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The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

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Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#41

Post by kajumix »

simias wrote: post #17

>the global currency of the future, that they need to buy some, and that he’s the man to safeguard it. Looks like in the future people hoard currency instead of spending and investing it then. That ought to be interesting. It also demonstrates the costs associated with non-reversible transactions, these vaults aren't storing gold ingots or priceless artifacts, just private keys. Banks around the world don't need to w…

>if you do hold the keys you better be absolutely paranoid with them because there's no plan B if they get compromised or destroyed

One could do multi-signature wallets with Bitcoin. So, for example, there could be three keys: one with you, one with your significant other, and one with a third party custodian, and it'd take, say, 2 out of 3 signatures to spend out of the wallet. It doesn't change the bearer nature of Bitcoin, which, some would argue, is a feature.

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#42

Post by chiefalchemist »

simias wrote: post #17

>the global currency of the future, that they need to buy some, and that he’s the man to safeguard it. Looks like in the future people hoard currency instead of spending and investing it then. That ought to be interesting. It also demonstrates the costs associated with non-reversible transactions, these vaults aren't storing gold ingots or priceless artifacts, just private keys. Banks around the world don't need to w…

> "Looks like in the future people hoard currency instead of spending and investing it then. That ought to be interesting."

That sounds like the current to me. Too much is locked up (in too few hands) instead of doing what currency should do. That is, reduce the friction of trade (i.e., goods, skills, etc.) Currency is a lubricant. It's no surprise things are drying up.

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#43

Post by TomMarius »

Clubber wrote: post #19
ddorian43 wrote: post #15

Earlier quoted context omitted.

FDIC insurance is low, what, 200K ?

Ya but you can have multiple accounts. I think that circumvents the limit. I think the limit was raised during the Bush administration, but not sure. >The standard deposit insurance amount is $250,000 per depositor, per FDIC-insured bank, per ownership category. https://www.fdic.gov/deposit/deposits/faq.html FWIW, I think it should definitely be higher than $250K. Probably $10M or so.

In my country, the limit is per natural person, not per bank account. Legal persons don't get it (they get a different one though - because of this, there is a very important distinction between business and personal account).

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#45

Post by piqalq »

TomMarius wrote: post #37
Cthulhu_ wrote: post #31

Earlier quoted context omitted.

That's because - and everyone but the uninformed or idealists know this - it's an investment product. It's simply not suitable as a currency, because one, inflation / instability, and two, it can only do what, a dozen transactions a second, if that? That's not nearly enough to become a viable currency.

What do you mean, what inflation?

I think he means the volatility/instability of it.

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#46

Post by acdha »

Cthulhu_ wrote: post #31
simias wrote: post #17

>the global currency of the future, that they need to buy some, and that he’s the man to safeguard it. Looks like in the future people hoard currency instead of spending and investing it then. That ought to be interesting. It also demonstrates the costs associated with non-reversible transactions, these vaults aren't storing gold ingots or priceless artifacts, just private keys. Banks around the world don't need to w…

That's because - and everyone but the uninformed or idealists know this - it's an investment product. It's simply not suitable as a currency, because one, inflation / instability, and two, it can only do what, a dozen transactions a second, if that? That's not nearly enough to become a viable currency.

Investments need to have intrinsic value. Under the new spin that bitcoin isn’t intended to be a currency, it makes little sense as an investment because there’s no value in any particular set of random numbers. If nobody is using it except for speculation, where’s the incentive to pay to keep that network running?

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#47

Post by Finnucane »

Clubber wrote: post #19
ddorian43 wrote: post #15

Earlier quoted context omitted.

FDIC insurance is low, what, 200K ?

Ya but you can have multiple accounts. I think that circumvents the limit. I think the limit was raised during the Bush administration, but not sure. >The standard deposit insurance amount is $250,000 per depositor, per FDIC-insured bank, per ownership category. https://www.fdic.gov/deposit/deposits/faq.html FWIW, I think it should definitely be higher than $250K. Probably $10M or so.

The problem with raising the insurance is that banks pay for it, and the FDIC maintains a fund for paying out claims. If the amount at risk was higher, fees would have to be higher and the FDIC would have to keep an enormous amount of cash on hand. Hell, even at that level, the FDIC was badly stressed during the 2008 crisis. The point of the FDIC anyway is not to protect rich people from all losses, but to prevent runs on banks and promote stability in the system. Most depositors don't have that much money.

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#49

Post by Balero »

TomMarius wrote: post #37
Cthulhu_ wrote: post #31

Earlier quoted context omitted.

That's because - and everyone but the uninformed or idealists know this - it's an investment product. It's simply not suitable as a currency, because one, inflation / instability, and two, it can only do what, a dozen transactions a second, if that? That's not nearly enough to become a viable currency.

What do you mean, what inflation?

Bitcoin has no inflation, there are only a given number of total bitcoins in existence, which many (myself included) would argue makes it a poor currency.

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#50

Post by frockington »

chiefalchemist wrote: post #42
simias wrote: post #17

>the global currency of the future, that they need to buy some, and that he’s the man to safeguard it. Looks like in the future people hoard currency instead of spending and investing it then. That ought to be interesting. It also demonstrates the costs associated with non-reversible transactions, these vaults aren't storing gold ingots or priceless artifacts, just private keys. Banks around the world don't need to w…

> "Looks like in the future people hoard currency instead of spending and investing it then. That ought to be interesting." That sounds like the current to me. Too much is locked up (in too few hands) instead of doing what currency should do. That is, reduce the friction of trade (i.e., goods, skills, etc.) Currency is a lubricant. It's no surprise things are drying up.

What group is hoarding currency? With interest rates and the global economy roaring low we've had an explosion of investing in the past few years. I don't know of one group of people that would benefit from holding cash in the present environment
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