The Wealthy Are Hoarding $10B of Bitcoin in Bunkers • Hacker News Board

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

#301

Post by nerfhammer » Wed, May 09, 2018, 5:03 PM UTC

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…

the difference between saving and hoarding: https://www.quora.com/What-is-the-difference-between-saving-...

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

#302

Post by s73v3r_ » Wed, May 09, 2018, 5:06 PM UTC

kolinko wrote: post #222

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…

That's the theory. But the practice has shown that people who have Bitcoin spend it both on their living expenses, and on investments. Ergo, there must be a hole in your theory somewhere.

Has it? I seriously doubt this.

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

#303

Post by emodendroket » Wed, May 09, 2018, 5:06 PM UTC

imgabe wrote: post #298

emodendroket wrote: post #255

Earlier quoted context omitted.

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?

You're conflating properties of a payment processor like Visa, with properties of a currency. What's the equivalent of a charge back if I pay in cash for services that aren't rendered? It's called a "lawsuit", and there's no reason you couldn't use it if you paid with Bitcoin. With Bitcoin, unlike cash, there is also a public record that you did in fact pay, so the defendant couldn't lie and say you never paid when t…

That's true, but Bitcoin has been marketed as a replacement for both traditional currency and traditional payment processors, and certainly encourages people to keep way larger amounts in "cash" than they'd otherwise be comfortable with.

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

#304

Post by pbhjpbhj » Wed, May 09, 2018, 5:07 PM UTC

ryanmonroe wrote: post #289

eli_gottlieb wrote: post #281

Earlier quoted context omitted.

Jewelry looks pretty. Bitcoins don't.

Well, it only looks pretty to you if you're into that type of thing. I don't think it would be hard to find people who don't think gold jewelry looks good. My point is that the utility is entirely dependent on the subjective experience of the user.

There's plenty of stuff more expensive than gold, the reason gold is used is because it's shiny-bling.

People in the past have traded using seeds as fiat, but they wore shiny or coloured things like shells, polished stones, polished metals.

Human vision is attracted to shiny and brightly coloured artefacts, it's not entirely subjective. This is why you can trick a child to accept a shiny coin in exchange for a high value item, or currency note, or even for a higher value coin that has less polish.

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

#305

Post by s73v3r_ » Wed, May 09, 2018, 5:08 PM UTC

mkirklions wrote: post #184

jonknee wrote: post #177

Earlier quoted context omitted.

Yes, essential spending would happen. But why upgrade your car, or go out to eat, or go on a vacation, or all the other non-essential spending that powers our economy? Even a very small change in these behaviors has huge effects because one person's spending is another person's income.

> why upgrade your car, or go out to eat, or go on a vacation, or all the other non-essential spending that powers our economy? I find 0 of those good. Upgrading your car when you dont need to is wreckless spending. Maybe the Economy changes to become more conservative and less environmentally damaging. Going out to eat + vacations are unnecessary expenses. And btw, I completely doubt people are going to stop doing t…

"I find 0 of those good."

I'm sure you do. But the chef who makes their living cooking food doesn't. The person who makes their living running tours doesn't. And the people employed by both definitely don't.

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

#306

Post by wpietri » Wed, May 09, 2018, 5:09 PM UTC

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…

Yes, buying gold with the intention of selling it later is speculation. Buying anything with the intention of selling it later for a higher price is speculation.

If you were a jewelry-maker, I suppose you could call buying gold an investment.

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

#307

Post by pbhjpbhj » Wed, May 09, 2018, 5:10 PM UTC

acdha wrote: post #202

anonuser123456 wrote: post #148

Earlier quoted context omitted.

If contracts are written and priced in BTC, then it will behave like a commodity. Since supply is limited, it's value will fluctuate based on demand (e.g. the need to acquire bitcoin to satisfy the contract). I'm not saying this is actually happening, but when/if it does, it will work no differently than other currencies.

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.

You can have the contract in local currency, eg $, convert at the moment of payment and reduce the risk considerably.

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

#308

Post by s73v3r_ » Wed, May 09, 2018, 5:13 PM UTC

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.

Yeah, but right now, that money is locked in bank accounts, investment vehicles, etc, where the money can actually be used for stuff by others. With crypto, that money is locked away in "cold storage" where it's not available to do anything.

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

#309

Post by wpietri » Wed, May 09, 2018, 5:13 PM UTC

282883392 wrote: post #247

dragandj wrote: post #213

Earlier quoted context omitted.

> By that reasoning, investing in gold is also speculation. What else? However, gold has some utility as jewelry etc. Cryptocurrencies are (currently) pure speculation.

Crypto certainly has, if not more, at least the same utility than jewelry. Trust less, distributed ledgers--these aren't tulips.

They do not have the same utility. I can walk out of my house and find people deriving value from wearing jewelry. Trustless, distributed ledgers, on the other hand, not so much.

At the moment, Bitcoin's primary non-speculative use case is light financial crime: money laundering, capital control evasion, ransomware, buying various illegal stuff, ponzi schemes, etc. I agree that it's possible that one day trustless, distributed ledgers will deliver enormous amounts of value. But it's important to distinguish between delivered value and potential value.

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

#310

Post by wpietri » Wed, May 09, 2018, 5:16 PM UTC

ryanmonroe wrote: post #289

eli_gottlieb wrote: post #281

Earlier quoted context omitted.

Jewelry looks pretty. Bitcoins don't.

Well, it only looks pretty to you if you're into that type of thing. I don't think it would be hard to find people who don't think gold jewelry looks good. My point is that the utility is entirely dependent on the subjective experience of the user.

All value is defined in relation to a specific person. There's no movie, for example, that everybody likes. But that doesn't mean that entertaining people isn't valuable.