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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

#251

Post by zrobotics »

dragandj wrote: post #213
charlesdm wrote: post #193

Earlier quoted context omitted.

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.

I would argue that there is a good argument to be made that gold is a speculative investment. Look at how similar the scammy "buy gold now" ads are to the crypto ads. There is also a large contingent of the gold market that is holding it not to make money, but as a store of value for after government collapses. The preppers that buy gold aren't that much different than the crypto-libertarians that fear currency collapse/manipulation.

Never mind the fact that if widespread inflation or deflation occurs, the value of bitcoin will suffer as well.

Although bitcoin is a speculative investment, it can be argued to have some utility. Unfortunately, that utility mainly revolves around making purchases the government doesnt agree with.

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

#252

Post by ryanmonroe »

dragandj wrote: post #213
charlesdm wrote: post #193

Earlier quoted context omitted.

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.

Why do you say gold jewelry has utility? Because people are willing to pay for it? How does that distinguish gold jewelry from Bitcoins, which people are also willing to pay for?

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

#253

Post by algo646464 »

theseatoms wrote: post #227
algo646464 wrote: post #96

Earlier quoted context omitted.

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 deflationary currency regime would raises the bar for both investment and consumption. Investors would be choosier about speculative opportunities because the yield on the risk-free asset would be much, much higher. Consumers would still buy essentials, but they'd be extremely incentivized to hold currency rather than spend it. Regardless of whether or not a deflationary end-state is better or worse, it seems non-c…

> Investors would be choosier about speculative opportunities because the yield on the risk-free asset would be much, much higher.

It won't help how choosy investors are, or how well the economy performs. The money supply is fixed. So for someone to make 120 bitcoins from an investment of 100 bitcoins, someone else has to lose 20 bitcoins, which would be other investors, or the public (workers / consumers).

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

#254

Post by chiph »

acdha wrote: post #30
imgabe wrote: post #8

Earlier quoted context omitted.

I guess you weren't around in 2008. Oh remember those securitized mortgages we sold you? Yeah, they're worthless now. By the way we bought insurance on them becoming worthless, because we were pretty sure this would happen when we sold them to you.

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…

> Nobody lost money in an FDIC insured account.

This is true for you & I. But the wealthy aren't concerned about the FDIC insurance as their balances are far in excess of what would be covered by it. They follow the health of a bank very closely as they stand to lose a great deal of money if it becomes insolvent.

Many people think what prompted the sale of Wachovia to first Citibank (briefly .. sort of) then Wells Fargo for $15.1 billion [0] in October of 2008 was the implosion of their MBS holdings in their Golden West Financial acquisition. If you recall, Golden West had the "Pick a Pay" program, where borrowers could decide how much their mortgage payment would be (potentially even less than the interest portion, where the remaining amount was lumped back in to the balance)

What really happened was the wealthy depositors in Wachovia got wind that the bank was in trouble and initiated massive withdrawals, causing a run on the bank. If the sale to WF hadn't happened that weekend and restored confidence in the bank, Wachovia would likely have not opened their doors on the following Tuesday. Source: coworkers who were there at the time.

[0] https://dealbook.nytimes.com/2008/10/03/wells-fargo-to-merge...

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

#255

Post by emodendroket »

mr_spothawk wrote: post #239
emodendroket wrote: post #204

Earlier quoted context omitted.

What in the world are you talking about? There are a number of avenues you have to reverse fraudulent transactions with banking products that aren't available with BTC.

oh, that explains why nigerian scams dont work. /s

Tell me the last time a major bank shut down and its proprietors ran off with all the deposits. Or what is the BTC equivalent to a chargeback if services aren't rendered? What protection does it offer if someone steals your information and makes fraudulent purchases with your money?

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

#256

Post by titzer »

TeMPOraL wrote: post #234
21 wrote: post #223

Earlier quoted context omitted.

> After an EMP wipes out data centers and cell phone towers If such a thing happens on a large scale there will be hundred of millions of deaths. All major cities will simply collapse. See recent articles how London can only survive for 4 days without electricity, after that there will be no food. The modern society is incredibly fragile. Everything is just in time, there are no stocks or buffers. Bitcoins will be th…

Yes. Exactly. That's why more and more people getting involved in scams and get-rich-schemes on a platform with superlinear and unbounded energy upkeep is something that worries me deeply. Energy and climate is something that very well may break our society.

> Energy and climate is something that very well may break our society.

Unfortunately, if you run almost any process that humans are doing right now that has even 1% growth, in 1000 years, that's a factor of 21000x (.5% is 146x), and we're dead. So pretty much everything has to reach an S curve and stabilize, or we are totally F'd. Population, energy usage, land usage, food, trash, inflation, everything.

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

#257

Post by loco5niner »

empath75 wrote: post #225
kajumix wrote: post #127

The word 'hoarding' demonizes 'saving,' which in most Keynesian economies is considered leakage. It's really a question of values. Inflationary currencies encourage consumption; deflationary ones encourage savings. High consumption does increase demand, and apparently a faster growth in the economy. One could argue that this almost forced consumption for the sake of faster economic growth is what causes malinvestment…

> Inflationary currencies encourage consumption You mean "investment" > deflationary ones encourage savings I'm not sure why encouraging people to bury their wealth in the ground instead of doing something useful with it is something we want to be doing.

> I'm not sure why encouraging people to bury their wealth in the ground instead of doing something useful with it is something we want to be doing.

Savings is not "burying their wealth in the ground", it's building a safety net for the future. At least for everyday people. Most people would be better off doing that than blowing it on big screen tv's, boats, and cigarettes. If more people did that, society would be better off too.

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

#258

Post by acdha »

anonuser123456 wrote: post #241
acdha wrote: post #202

Earlier quoted context omitted.

Why would anyone choose to do that without some huge advantage to make up for the risks? The only reason seems to be ideological commitment and that doesn’t seem like an especially large market.

I would agree that for the general public there appears to be little upside (currently). For the fantastically wealthy that want to move large amounts of capital outside the purview of the tax man or regulators, it has tremendous upside. The same holds for illicit markets. Because those markets do not exist in isolation, the demand effect will spill over into the broader market (because arbitrage). I'm not a fan of B…

If you’re looking to evade taxes or otherwise commit serious crimes, why on earth would you do so using an immutable public ledger? Any mistake and you’ve gift-wrapped the case for the prosecution.

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

#259

Post by clarkmoody »

empath75 wrote: post #230
clarkmoody wrote: post #208

Inflationists / consumptionists have been demonizing savers and sound money since the 1700s, if not earlier. They enjoy the artificial boom induced through inflation of the money supply and then blame gold or speculation or "animal spirits" for the bust. They think that if we could only got back to the consumption levels of the boom, then we'd be "back on track." This never works, and the calls for consumption are us…

> Inflationists / consumptionists have been demonizing savers and sound money since the 1700s, if not earlier. And as we all know, it's been one long, slow economic collapse since the 17th century.

The long-term trend is caused by gains in productivity brought about by saving and investment with private property protections.

The boom-bust cycle is brought about by inflationary banking.

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

#260

Post by smallnamespace »

dragandj wrote: post #213
charlesdm wrote: post #193

Earlier quoted context omitted.

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.

> gold has some utility as jewelry

Gold's utility as jewelry stems from its high value as a precious metal.

It's circular reasoning though, since we're also saying that it's high value is underpinned by its use as jewelry.

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