What are your thoughts on BitCoin?

[innonimatu]

This has nothing to do with the monetization of debt. That monetization is not the thing feeding the speculative bubble, the suppression of interest rates on public debt is.

Basically governments are placing debt at zero interest with their central banks. Something they always said was impossible but now turns out to be both possible and unavoidable by them.

This suppression of the traditional rentier in public debt has the effect of shifting that portion of rent-seeking to other stuff. Hence speculative bubbles. Bitcoin happens to be one of those bubbles. Stock are in another bubble. Even the price of junk bonds is in a bubble (rates collapsed to near zero). The reason for all this is that the funds created and accumulated must be "invested" somewhere - there is pressure to do so, so many people live from that - and are chasing anything that looks like it might be profitable. It could be tulip bulbs if they got promoted as "growing asset". Ironically that would at least be biologically true!

Some people are saying that this will end in hyper-inflation. But this asset price inflation has not been translating to actual commodity price inflation, or wage inflation. Structurally it's exclusively an asset bubble. And indeed one cannot happen without the other, no commodity inflation without rising wages. The rising prices of some asset classes only indicates an increase in the desire to trade those assets. And the expected profit is not interest but price speculation - classic bubble behavior. Where it goes in the near future just cannot be reasoned.

 

[Moriarte]

Bitcoin is one of the dumbest ideas ever, waste resources needlessly to enforce artificial scarcity of a fictional thing... of course it had to have come from libertarians!

We have no idea where the current form came from, could have been North Korean communists, for all we know, or anyone else.

Any type of money functions that way, the stuff isn’t exactly new. Artificial scarcity of a fictional thing, which is collectively decided, usually by virtue of flow of time and dispersement, to be the medium of exchange. Invented way before first libertarian spread his wings. It’s the subtle differences, which make cryptocurrencies a progressive idea, when compared to good old fashioned high street money.

- Ability to program individual sums of money, so that unit of money itself acts as a resource and an arbiter simultaneously. That removes the need for lawyers, escrow accounts, etc. Code is the lawyer, Ethereum main net is the escrow. Substantial cost savings for users when compared to using vanilla money. And wide array of instruments to tinker with.

- Cryptocurrencies are not tied into national debt, directly. On the contrary: money are printed at an ever slowing rate. Once the initial world wide spread is complete, the scarcity perk will become the source of financial valuation stability, so much craved for in Zimbabwe, Turkey and other wonderful places, where imaginative financiers are channelling vast resources away from public good.

My prediction is, based on the time-proven reality of capitalistic concentration of capital - mega corporations will adopt these currencies and use them and manipulate them the same way governments are currently controlling traditional forms of money. Whether that is going to be the good thing, remains to be seen.

 

[innonimatu]

Mega corporations exist only under the shielding of governments, never make the mistake of thinking they are more powerful than them. The weak governments are simply the victims of gunboat diplomacy (overt or covert) to submit to the corporations of the stronger ones.

The fictional nature of bitcoin is new. Accounting for debt is fictional, you can argue, but it's not scarce. Quite the opposite. And what was used as currency and scarce was physical and restricted in the physical world, not by code.

The thing with code is that there are plenty of ways around it. Bitcoin has had its versions and will have more. Inevitably it will break down exactly because there is no central authority recognized, therefore one will eventually capture it and change it to profit. There is no authority to oppose such a move! The idea that bitcoin will be something stable would be comically naive if it wasn't being used to deceive people. I have no idea when but the ability to take it over was always there. So far the frauts, and there were many,were done in exchanges. The low-hanging fruit gets picked first.

 

[Samson]

Attack of the cryptidiots

James Howells from Newport, Wales, must have been living a tortured existence these last seven years or so, first popping up in 2013 when he told the BBC that he mistakenly chucked out a hard drive containing 7,500 Bitcoin that he'd obtained four years earlier for a steal.
Now that the $7.5m is worth almost $300m, Howells has resurfaced once more to insist that his local council allow him to excavate the tip in search of the mythical hard drive, offering the authority a cut of his fortune for the trouble. The council said no.
The thing here is that you really should not throw ewaste in landfill, so he probably deserves it.

In related news, a couple of days ago Britain's The Sun newspaper ran a yarn about a "computer programmer" who had 7,002 Bitcoin on an IronKey encrypted USB stick, which he received for an animation job in 2011.
Today that's worth $277m. The only problem is that he supposedly "lost the piece of paper on which he wrote his password" and the storage device allows for 10 attempts before rendering its contents irretrievable. He's on try number eight.
San Francisco resident Stefan Thomas told the red top: "I would just lay in bed and think about it. Then I'd go to the computer with some new strategy and it wouldn't work and I'd be desperate again."
He has placed the drive in "a secure facility" until some manner of cracking it comes to light "for my own sanity".
​

From the comments:

Which lead to the further thought - for now, stories about idiots losing a few bitcoins are just good for a laugh. But there aren't even that many bitcoin; supply tops out at only 21 million, and they don't all exist yet (Wiki claims ~18 million currently). In just this one story about two people who have actually made the news, over 0.06% of all bitcoin that can ever exist have been lost. How many more have been lost that we never hear about, or that no-one even knows have been lost because they haven't tried remembering their password recently? It's almost impossible that the amount lost would be less than at least 1-2%, and I wouldn't be at all surprised if it were actually well over 10%.
That's quite a significant amount of a "currency" to be deleted forever in the span of just 12 years. Perhaps the rate of loss will slow with bitcoin being worth more and people being more careful about it, but given how competent people tend to be with passwords and tech in general, probably not. Yet another problem real currencies don't have - whatever you might say about their pros and cons, you don't need to worry that someone might accidentally send a signficant portion of the world's sterling reserves to a landfill while tidying their desk.​

 

[EnglishEdward]

In the left corner, we have:

Team A....... world class mathematicians, hackers and quantum encryption specialists led by the USA NSA and Israeli Intelligence:

In the right corner, we have:

Team B....... a collection of Joe Sixbacks who wants to get rich without the effort of studying to be something useful like a dentist or engineer

It may even be that Team A won the contest years ago, but is keeping quiet about it,
as it doesn't want the terrorist underworld to move to more secure arrangements.

 

[stinkubus]

I'm not really into the tech end of this stuff, and I'm not going to sift through 80+ pages so apologies if this has been asked and answered, but I have yet to hear or read of any legitimate practical uses for these. Facilitation of illegal activity and speculation (i.e. literal gambling) seems to be the only raisons d'etre?

 

[Samson]

I'm not really into the tech end of this stuff, and I'm not going to sift through 80+ pages so apologies if this has been asked and answered, but I have yet to hear or read of any legitimate practical uses for these. Facilitation of illegal activity and speculation (i.e. literal gambling) seems to be the only raisons d'etre?

There are theoretical uses. You can use them for currency conversion, possibly if using localbitcoins you could actually make a profit on it. It does also make any payment over the internet possible without a trusted third party.

However, I would be amazed if less than 99.99% of all use of cryptocurrency is illegal activity and speculation.

 

[Farm Boy]

You know those carnival games where you toss in a quarter and hope it lands on a shelf of quarters in such a way that a moving bar pushes more than one quarter off the shelf and into your possession? You can buy drugs at those places too.

 

[Moriarte]

Mega corporations exist only under the shielding of governments, never make the mistake of thinking they are more powerful than them. The weak governments are simply the victims of gunboat diplomacy (overt or covert) to submit to the corporations of the stronger ones.

Does this fact prevent corporations and individuals from accumulating positions in crypto?

The thing with code is that there are plenty of ways around it. Bitcoin has had its versions and will have more. Inevitably it will break down exactly because there is no central authority recognized, therefore one will eventually capture it and change it to profit. There is no authority to oppose such a move! The idea that bitcoin will be something stable would be comically naive if it wasn't being used to deceive people. I have no idea when but the ability to take it over was always there. So far the frauts, and there were many,were done in exchanges. The low-hanging fruit gets picked first.

That’s an interesting argument. Lets say the entity “captures” bitcoin. Or, to be precise, buys out at least 51% of coins, becoming, de facto, the central authority on it. Why would such an entity pursue anything other than financial stability? Why would federal reserve, which controls USD, pursue destruction and dissolution of the most powerful currency on the planet? The answer is: it can, but it won’t. It’s just not in their interest to kill the holy cow. There is much more leverage and profit to be had in keeping USD alive when compared to destroying it for some dubious one off benefit. The same principle applies to bitcoin. Whether it remains decentralised or if it centralises eventually is irrelevant to it’s existence. The important factors are whether bitcoin, and other cryptos, keep innovating, including becoming eco-friendly. That will be the ultimate decider of their fate.

 

[amadeus]

I'm not really into the tech end of this stuff, and I'm not going to sift through 80+ pages so apologies if this has been asked and answered, but I have yet to hear or read of any legitimate practical uses for these. Facilitation of illegal activity and speculation (i.e. literal gambling) seems to be the only raisons d'etre?

Where I would find them useful in any situation is as a replacement for a hyperinflated currency provided there is the network infrastructure in place to handle transactions.

Disclosure: do not and have never had any cryptocurrency, nor do I think any sort of hyperinflation is going to happen in the rich countries.

 

[Samson]

Can you buy a mobile phone connection with bitcoin? That has to be the killer application, where people really want anonymity legally.

 

[innonimatu]

Can you buy a mobile phone connection with bitcoin? That has to be the killer application, where people really want anonymity legally.

You cannot have anonymity by buying stuff with a thing that by design tracks and announces every transaction made.

 

[Lexicus]

Mega corporations exist only under the shielding of governments, never make the mistake of thinking they are more powerful than them. The weak governments are simply the victims of gunboat diplomacy (overt or covert) to submit to the corporations of the stronger ones.

Corporations are really best thought of as miniature governments themselves, almost like "outposts" or colonies permitted to exist under the laws of the government which issues or validates the corporate charter.

Can you buy a mobile phone connection with bitcoin? That has to be the killer application, where people really want
anonymity legally.

Indeed, seems like a contradiction in terms. Regardless of whether you can get an anonymous phone contract, the phone itself is a surveillance device.

 

[Samson]

It is not really about bitcoin, but I found the best bitcoin scam site. I reckon they got someone to make it for them, and did not read it. The web developer needed the money, but wanted to warn people. This is live now, I do not want to post the link in case it helps their SEO.

 

[Birdjaguar]

I'm curious if anyone here has made any money speculating on bitcoin and if the amount was over a few thousand dollars. I haven't. But I also have never owned any crypto currency

 

[EnglishEdward]

Nor have I. I don't think there is any rational logic. One might just as well follow Maren Altman bitcoin Astrologer.

 

[Samson]

I'm curious if anyone here has made any money speculating on bitcoin and if the amount was over a few thousand dollars. I haven't. But I also have never owned any crypto currency

Since no one else said anything, is the closest we have got me? I bought some, and in the hour before I "sold" them, the price when up so much in that time that it gained more in value that the approximately 10% fees.

They are madly volatile. There are loads of forms of trading that require no identification and seem much more similar to casino gambling than financial speculation.

 

[Birdjaguar]

@Samson that link looks like a multi level marketing scheme. I hope you made a bunch of money though!

 

[Samson]

@Samson that link looks like a multi level marketing scheme. I hope you made a bunch of money though!

Which link? https://poloniex.com/ is about as legitimate as you get with cryptocurrency. I use it to convert bitcoin (which you can buy with fiat) to monero (which is anonymous).

If you mean the image, I think it is dodgier than that. I reckon it is a pay your money in, it looks great until you try and get it out and then nothing type scam.

 

[Birdjaguar]

I was referring to the poloniex link.