpetuating this myth may become dangerous for some Bitcoin users.
Unlike most other metals, gold is suitable as a currency partly because it doesn't get 'used up' in industrial processes in any significant way (where it is used its malleability ensures only tiny amounts are necessary - one gram of gold is enough for a square metre of gold leaf). Similarly, its use as jewellery is not so much to create beautiful objects, but as small portable stores of wealth[1] - in the world's biggest gold jewellery market (India) the price of jewellery is pretty much the same as the price of the raw materials (i.e. gold).
[1] Funny story. I once had a colleague who married an Indian woman in India. He came back to work wearing a lot of gold jewellery (watch, bracelets, rings, necklace or two, etc). Even he thought it was ridiculous, but he felt obliged to wear it. I had to explain to him that he wasn't given all of it with the expectation that he'd actually wear it - it was basically his wife's family's way of giving them money.
You are right though and I am being a little sarcastic on purpose. People have argued that Gold has real intrinsic value which it does have its uses but no more or no less than any other important precious metal we use.
The only real thing that makes gold valuable is it's scarcity. If it stopped being scarce because an asteroid containing a lot of gold was brought back to Earth, people would stop valuing gold and stop making jewelry out of it.
Bitcoin has the same important property of scarcity as gold.
It's easy to tell if the Bitcoin that you just received is real or not. (Definitely much easier and cheaper than with gold).
Gold usage %:
- Jewelry: 52%
- Govt holdings: 18%
- Investment: 16%
- Industrial: 12%
- Unaccounted: 2%
[1] https://blogs.thomsonreuters.com/answerson/gold-industry-dev...
Ordinary people have never heard of bitcoin. I have relatives working in finance who don't understand bitcoin.
If so, I don't think you have a truly representative sample.
On the other hand, I still think governments are going to ban it once they understand it. But for now: :D
And I totally agree that they'll ban it once they understand it :-)
I think on a surface level, they'd say sure, digital money, why wouldn't that be the future but they assume it comes from an "authoritative" source such as the UN or a government.
If I were living in a world where money had just been invented, I suppose I'd care mainly that whoever was issuing it was trustworthy enough not to issue extra on the side.* Otherwise I wouldn't really care where it came from.
I'm not sure if I'm agreeing with you, disagreeing, or just continuing the discussion.
*Eventually I'd come to understand that inflation is not necessarily a bad thing, but my first instinct would be that I'd value money only if it were scarce.
How are you interpreting the term "understand"?
Does the average person even understand what a "decentralized asset" is?
https://twitter.com/bitfinex https://www.reddit.com/r/bitfinex/comments/7fx9z9/bitfinex_w...
Perhaps Bitcoin will recover from this fraud or another cryptocurrency will take the lead in the space, but we are headed for a crash.
please, explain what money is "fake" and what "injected" and "ecosystem" mean.
In a sense people are worried that they're literally making up money on the promise they have US Dollars so they can buy up BTC and sell it to maybe regain the missing USD? Unclear.
Need to remember that this is the same place, I believe, that was "hacked" and they spread the losses across all their customers if their costs were actually lost or not. Details have been hard to come by which is where the suspicion seems to have really started.
https://coinmarketcap.com/currencies/tether/
If Tether is what they say it is, this can only come from investments of US dollars. Ie nearly $400 million dollars of investment in one month.
On November 21 Tether announced a hack in which they lost $30 million.
Bitfinex is extremely likely to be insolvent at this point. Users are complaining of an inability to withdraw funds on Reddit, and Bitfinex's Twitter has a days old announcement of a supposed DDoS attack, with no updates:
https://www.reddit.com/r/bitfinex/comments/7g8cp3/eth_withdr...
Tether has been traded on other exchanges for other cryptos, meaning that these other cryptos have been inflated by purchases with fake money.
This is a good outline of the scenario I think is about to play out:
https://prestonbyrne.com/2017/11/26/the-bear-case-for-crypto...
Bitfinex'ed is an anonymous Twitter and Medium account that is explaining the Tether fraud much better than I can:
That is, of course, if it actually was a theft, and it was actually for $30 million. It's a single source currency, no one but the people running Tether knows what's actually behind it.
I can't really think of many reasons why you would use crypto to pay for a coffee or a sandwich if you live in the West (or frankly, even most developing nations).
On the other hand, I can definitely see the utility in a censorship-resistant digital medium to store wealth. To me, this latter use case has much, much more potential to serve the unbanked (as well as the banked).
Some use cases I can think off the top of my head:
(1) You are from Syria and need to flee war and escape into Europe – however bank transfers into Europe are almost impossible if you are a common Syrian. Bitcoin allows you to take your wealth with you, in your brain, as you escape across the border, by just memorising your twelve word private key.
(2) You are from Venezuela or Zimbabwe – The government has issued capital controls and is devaluing currency by the day. You transfer your wealth into Bitcoin in order to offset capital erosion due to hyper-inflation. When the situation stabilises, you transfer your Bitcoin back into fiat.
(3) You are Saudi billionaire Al-Waleed bin Talal. The government freezes all your assets in a political coup. If you have a portion of your wealth in Bitcoin, you could protect them from government expropriation and anonymously transfer them to associates or family members abroad.
(4) You are whistleblower Julian Assance and have been cut off from the financial system as a way to censor your speech. Bitcoin allows you to have an unbreakable digital "Swiss bank account" that the authorities are not able to reach.
This reminds me of Peter Thiel's recent words about Bitcoin [1]: "it's like a reserve form of money, it's like gold, and it's just a store of value. You don't need to use it to make payments."
Reference: [1] https://www.coindesk.com/peter-thiel-bitcoin-like-reserve-fo...
Here's the other four...
https://news.ycombinator.com/item?id=15792805
https://news.ycombinator.com/item?id=15787235
https://news.ycombinator.com/item?id=15787155
https://news.ycombinator.com/item?id=15786568
"I can totally just casually think of certain use cases right off the top of my head here spontaneously, let me see here... [PASTE]"
Until recently that was one of the main utilities of Bitcoin and the mainstream community changed the discourse to "reserve of value". BitPay, Coinbase, Xapo et al were created with the idea of transactions.
This is just one of many observations about how people arguments are not consistent.
I think many organizations behind Bitcoin are responsible for delaying relatively simple innovations to make Bitcoin useful for transactions.
See: https://en.wikipedia.org/wiki/Virtual_currency_law_in_the_Un...
Congress may have the power to prohibit virtual currencies (VCs) under its power “[t]o regulate Commerce with foreign Nations, and among the several States”[64] and under its exclusive constitutional power “to coin Money” and “regulate the Value thereof.”[64] In a November 2014 decision, the Court upheld the power of regulators to prosecute a defendant who “designed, created and minted coins called ‘Liberty Dollars,’ coins ‘in resemblance or in similitude’ [or made to look like] of U.S. coins."[65] Although the defendant did not pass the Liberty Dollars currency as a counterfeit, the currency were in close enough “resemblance of coins of the United States or of foreign countries” and consequentially fell under the authority of 18 U.S.C.A. § 486.123 The Court has not decided if § 486 includes the power to prohibit VCs, but if a Court decides that the purpose and intent of VC resembles United States or foreign currency it may fall under § 486. The Stamp Payment Act of 1862 prohibits anyone from “mak[ing], issu[ing], circulat[ing], or pay[ing] out any note, check, memorandum, token, or other obligation for a less sum than $1, intended to circulate as money or to be received or used in lieu of lawful money of the United States.”[66] The Court has not decided if Congress has the power to prohibit VCs under this Act or any other existing regulation or statute.
No, they have not forced private businesses to accept bitcoin.
I don't believe that's true. The US dollar is only mandatory for two things: for settling debts (the lender must accept USD to extinguish debt) and for paying taxes. Otherwise people are free to trade as they please - euros, chickens, whatever.
https://www.legalmatch.com/law-library/article/bartering-law...
I've never heard of such laws. You have a source on this?
How exactly do you transfer your wealth to BTC in this scenario? There aren't many people willing to sell BTC in exchange for a rapidly devaluing third world currency. Realistically, to use any of the large online exchanges, you'll need to convert it to some common currency (like USD or Euro) anyway. But if you can do that, why would you buy BTC, instead of just storing your money in that common currency? It's going to be a lot more stable.
So, okay, some of the fortunate people who do have access to USD/EUR are trading it for Bitcoin on LocalBitcoins, not just storing it. But you're making it sound like this is a graph of ordinary Venezuelans trading their hard-earned bolivar into lucrative Bitcoin, which it almost certainly isn't.
Except now they can't literally come take the USD nor can they freeze in-country or off-shore banks so if that's a real scenario for you BTC is a pretty nice deal.
You seem to confuse a technique to combat money laundering with the laundering itself.
[0] https://en.wikipedia.org/wiki/Money_laundering "Money laundering is the process of transforming the profits of crime and corruption into ostensibly "legitimate" assets."
[1] https://www.investopedia.com/terms/m/moneylaundering.asp "Money laundering is the process of creating the appearance that large amounts of money obtained from criminal activity, such as drug trafficking or terrorist activity, originated from a legitimate source."
[2] https://www.int-comp.org/careers/a-career-in-aml/what-is-mon... "Money laundering is the generic term used to describe the process by which criminals disguise the original ownership and control of the proceeds of criminal conduct by making such proceeds appear to have derived from a legitimate source."
Also unlike most people think, these days nobody has their money stored beneath their mattress.
More or less all money, is invested some where.
E.g. if I take the same exact comment but paraphrase it every time I post it, would that be ok?
The reason I ask is because I see a few accounts post the same tired criticism of bitcoin over and over and see no reprisal for spam.
I would be interested in understanding what the objective rule here is, since I checked the guidelines and could not find references to comment spam definition.
Thanks.
http://edition.cnn.com/2017/10/31/africa/zimbabwe-bitcoin-su...
And whose job is it to investigate bitcoin fraud and theft? No one.
Whose job is it? Anyone who has a stake in trusting and maintaining bitcoin's value. So the rich are incentivized to safeguard the poor in some sense here.
Now I don't mean to be patronizing, but it is useful for us to ask ourselves, "how were we convinced that this was desirable?"
Essentially, the government creates it by law and then forces you to use it.
I'm struggling to see how this applies to bitcoin.
Please expand. Which state is forcing people to pay their taxes in Bitcoin, and/or authorizing it as legal tender?
... as imposed (that is, "by fiat") by some governmental organization.
Bitcoin's "true" value may be dubious, but it's most definitely not a fiat currency.
My understanding is that it's scarcity is the prime driver of its value, at least in monetary terms, and bitcoin shares that quality. Of course gold does have physical qualities that are useful, but so do many other metals that are not used as stores of value.
The prime driver of gold's value is clearly its historical role as a commodity and its scarcity, neither of which are related to any kind of intrinsic qualities.
My point is that the two things gold has going for it (scarcity and the fact that people believe it is a good place to store value) can now be said about bitcoin as well from what I can see.
Full disclosure: I do not own any cryptocoins. Too volatile for my tastes.
scarcity is only one factor to consider - demand and fungibility are also important factors among others.
Everything in that sentence also applies to bitcoin. Probably the one difference I can see is that if someone loses their private key, the bitcoins associated with that key become useless. Gold does not have that problem.
EDIT: Okay, another huge con with bitcoins is that people don't understand them. Most people at least think they understand why gold is valuable. The confusion a "cryptocurrency" creates is a notable negative.
Currency itself has to be created out of thin air.
The protocol stops counterfeiting, the miners stop individuals from failing to fulfill a payment (i.e. stops double spends) and theft is governed by whatever jurisdiction the crime happens in.
The US government does not prosecute thefts of USD in other countries.
I believe people often trot out the 'actual worthlessness' of fiat currency, to support a misguided idea that btc must be the democratic antidote which will free countless millions from the financial enslavement of the global financial machine.
Currency is currency BECAUSE its sponsored by government. And the payments system only works because you are indemnified. By the FDIC. By Chase Credit Cards. That is, the evil banks. How so for btc?
BTC hits 10k while US readies to pass tax overhauls to increase an already alarming wealth inequality. Freedom fighters should pick the right battles.
I'm not sure that's true. What makes a currency is it's usage. If enough people agree to the value of something, it's irrelevant whether a government sponsors it. You see this all the time with small towns using local "currencies" for specific usages [0]. It's the same idea.
[0] https://en.wikipedia.org/wiki/List_of_community_currencies_i...
For all this talk of inequality, why don't poor all over the world just throw their national fiat currencies under the bus and start all over from scratch? Sure doing this every few decades should ideally reset the wealth counter to 0 for most of the top 1%.
That is where fiat currencies come in. Because you don't want extreme situations in either case. Do you seriously want a certain large section of world population holding the entire global financial ecosystem at gunpoint and dictate its terms?
Pay x% taxes as we demand or we fork the blockchain and reset it all to 0.
Unlike fiat cash or gold, you can't spend it without an internet connection (in order to sync up the public ledger and submit the transaction).
You're subject to miners to approve your transactions, which in theory should be democratized, but isn't really since it's based on computing power, which in turn can be bought or centralized in mining pools.
You're subject to a small cabal of developers' whims in having to use the reference client and hardforks to patch up bugs in the protocol. In theory that should also be democratized, with people free to use whatever forks they want, but in practice it's centralized with everyone fleeing to whichever fork all the mining pools go with.
I'm trying to cash out some of mine and I've been downloading the blockchain for four days now. I had to buy a new hard drive before I could even start. I've read that it takes over an hour to do a transaction now, although I'm not yet in a position to verify that. If you look on the btc related subreddits nobody recommends using a proper client as Satoshi intended, it's all about accounts on websites offering a service that could reasonably be described as "banking".
Just playing devils advocate, but you can't replicate/duplicate gold. On the other hand I could create 21M cryptocoins on a blockchain (calling them Bitcoin2 or even just Bitcoin if it pleases). I can make them function identically, similarly or more efficiently than Bitcoin. I can create a new blockchain (network) or put these coins on an existing blockchain (say the Ethereum blockchain). How much would you pay for all 21M Bitcoin? How much would you pay me to create you 21M Bitcoin2 and transfer 100% of them to you?
You say Bitcoin is $10k because ordinary people understand why a decentralized asset is the ultimate safe haven. If that is your premises it makes little sense to compare Bitcoin to gold, compare Bitcoin to other currencies. Why does Litecoin = $100 and Ether = $500? Bitcoin may do something gold could never do, obviously, but can it do anything any other cryptocoin/token can't?
The real irony is cryptocoins and blockchains couldn't even exist without gold, because it is a necessary component in the machines that created bitcoin, that hosts blockchain nodes, mines, hosts wallets and facilitates transactions.
https://www.slideshare.net/winklevosscap/money-is-broken-its... (Slides 7-17)
https://www.gold.org/about-gold/gold-supply/gold-mining/how-...
Econ 101: The price of a currency is based on people's trust in that currency.
>The real irony is cryptocoins and blockchains couldn't even exist without gold, because it is a necessary component in the machines that created bitcoin, that hosts blockchain nodes, mines, hosts wallets and facilitates transactions.
That's not irony. Thats a happy coincidence.
That is the beauty of blockchain right? Its trustless! I'll create 21M of Bitcoin2 on the Ethereum blockchain and send you the smart contract address you can verify on etherscan and boom there is no trust needed.
Edit: As to Irony, OP could have used anything to justify the value of Bitcoin, it is ironic he would select Gold and say it has no intrinsic value other than looking good as jewelry, when it is a intrinsic component to the Bitcoin ecosystem. Notwithstanding, I don't think its a coincidence OP compared Bitcoins value to gold.
Right, but how many people really trust Bitcoin? And by trust, I mean trust that it will retain its value for the foreseeable future.
I have trust that the Euro will retain its value, so I feel confident pricing my product and services using it. On the other hand you'd be crazy to price anything in Bitcoin.
No one has trust in Bitcoin as a currency. Some people have some degree of trust in it as an investment vehicle, which is fine. That doesn't make Bitcoin a currency any more than gold is.
Why? It was easy to add Cryptocurrency as a purchasing option for the online store for my shed business. My buildings are priced in dollars, but people can use crypto to pay and the crypto value is pegged at the current rate of trade on an exchange.
Bonus: I can use the crypto to go buy materials - never have to convert it to dollars.
So, the same thing that gives the Euro and Gold value (that people will take it trade for goods and services) is one of the components accounting for Bitcoin's valuation. The majority of Bitcoin's value at this point is likely speculation. However some percentage of the value is not derived from currency arbitrage or speculation.
Even if Bitcoin trade participating merchants do not trust the market valuation of Bitcoin enough to be willing to hold Bitcoin for very long after they accept it as part of a transaction (and therefor immediately convert it to USDs) it is still valued by the participating merchant in line with the trade. The same could be said for the value of the electronic ledger recordings created by credit cards. They are generally viewed to have around equivalent value to USDs. But, they are not a currency either.
You must feel very betrayed every year when you look at the inflation rate and the price increases...
And that's assuming 1.5%, some years are worse.
As long as that number stays the same (it isn't completely immutable) then BTC has real scarcity - making it a store of value, like gold. Throw in some additional properties that BTC has that gold does not, and an argument can be made that BTC is at least a decent value store.
Even at $100,000/BTC, Bitcoin would still have a ~1/5th of the market cap of all gold mined.
And in a truly universal sense - gold is made by stars. There are 100 billion stars. There's only one Satoshi in the known universe ;)
Gold on the other hand exists naturally in nature, and doesn't change based upon someone else's whim.
So no, BTC is not like gold.
So yeah, BTC is definitely not like gold, it’s way better.
Not saying this is easy but when the project is attacked like that, there will be some action.
Suppose a solar flare destroyed all existing digital equipment. What would a physical printout of a wallet be worth?
Suppose someone invents a way to turn lead into gold?
- it’s scarce by design, not by our belief in inability to find more of it on this planet or some asteroid
- it’s mobile, transporting gold is pain in the ass
- it’s secure, securing a little piece of paper is easier than deposit of gold
- it’s divisible, sividing gold into nanograms is not practical
- it has transaction platform built in
As for practical application of gold - it’s not where gold’s value is derived from.
And what if an asteroid hits the earth and we are all dead?
> it’s scarce by design, not by our belief in inability to find more of it on this planet or some asteroid
Scarcity is ironically one of the reasons gold is treasured. It's a natural scarcity not a man made scarcity.
> it’s mobile, transporting gold is pain in the ass.
Most gold exchanges don't require you to physically take gold home with you. It's stored in a vault and traded like any other security.
> it’s secure, securing a little piece of paper is easier than deposit of gold
BTC is not a piece of paper, and requires that only one person not be smart enough to break the BTC encryption model.
Gold can be stolen, but not all of it at once. But apparently BTC can be stolen too.
> it’s divisible, dividing gold into nanograms is not practical
Today's cost of gold to grams is $40.17. Practically speaking, we don't need nanograms to get to penny scale. A centigram of gold is good enough.
> it has a transaction model built in.
I hand you an ounce of gold. You give me $1000 dollars or something else in value that I want. That transaction method has been trusted for eons now.
As to your argument for the 51%, say, Visa comes out with a fork called VisaCoin(TM) that allows one to use a visa card to make transactions directly from VisaCoin (which is a BTC fork).
So that was two to ten people, maybe and what an ad slogan?
And here's the ad slogan: "When you go to the Fog City Diner in San Francisco, take your visa card, because they don't take BTC!"
Bitcoin is defined as having only 21 Million tokens in supply. Until the majority of people change their belief in that it will have that many.
The idea of what Gold is is controlled by 6 billion people.
You can do the same thing with Facebook or Twitter, but the value is not in the code or functionality, it really is in the network of people using it.
I think it is in everyone's favor to ignore and not give credence to things like these. There is an article on how Finland has been able to achieve this:
http://foreignpolicy.com/2017/03/01/why-is-finland-able-to-f...
For people wanting to see a video:
Current market capitalization in US dollars
Global money supply (broad) over $90.0 trillion [a]
US dollar money supply (M2) $13.8 trillion [b]
Euro money supply (M2) $13.2 trillion [c]
All coins and banknotes in circulation $7.6 trillion [d]
All gold ever mined $7.1 trillion [e]
Bitcoin under $0.2 trillion [f]
E.g. there's no even $100 billion in Bitcoin invested. If someone tries to sell, say, $1 billion worth (1%) of Bitcoin, the price falls down rapidly and they never going to get anything close to the billion $.
Not so with gold. The price will fall down too, but not so much. One can easily sell 1% of the world gold reserves, for price close (lower, but close) to it's market value.
Maybe one day Bitcoin will behave like gold, but certainly not today.
That's about 7 times more gold than the entire contents of the U.S. gold reserve of 8,134 metric tons of gold. I really don't understand why you think it would be easy to sell that much gold at the prevailing price.
Some random googling turned up about $100b/day of all gold changing hands worldwide, so you would have to sell it over a long period of time to avoid moving the price. If you were to try to keep your trades under say 0.5% of daily volume, or $500M, this would be the equivalent of trying to sell 1/14,000 of the total market cap each day, which would work out to about $12.5M/day if applied to bitcoin's market cap. Selling 0.5% of the daily volume of bitcoin would be more like $36.7M/day.
The reason for the difference in those numbers is that bitcoin turns over more of its market cap daily than gold, proportionally. So dollar for dollar, of course $1B affects bitcoin more than gold, but in terms of turning over 1% of the market cap the data suggests this might actually be easier in bitcoin.
The practical utility of Bitcoin represents only a very small fraction of its price.
The price of bitcoin has climbed more than tenfold in a year - so what is causing this huge increase in demand? Compared to a year ago, are there 10 times as many drugs being purchased on the darknet with bitcoin? No. Are there 10 times as many Chinese people trying to get their money out of China? No. If anything, the utility of bitcoin has diminished as the transaction cost has risen.
The only reasonable explanation is that most people are buying bitcoin simply to sell at a higher price later. In that regard it's the same as gold, but also the same as every bubble asset in history.
But I really can’t see how this is not just an instrument for some people to get very rich in a very short amount of time on the back of others.
Can it reach 100k? Absolutely. 1M? Who knows. 10M/BTC? Someone on Reddit said it will get close. But in the end I do think it will be remembered as a global mania instead of the creation of a new asset class.
I do believe in block chain and the value of crypto currency in general, but I just don’t see how BTC will be the winning asset in the end, if anything Etherum has a lot more solid foundation and is a lot more scalable technically.
If you can see value in decentralized cryptocurrencies, I think you can make the mental leap for the case of bitcoin.
https://mobile.twitter.com/bitfinexed (One of the people monitoring the situation)
https://np.reddit.com/r/btc/comments/7g5yml/my_investigation... (Some more info)
Make sure you are able to get out on time if needed. Investigate and decide for yourself. There is a lot of censoring and vote manipulation going on. I am not going to point fingers, but just that you are aware.
"I agree that if no one was able to get fiat in or out of Tether and USDT were still being issued that would be a huge problem. As it stands, however, institutional customers are able to deposit USD to Tether, and this is how USDT is being issued."
https://www.reddit.com/r/BitcoinMarkets/comments/7fsfwl/dail...
https://coinmarketcap.com/currencies/tether/
This on a daily pattern that looks like a step function. Where could this money possibly be coming from? Anonymous millionaires?
https://news.ycombinator.com/item?id=1532670
One of the posters says the feds will shut it down. I also thought this too. This remains one of the most enduring mysteries of Bitcoin to me. Why has the government taken such a hands off approach?
Various proposals to generate anonymity have been created, but with the sky high transaction costs none of them are currently viable.
This is diffrerent from file sharing because file sharing does not need a connection to the traditional financial system to be useful for most people.
Hilariously, this is the type of censorship that bitcoin solves.
The Fed swelled their balance sheet to 4.5trillion to bail out the banks. They can just electronically create money out of thin air. Everyone has a price, and when you have ultimate power you're in denial of 95%++ of people's human nature if you don't believe that power does not corrupt.
The fact that this type of fake news is so heavily proliferated and believed damages the ability of working institutions to keep their legitimacy.
Admittedly this is pretty far out in the realm of Wrongthink. Just look at Investopedia or an econ text book, and what they say about the question: does the Fed print money. They say no[1].
This is utterly, undeniably false. After the 2008 financial crisis the Fed's balance sheet ballooned to 4.5 trillion. How did they get that money? I can assure you that they did not (1) take out loans, or (2) produce goods or services at a profit. They electronically debit an account with money, and then go to Wall St and buy what no one else wanted to buy.
What did Gadaffi do? He tried to kick out their central bank that was imposed on them by the UN, by creating a gold standard.[2]
Most elite politicians are not nice people. They don't care about unjust wars, constitutional abuse or torture. They laugh like maniacs at Gadaffi's torture and death[3].
Fake News is just a useful term to disparage Wrongthink.
Every government in the history of this planet has a natural tendency towards cronyism and tyranny. If you take the headlines at face value and don't take the time to actually investigate the legitimacy of the facts then you are no different than any other subject of any other government in history, willingly subjugated to their ideas of what is right and wrong.
1 -
https://www.investopedia.com/ask/answers/082515/who-decides-... 2 - https://www.globalresearch.ca/hillary-emails-reveal-nato-kil...
Now, while I understand why a lot of people like the idea of a gold standard, or really holding static assets like gold or bitcoin themselves (for microeconomic reasons), to suggest that debt based central banking is bad because government are bad is a poor reason simply because of all the macroeconomic good that comes from it for societies. Economies are strong when people spend and invest money in them at higher nominal rates y/y without a decrease in purchasing power. Countries are able to maintain this by using these debt based systems to systematically devalue their currency (such as china has done) to grow their economy and in turn their tax base and public works. When the opposite is done, you get the types of problems japan had when other countries systematically devalued the yen as part of the plaza accord.
Additionally, should all assets be completely static where there is a greater incentive to hold rather than to trade (as is sometimes the case within the housing market, so people systematically fight against new housing as it only devalues their asset), you create a society where people only purchase the goods they need, and in turn those at the top can forever increase their wealth without having to invest it at the same rates they do now.
You should reconsider investigating this idea again.
The rest of your comment argues against deflation and commodity-money which is a straw man: I'm not arguing for that. I'm arguing for sound money controlled by our government, not international banking cartels that print money to give it to the banks (you could replace the Fed with a k-percent rule algorithm, 100% transparency, and 100% reserve banking).
Unfortunately, we've been riding on greater fools for so long that whatever generation is forced to do this is going to feel some financial hardship.
1. Crypto currency has potential that outweighs it's threat. Being able to transfer funds to people in other parts of the world is of interest to several government agencies. Perhaps crypto currency could help them do this better / more efficiently / whatever than today.
2. They will have to be extremely on top of the situation in order to be able to bring down a crypto currency.
3. Even if they kill one, three others will rise to take the place that it had.
That being said, I guess they could just ban crypto currency and perhaps most people would comply and the ones that were angered couldn't do much else than to watch it crumble.
Beyond Bitcoin, if crypto tokens begin to supplant public stocks (which I'm not saying they will), it would be incredibly foolish to cut off US citizens from those markets
There is no value created, it is just redistributed through rent-seeking. The US might hope that the redistribution goes in its favor if, as you say, more early adopters are in US rather than abroad.
The global effect of rent-seeking is that money gets pulled out of productive enterprises and into non-producing assets, lowering GDP.
Whether or not the easy access to money laundering channels makes up for the lost GDP or makes it worse, I am curious to see.
Because it's something like win-win-win for them?
1. They don't stifle a new technology for no reason.
2. They can always regulate it later, with the added bonus that they'll be able to stick a bunch of people they want to investigate with non-compliance charges for failing to register at the appropriate time. Similarly, how many people do you think are doing their taxes right on BTC? Easy arbitrary audit material if you can ever link their accounts.
3. I'm not sure the government is opposed to digital money that leaves an immutable, public record of cryptographic witnesses to transactions. The pseudo-anonymity isn't worth much against a pervasive global adversary watching all the pipes. They link the BTC to your actions, the keys to your machine, and you may as well have signed a confession.
So there's little incentive to act quickly and lots of incentive to give the radicals into BTC a chance to slip up on OPSEC.
Why would the US government want to ban Bitcoin anyway?
Bitcoin isn't particularly useful for laundering money because converting to/from fiat in any significant quantity usually requires a Bitcoin exchange and they follow proper AML/KYC procedures (those who don't get shut down.)
Bitcoin is not particularly associated to illicit activities any more so than cash: http://www.coindesk.com/bitcoin-economy-black-market-sin-rep...
Bitcoin helps the economy: $1+ billion has been invested in Bitcoin/cryptocurrency companies, creating thousands of jobs.
I would say many officials in the government understand Bitcoin is a technology with a lot of potential, and it would be stupid to outlaw it from the start. Watch the November 2013 US Senate hearing on Bitcoin if you want to get a sense of how some officials perceive it: https://www.washingtonpost.com/news/the-switch/wp/2013/11/18...
It's not quite that clear cut, but it's not too far off.
"During the video, the 1987 New Order song "True Faith"
He must have liked American Psycho
What was his motive? The Wikipedia doesn't seem to say
Presumably that's enough for people to want to hunt them down and coerce them into giving up private keys
https://bitslog.wordpress.com/2013/04/17/the-well-deserved-f...
This is a very strong claim, with precious little evidence. If you think this is impossible, you haven't met enough different kinds of people.
Happy to stay anonymous and leave a huge amount of money alone is an unusual mix, but the diversity of how people think should surprise no one.
Besides, Banksy does plenty of communication despite his supposed anonymity. It's not the anonymity; the total lack of communication from Satoshi is what makes me suspect he is dead. Even famously reclusive artists such as Bill Watterson don't cut off all communication with everyone.
You asked for an example: Jane Austen was anonymous until her death.
But that's all beside the point. You misunderstand my claim. I'm not claiming that it's unlikely for Satoshi to want to remain anonymous. What's unlikely is for a successful person to not talk to anyone, not a single other person in the world (as far as we know), about their success. Even people who value their privacy and anonymity very highly typically still want to communicate with other people somehow. Satoshi clearly had good communication skills, and knew how to communicate while remaining anonymous, so if you want to argue that he was some kind of loner recluse who rejected communication with other humans you'll have a tough time convincing me of that.
I think this is unlikely. I think it is much more likely that he deleted his keys -- on purpose. Despite the common "Bitcoin was created as a scam" sentiment, I see very little evidence of this. Satoshi appears to have just been a very idealistic person who thought that he was doing something useful. From the beginning he said that he shouldn't hang on to those initial coins because it would undermine the validity of the currency. Out of curiosity I've read through a fair amount of the original dev forum archives (I forget where they are, but I'm sure they are not hard to find -- last time I looked I found them right away). As far as I can tell, it is what it appears to be. Which is not, of course, to say that there aren't plenty of scammers in the Bitcoin world. It just seems that Satoshi wasn't one of them.
It will be interesting to see where it goes from here.
Last few bubbles had phases of
* hey, bitcoin is going up
* Bitcoin is going way up, This rate seems unsustainable.
* OK, this is fucking crazy now. (this lasts about a day)
* <POP!>
I'd say we're in the late stages of the second phase.
The crazy thing is that the intrinsic value of bitcoin has gone down recently (ie. you can't really use it for payments now), and yet the price still goes up. If BTC really is going to become an alternate value store to Gold, this makes total sense.
So there is no need to sell.
The conspiracy theorist in me wants to say that the best way to undermine trust in cryptocurrencies is to create market turmoil. This would not just undermine trust in cryptocurrency, but serve to embolden the Fed's 'Price Stability' justification.
It's called talking your book, which isn't illegal, but wildly disingenuous. FOMO is why the number keeps going up, these other reasons are window dressing for utter nonsense.
Expecting people to stop pointing out the obvious is optimistic at best.
If this is true then it seems to me that it's effectively become an inter-bank settlement protocol (which may not be that surprising or bad of an outcome given its inherent latency)
Do your own research if you're curious about it and don't want to feel left out. It's never too late to make an actual informed decision afterwards. I've seen so many otherwise intelligent people just keep dismissing Bitcoin and cryptocurrencies without even knowing how they actually work. Don't be those people.
Try to read some books about the actual technology that runs Bitcoin and other cryptocurrencies and THEN make a decision whether you think it's a scam or not. Even if you think you think it's a scam or a bubble or whatever, at least then you'll be actually making an independent judgment on a new piece of technology that nobody--including the inventor him/herself--fully understands.
I studied it for a while, and it lead me on to some more interesting topics, but the currency itself doesn't interest me.
Understanding Bitcoin to assess "whether it's a scam" makes about as much sense as learning about the mechanics of an electronic exchange to figure out whether it's a good idea to invest in Facebook.
On which blockchain, exactly? On the Ethereum Mainnet you can transact for a fraction of a cent USD and it'll typically be verified (mined into a block) within a minute (often faster).
On the Bitcoin chain you choose your own transaction fee, but if you're not keeping up with market rates your transaction might take quite a long time to be verified (again, mined into a block).
Why would I buy a pizza today, or a house, or an island, with BTC if in 6 months, that same BTC would be worth 10x.
Is there any reason it is up, other than speculation?
Edit: I should clarify. Bitfinex printed 95 million worth of tether in the last two days, and used it to buy btc. When your prices are denominated in Monopoly money, the sky is the limit.
https://www.reddit.com/r/BitcoinMarkets/comments/7fsfwl/dail...
Essentially, that means people will be losing money.
Sidenote: With all this talk about cryptocurrencies, I find it strange that Tether is the only coin whose volume exceeds its market cap; strange in the way that cryptocurrencies should be having way higher velocity rates IMO.
"To raise market cap. by 5B, you basically need to raise price by ~3% (%_delta = [(cap_delta / btc_count + current_price) / current_price - 1] * 100%). The total usd amount to change price by desired delta is pretty small, for BTC it is usually around 8M for 1% (easy to check)"
I've had more and more non-tech people asking me how they can buy some.
Of course, I had to sell it at $20...
Besides BTC has serious flaws in order to attract a critical mass. It is extremely unsustainable - for example buying a sandwich with BTC requires more energy than a house for an entire week. This is alone is just horrible, especially in times when we should be trying to save our planet and not waste energy for shits like this. Secondly with it's current volatility the people who own BTC are much much less likely to spend it somewhere, because of the hope of gaining more value. However if nobody is willing to spend their BTC then adoption will lack and eventually counter act on it's value.
Thirdly you can't really convert the value of BTC into hard cash and even if you could, before you'd finish converting a large amount of BTC into cash you'd have halved the price of the BTC as part of the exercise.
Overall the technology behind it is interesting, but BTC I honestly think will massively flop and the current hype comes from pure greed. Investors trying to convince the populus to buy into BTC so they can finally cash out, but the reality is that for the normal person BTC is literally too cryptic to jump on the train and tech savvy people know better that it's too late now. It's too volatile and anything can happen. You don't buy expensive assets which are so widely known that they are in the news every day. This is too late.. we just watch and wait for the burst.
On the other hand a BTC is literally just a made up hashsum which is not only extremely volatile on the markets, but could also very easily just physically disappear through loss, theft or just malfunction.
I don’t really like appeals to “inherent value,” except for assets that can be expected to be desirable to almost any individual in almost any conceivable scenario (like food). Even then, there is some level of social or “network” effect, because in order to trade food you need your trade partner to have confidence that your assets are genuine (e.g. it’s not fake cans of beans) and that there is some fundamental protection of property rights (e.g. you’re not going to trade your canned beans for their eggs, only to immediately steal back their eggs using the threat of force).
In that sense, all “inherent value” is just an abstraction based on your confidence in your ability to predict the future behavior of other humans, which isn’t so different than your decision today to trade fiat currency for cryptocurrency (or even to trade your labor for fiat currency, like most of us do in traditional jobs).
First of all, the industrial and jewelry value of gold is so far below the current market price, that if suddenly everybody decided that gold was only worth its utility value people holding gold would lose almost everything. The difference between 95% and 100% is really negligible.
Secondly, on power consumption, the whole "one transaction requires more energy than a house" is basically sophistry. Even if this number wasn't overstated, it's stated in a way that assumes that this is static, that buying a coffee costs a house worth of energy.
No matter whether you are a Bitcoin person or a Bitcoin cash person, the number of transactions per unit of energy in no way will stay the same. If you are a Bitcoin person, you will see the lightning network, which will increase transaction throughput by several orders of magnitude, and if you are a Bitcoin cash person, the block size will increase continuously, shoving more and more transactions per block.
Thirdly, the claim that you can't convert Bitcoin into cash is simply stunning. I use Gemini as an exchange daily, and I've witnessed $1 million being liquidated into US dollars in a couple of hours without much slippage.
Finally, I would ignore the final paragraph because this person has shown that he knows absolutely nothing about Bitcoin or cryptocurrency.
Earlier today:
https://news.ycombinator.com/item?id=15796503
Then two days ago for 9k:
https://news.ycombinator.com/item?id=15782222
https://news.ycombinator.com/item?id=15786821
https://news.ycombinator.com/item?id=15779933
at 7k: