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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

#111

Post by mkirklions »

algo646464 wrote: post #96
mkirklions wrote: post #74

Earlier quoted context omitted.

> there are only a given number of total bitcoins in existence, which many (myself included) would argue makes it a poor currency. I have always question who says this. What makes you think deflation would be bad? My conspiracy is that governments require inflation to print themselves out of bad policy. Without government abilities to do this, the government performs poorly. Common citizens do not lose 2-4% of their…

A simple argument is as follows. Without inflation, i.e. fixed money supply, it would be impossible for a majority of loans to be repaid with interest, or give a positive return to investments. Note that this fact is independent of how well the borrower or business performs. (This is like a zero-sum game). So, it would be irrational for investors or lenders to part with their deflationary money, as the net profit is…

Bitcoin wouldnt be the currency for loans.

Bitcoin seems to be best for hording and spending. It holds value and can be transferred easy and cheap.

You can still have companies using currencies that incentivise loan/investing. Bitcoin currently exists and the loans keep being written.

I think as bitcoin grows its going to become big and boring. No 10x gains, not even 2x gains, like 10% swings over the course of a year. It wont be fun, it will be a store of value if you dont trust fiat. Right now I think its crazy undervalued which is causing the explosion of crypto. As BTC gets bigger, investment will start to look better as it provides better returns.

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

#112

Post by briandear »

richardknop wrote: post #73
frockington wrote: post #50

Earlier quoted context omitted.

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

Top 1%? They have more wealth than ever and keep accumulating more and more while the differences in wealth between everybody else end the top class keep widening. Look at Warren Buffer, one of the best investors in the world and he has hundred billion dollars just sitting around as he sees no good investment opportunities. Apple & other companies are hoarding money as well, much faster than they can spend it or inve…

What is Warren Buffet’s cash holdings? There’s a good chance they are in Treasuries or Money Market accounts which mean that money is being used by banks or the government to loan and invest. It isn’t like he has a room in his house filled with cash. The idea that cash is being hoarded is absurd. On deposit at a bank isn’t “hoarding” as the bank is able to make use of that capital to provide loans. Without the “rich” “hoarding” cash, banks have less capital which means it’s harder for you to get a car loan because the supply of money available to lend would be less.

These class-warfare arguments are interesting because rarely do they actually include the benefits to the financial system. These arguments also make the assumption that governments are more efficient at spending money than individuals, a claim that just isn’t proven out by facts. Dead-weight loss is a real thing. Warren Buffet spending a dollar means a dollar goes into the economy. The the State of California spending a dollar means that perhaps $0.75 actually goes into the economy.

What you seem to be arguing for is redistribution. But redistribution has deadweight losses as well as the unintended consequences of changing behavior. Perhaps a new business wouldn’t be started if taxation were at 75% — the reward wouldn’t be worth the risk, so the new economic activity from the new business wouldn’t happen at all — the associated jobs and tax revenue from that new venture would be zero.

Individuals with a million dollars to create a business would create more than a million dollars in economic activity because they’d ostensibly be producing a product or a service which would result in more economic benefit than the taxable value of that million dollars. If government taxed that money at 100%, and just completely redistributed it, that would result in $1 million - x% actually reaching the economy because government doesn’t create any new value and in fact, it reduces value because of unavoidable deadweight loss. Not to mention government taxing that money at 100% means that money wouldn’t likely be earned in the first place — why even bother?

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

#113

Post by gwbas1c »

mkirklions wrote: post #65
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.

Speak for yourself. I use bitcoin all the time for payments. Peer to peer using coinbase(email) for free and instant to friends. Shift card for free and instant at merchants. Bitcoin is beyond blockchain, companies have built products to trade BTC instantly, free, using the infrastructure already existing. The transaction time 'problem' doesnt really exist if you are into crypto, you know how to use it. And I dont tr…

Bitcoin is a fiat currency. It's backed by nothing. Encryption keys, and bits on a disk, have absolutely no value whatsoever.

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

#114

Post by jsutton »

Cthulhu_ wrote: post #36
will_brown wrote: post #27

Earlier quoted context omitted.

At what point are the miners/network considered the centralized institution? Are corporations considered “decentralized institutions” in the world of bitcoin enthusiasts? After all corporations are made up of decentralized shareholders that can vote for and change the directors. If that doesn’t fit...what about a credit union? Like bitcoin there are no “owners/shareholders” of credit unions they are simply comprised…

> At what point are the miners/network considered the centralized institution? Very much this; I'm fairly sure that if there is an organization that wants to direct / control btc, all they have to do is open up their (real money) wallet and get the majority mining capacity. If they first drop the value of BTC by selling or whatnot, miners / automatic miners will switch to more profitable currencies so the total hashe…

You make it sound so easy, just open up your wallet and get the majority mining capacity!

Tell me, how would someone with near-unlimited money go about doing that? Will they just conjure up the hardware needed to make 15 Trillion hashes per second?

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

#115

Post by anjc »

pavlov wrote: post #22

According to its proponents, Bitcoin is digital gold. (Interestingly it’s not an “electronic currency” anymore even though that was the original title of the 2008 whitepaper. I suppose Lightning Network or something is supposed to fix that with new transaction layers backed by the Bitcoin gold.) One aspect of gold’s historical value is that it’s traditionally recognized even in societies in collapse. I’ve never under…

If you're concerned about an EMP wiping out electronics systems worldwide then surely it'd be smarter to horde weapons, food and antibiotics, than Bitcoin OR gold.

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

#116

Post by oflannabhra »

Kiro wrote: post #88
chiefalchemist wrote: post #48

Bunkers? Like prepper bunkers? To survive what? If things go __that__ sideways, a hoard of crypto-currency will be the least of their worries. Apparently, even the financially wealthy can be common sense poor.

Alternatively, if things really go that sideways bitcoin will be the only valuable currency in the world.

In such a scenario, bitcoin will have no value. Localized disasters occur more frequently than one would expect, and in such disasters, a pure barter economy exists.

During the Bosnian War, things that became highly valuable were: bullets, liquor, antibiotics, lighters, and of course food [0]. Bitcoin, or any other currency, was the last thing on anyone’s mind.

[0] - http://www.shtfplan.com/emergency-preparedness/a-survival-q-...

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

#117

Post by snikeris »

jonknee wrote: post #82
mkirklions wrote: post #74

Earlier quoted context omitted.

> there are only a given number of total bitcoins in existence, which many (myself included) would argue makes it a poor currency. I have always question who says this. What makes you think deflation would be bad? My conspiracy is that governments require inflation to print themselves out of bad policy. Without government abilities to do this, the government performs poorly. Common citizens do not lose 2-4% of their…

> What makes you think deflation would be bad? Literally economics 101. Investment grinds to a halt and progress along with it.

Does investment really grind to a halt though? I'm thinking people would just demand a higher return on their investments before they parted with their cash. Recently, many countries had negative interest rates. So I suppose people were being incentivized to find "investments" that would return 0% on their money. Was that a good thing?

Also, inflation means everyone needs to be investors or the money they worked hard for evaporates. Why should we force Joe Sixpack into being an investor for the good of the economy? He should be able to focus on earning money from his trade without having to worry about investing due to inflation being forced upon him.

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

#118

Post by unit91 »

dota_fanatic wrote: post #106
unit91 wrote: post #71

This kind of debate by selective vocabulary is frustrating. If a poor or middle class person sits on the cash he has, he's "saving". If a wealthy person sits on the cash he has, he's "hoarding". Regardless of the topic at hand, let's be consistent enough in our terms to think and discuss the issues fairly and clearly without all the pejorative terms. If we have to resort to name-calling, we might not have a very good…

A person has 250 units of food sitting in a room, earns them at 2 units per day, and can consume them at 1 unit per day. They have saved 250 units such that if they stopped earning, they'll be alright. Another person has 2,500,000,000 units of food sitting in a room, earns them at 200,000 units per day, and can consume them at 100 units per day (not as filling but tastier let's say). They are... also only saving? C'm…

The problem with this line of thinking is it assumes a specific purpose, then name-calls based on that premise.

Maybe consumption isn't the goal and you're unaware of it. If I have as much food as a grocery store, I'm a hoarder because consumption is my goal. The grocery store isn't hoarding (or even saving) food because consumption isn't the goal. Retail sales are the goal.

Again, I'm not here to fight about economics. That wasn't my point. My point was ridicule isn't an argument. Calling someone a hoarder may make you feel good, but it isn't an argument.

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

#119

Post by gwbas1c »

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.

And what exactly is the investment in?

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

#120

Post by mkirklions »

jonknee wrote: post #78
mkirklions wrote: post #65

Earlier quoted context omitted.

Speak for yourself. I use bitcoin all the time for payments. Peer to peer using coinbase(email) for free and instant to friends. Shift card for free and instant at merchants. Bitcoin is beyond blockchain, companies have built products to trade BTC instantly, free, using the infrastructure already existing. The transaction time 'problem' doesnt really exist if you are into crypto, you know how to use it. And I dont tr…

> Historically Fiat currencies are awful Fiat has ushered in an absolutely amazing period of global growth that has made us unbelievably wealthy. But there is inflation, so why not go with the thing that has no history?

We've had gold, and it was a massive equalizer between major powers. If someone overspent, they had to be smarter until they regained their wealth.

Inflation has destroys savings for the masses who keeps cash more than investment. We've seen this a half dozen times in the last 100 years.

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