Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

bloomberg.com

Post reply on HN
Print view View original

211–220 of 405 posts

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

#211

Post by acdha »

blueprint wrote: post #98
acdha wrote: post #46

Earlier quoted context omitted.

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?

I'm not disagreeing with you on the distinction between an investment and a speculative position, but know that the value is in the confirmations of old transactions piled up which make it extremely difficult to retroactively mutate the ledger. Lots of people don't understand that well yet.

How much value does that really add? Traditional banking doesn’t have many problems with that and it’s moot for most people because the bank has to honor commitments even if they make an error.

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

#212

Post by lmm »

mkirklions wrote: post #74
Balero wrote: post #49

Earlier quoted context omitted.

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.

> 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…

At the most basic level the function of a currency is: I gave you this amount of goods and services today, you give me a ticket that's good for goods and services from you (or others) in the future. Ultimately those obligations need to gradually decay away to nothing if they're unused, just to stop someone hoarding for ages and then causing chaos when they call in their debts. "Hey, remember those 100 chickens you got from me 5 years ago, you owe me 90 chickens now" seems a lot more socially sustainable over the long term than the reverse.

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

#213

Post by dragandj »

charlesdm wrote: post #193
wpietri wrote: post #77

Earlier quoted context omitted.

I agree it's not an effective currency. But I disagree that it's an investment. I think the correct technical term is speculation. Investment is where you find something producing value in the real world and then buy and hold a piece of that. You're expecting a long stream of returns from the value being produced. Speculation is where you are making a bet on price movements in a way where economic productivity is irr…

By that reasoning, investing in gold is also speculation. Because it only has minimal industrial uses and most of its value comes from the fact that people say it has value. And a piece of art is not a productive asset either. Yet, it can and will have value. I don't think there is anything inherently wrong with that. I'm happy to invest in things that I believe are likely to go up in value, whether those are compani…

> By that reasoning, investing in gold is also speculation.

What else? However, gold has some utility as jewelry etc. Cryptocurrencies are (currently) pure speculation.

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

#214

Post by acdha »

hisabness wrote: post #197
blueprint wrote: post #98

Earlier quoted context omitted.

I'm not disagreeing with you on the distinction between an investment and a speculative position, but know that the value is in the confirmations of old transactions piled up which make it extremely difficult to retroactively mutate the ledger. Lots of people don't understand that well yet.

i think the value is also the ability to transfer value relatively quickly without having to sit at a bank for 30 minutes to do so.

Bitcoin transaction times aren’t much better - I see recent times in the 15-80 minute range on average, well in the thousands range earlier this year.

It’s also odd not to acknowledge that banks have had electronic transfers for decades. You wait seconds for a card transaction and almost every financial institution allows you to do transfers without visiting a physical office.

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

#215

Post by kolinko »

mkirklions wrote: post #74
Balero wrote: post #49

Earlier quoted context omitted.

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.

> 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…

I don't agree with people talking about a deflationary spiral (has it ever happened?), but there is another issue.

In a deflationary model, old money gets more and more valuable with time. In 50 years, it's possible that one Bitcoin will be worth 10M€.

What happens then when someone finds a stash of 100k BTC on their grandpa's attic? They can destabilise the whole economy.

With inflationary currencies it's never an issue - a money is either in circulation, or "evaporates". If you find your grand-grandfather's savings on the attic, they won't be worth too much (even if it's still a fortune). If you find your grand-grandfather's crypto-savings, you're a trillionaire, and a king of the world.

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

#216

Post by lmm »

21 wrote: post #210
misja111 wrote: post #89

Earlier quoted context omitted.

But there's a huge difference. With old fashioned "savings", the money was in a bank, which in turn would use it to invest it elsewhere. In other words, the money would still circulate in the economy. On the other hand, these bitcoins that are hoarded in a bunker are extracted from the economy as long as they are there. The implications are big: with the current trend of concentrating wealth to only a small fraction…

> On the other hand, these bitcoins that are hoarded in a bunker are extracted from the economy as long as they are there. These bitcoins were bought with cash, which is now sitting in the sellers "savings" account. The dollars did not disappear in thin air.

Those dollars continue to circulate, contributing to a functional dollar economy. Those bitcoins don't, so we don't have a functional bitcoin economy.

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

#217

Post by smokeyj »

21 wrote: post #203
simias wrote: post #179

Earlier quoted context omitted.

I completely agree with you that the concentration of wealth in the hands of a tiny portion of the population is a huge problem today, but don't deflationary cryptocurrencies make it objectively worse? At least if the current "1%" hoard dollars or euros in their mattress they slowly lose their wealth thanks to inflation. After a generation or two they'll have lost a significant share of their treasure. Therefore they…

> At least if the current "1%" hoard dollars or euros in their mattress they slowly lose their wealth thanks to inflation. Long story short, they don't.

Not only that, things you need like energy food and education aren’t included in core inflation.

So what happens is, the finance people use freshly printed money to buy up the things all the poor little people need. But let’s not call it speculation.

Crypto is a democratizing force in a corrupt and unaccountable world.

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

#218

Post by acdha »

mkirklions wrote: post #101
acdha wrote: post #30

Earlier quoted context omitted.

Those were speculative investments, not bank accounts. Nobody lost money in an FDIC insured account. The comparison is also dubious for another reason: everyone who did even the tiniest bit of diligence knew the mortgage and derivative markets were in a huge bubble. Phrases like “liar loan” were common, they had to invent new ways to rate derivatives which didn’t meet the traditional standards, etc. but so many peopl…

>the rules are completely different now because magic. Currency that isnt controlled by any government is different. Previously that was limited to gold only. Gold was hard to move and expensive to keep safe. Bitcoin can be sent for free using exchanges or on a piece of paper or about 1000 other ways. Easy to move gold is almost magic.

> Bitcoin can be sent for free using exchanges or on a piece of paper or about 1000 other ways.

What about the transaction fees? Someone has to pay for all of the mining hardware and electricity.

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

#219

Post by PKop »

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…

A solution I've heard to this problem is selling equity instead of debt.

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

#220

Post by clarkmoody »

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…

patriot insurrectionist

freedom fighter terrorist

interrogation torture

free trader smuggler

saver hoarder

We've been conditioned to respond to certain words in very specific ways. Politicians and media know this and will always use it to their advantage.

Post reply on HN