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Bitcoin and cryptocurrency prices have fallen sharply over the last few days

forbes.com

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Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#81

Post by everybodyknows »

basejumping wrote: post #25
unhashable wrote: post #10

It's a common misconception that Bitcoin is a safe haven. It's not. Not even Gold is a safe haven during a liquidity crisis. In sharp downturns, cash is king. Think of Bitcoin and Gold as call options on the entire global monetary system. If Govs become insolvent, Bitcoin and Gold is there. If the masses lose faith in central banks, Bitcoin and Gold is there. If central banks debase currencies too quickly, Bitcoin an…

Why is cash king?

More generally, all tradeable/redeemable issueance of the sovereign are royal peers: cash, treasury bonds/notes/paper, US savings bonds series I/EE, even agency bonds.

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#82

Post by duskwuff »

glofish wrote: post #39
unhashable wrote: post #33

Earlier quoted context omitted.

This is another misconception. Gold can be held, yes. It also is expensive to verify, transport, and protect. This has proved problematic for holders of the past. A paper system had to be built on top of Gold, which severely diluted the value proposition as gold was confiscated and stockpiled centrally. Practically speaking, very few individuals hold gold and the utility of doing so is limited when you consider how l…

> This is another misconception. Care to elaborate on what my misconception was? I never said that bitcoin is not an interesting concept on its own. Just that is ain't got what most people think or need when they talk about gold or money. Especially not in time of economic distress. Can you use bitcoin without the internet? Can you use bitcoin without someone else mining and being allowed to connect to these entities…

> Can you use bitcoin without the internet? Can you use bitcoin without someone else mining and being allowed to connect to these entities?

The answer to both is, simply, "no".

All cryptocurrencies (not just Bitcoin) are incredibly reliant on the availability of unrestricted communications between all participating parties, including miners. Where those communications break down, the cryptocurrency is likely to become unreliable or entirely unusable.

(As such, Bitcoin is an incredibly poor choice if you're planning for some sort of apocalyptic scenario -- it's likely to be one of the first things to stop working.)

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#83

Post by gchokov »

unhashable wrote: post #72
kaikai wrote: post #50

Earlier quoted context omitted.

You don't have to transport a heavy metal, instead all you have to do is ensure an electrical grid, fully functional internet access, and a distributed network of other people! I'm not sure that's any easier than carry around metal :P

I see: you’re concerned with a future where the concept of an internet ceases to exist? I’m afraid money will be the least of our problems then.

It's already happening with Russia and China having their own networks.

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#84

Post by duskwuff »

dragonwriter wrote: post #69
unhashable wrote: post #51

Earlier quoted context omitted.

To address your point more directly: many think that Bitcoin isn’t tangible because you have to trust that the network of full nodes are verifying transactions, and if they stop then Bitcoin ceases to exist. Full nodes have financial incentives to run and they do so today at a scale that rivals the internet. It’s not a favor to Bitcoin, it’s a business. They would only stop if the financial incentive ceased to exist.…

> You will not be able to spend your USD offline. USD is based on a network of centralized banks. You cannot spend your fiat without a computer asking permission from these centralized systems. Yes, I can, as long as I have it as physical currency, and regularly do. Admittedly, this relies on confidence of all participants that eventually systems (banking, etc.) which are as you describe will work or be replaced/reto…

Moreover, even if centralized banking stops functioning, individual banks can continue operations. This isn't true of Bitcoin -- if the network is partitioned, there is no mechanism for it to be resynchronized without massive rollbacks.

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#85

Post by Zaskoda »

unhashable wrote: post #10

It's a common misconception that Bitcoin is a safe haven. It's not. Not even Gold is a safe haven during a liquidity crisis. In sharp downturns, cash is king. Think of Bitcoin and Gold as call options on the entire global monetary system. If Govs become insolvent, Bitcoin and Gold is there. If the masses lose faith in central banks, Bitcoin and Gold is there. If central banks debase currencies too quickly, Bitcoin an…

I suspect that by this time next year Bitcoin will be seen as a safe haven. The events that are about to play out are exactly what Bitcoin was designed for.

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#86

Post by im3w1l »

unhashable wrote: post #10

It's a common misconception that Bitcoin is a safe haven. It's not. Not even Gold is a safe haven during a liquidity crisis. In sharp downturns, cash is king. Think of Bitcoin and Gold as call options on the entire global monetary system. If Govs become insolvent, Bitcoin and Gold is there. If the masses lose faith in central banks, Bitcoin and Gold is there. If central banks debase currencies too quickly, Bitcoin an…

Why is there a liquidity crisis?

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#87

Post by anon73044 »

Ididntdothis wrote: post #35
unhashable wrote: post #33

Earlier quoted context omitted.

This is another misconception. Gold can be held, yes. It also is expensive to verify, transport, and protect. This has proved problematic for holders of the past. A paper system had to be built on top of Gold, which severely diluted the value proposition as gold was confiscated and stockpiled centrally. Practically speaking, very few individuals hold gold and the utility of doing so is limited when you consider how l…

“Bitcoin let’s you store $1T USD of dollars in your head, transport it anywhere in the world, and there’s not a single thing anyone else can do about it.” As of now the $1T can also disappear and nobody will even notice.

This!

Bus factor and too many single points of failure. How many lost wallets are out there with a few hundred or thousands of coins from before Bitcoin hit $100?

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#88

Post by unhashable »

Ididntdothis wrote: post #78
unhashable wrote: post #73

Earlier quoted context omitted.

What do you mean it can disappear and nobody will even notice? I can think of a few things but I’d rather not assume. Can you spell it out so I can better reply?

Nothing is backing up bitcoin. Almost nobody is using it to pay for things. If bitcoin went away I don’t think the regular economy wouldn’t notice anything. Only speculators would notice.

Totally. Bitcoin is not a medium of exchange (cash). It’s not useful for payments. Bitcoin is currently a bet that digital scarcity will bring back the concept of saving (SoV) so that people don’t have to invest in equities just to protect their purchasing power. Only the people making this bet will be affected if Bitcoin fails. The monetary system will keep moving forward unaffected. If Bitcoin succeeds, eventually the price will slow down and it can be used for cash. That will have to occur many decades down the road, if it ever occurs.

As for backups, the Bitcoin ledger is likely the most durable dataset that has ever existed. Backups are made daily at every layer across the world and there is no central point of failure in the network.

Shutting down the Bitcoin network would take a world war, and even then the network would survive through backups and the will of network participants to bring it back.

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#89

Post by klntsky »

krapp wrote: post #9
vidanay wrote: post #7

Wait...aren't crypto currencies supposed to be the favored monetary instrument during times of crises?

Only to anarcho-capitalists and speculators. Most people don't mistrust regulated banking enough that a volatile, unregulated black market economy looks attractive, even in a crisis.

> even in a crisis

A crisis can just destroy regulated banking.

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