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

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

#151

Post by unhashable »

raverbashing wrote: post #125
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…

Yes I'm sure a 1T transaction in bitcoins won't trigger any suspicion by anyone and will not cause people to try and track the authors of the transaction. I'm also sure trying to cash that out is going to be as easy as taking money out of an ATM Unless you "cash out" in USDT (tether) or something similarly fake

Obviously $1T is meant to by hyperbole. Still, it’s not that outlandish.

$500M transferred for less than $400 on 7/29/19 - https://twitter.com/whale_alert/status/1155808847908544512?s...

There are many of these, and they are increasing.

Cashing out large sums is done over the counter, not through regular on/off ramps (as in your ATM example). Bitcoin is legal in the US, so I'm not sure how suspicion plays into it.

The rich play by different rules than you and I.

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

#152

Post by unhashable »

sparkie wrote: post #136
unhashable wrote: post #112

Earlier quoted context omitted.

This is an interesting scenario worth thinking through. If Bitcoin is forced to go split-brain temporarily, the network could coordinate to rejoin after the fact. Or, it could stay split in two. Regardless, infighting over which network was “the real Bitcoin” would ensue. See Bitcoin Cash and friends.

A "rejoin" isn't really possible. People who spent money on the "wrong" chain will simply have to live with the fact that their money is lost on the "right" chain, although it will probably not be an overnight thing. The two forks could exist for a long time after the split simultaneously, and many merchants may accept either form of payment. There will even be arbitrage between the two chains as profit can be made.…

So which is more likely: severe debasement of USD or the devolving of the global internet (ala an increase of firewall-ism by nation states)?

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

#153

Post by unhashable »

dragonwriter wrote: post #113
unhashable wrote: post #75

Earlier quoted context omitted.

Physical cash is not long for this world. We are rapidly moving towards always-online and fully-digital ledgers controlled by governments and central banks. You will not be able to get a hair cut unless you are an outstanding citizen and have your governments blessing. I wish this were a joke.

> Physical cash is not long for this world. Maybe, especially in some places, but even if that is the direction of digital financial transformation, the US is decades behind on most levels of that transformation and has cultural issues that that even if it was caught up on other aspects would make retirement of physical currency harder than it might be in other places.

This is wishful thinking.

I will be surprised if central banks don’t use the ushering in of the next monetary system as an excuse to go full-stop 100% digital.

I get the sense you think this is a far off and unlikely event. I think it’s much more likely and impending than that.

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

#154

Post by unhashable »

rkagerer wrote: post #137
nostrademons wrote: post #55

Earlier quoted context omitted.

Bitcoin is a call option on governments going down but the Internet staying up. Gold is a call option on everything going down and society reverting to how things were done in the 1600s. They reflect different threat models. If you believe that governments will get swept away by the global market-state, Bitcoin is your asset. If you believe that society will crumble and we'll be back to trading with other villages, g…

I like your thought provoking analogy. But why would a modern apocalypse look identical to the 1600's? I think some tidbits of technologies we've gained since then would be scrapped together by industrious survivors. What was used for "currency" in prior dark ages before the 1600's? I'm guessing it didn't pan out well for the guy who stockpiled cowrie shells in between.

Bingo.

Populations tend to the hardest money. Bitcoin cannot be undiscovered.

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

#155

Post by unhashable »

pas wrote: post #120
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…

> That is the staying power of scarcity via well known stock to flow ratios. Could you please explain this sentence? What is a stock to flow ratio? How/why is the well-knownness of it matters? How scarcity builds on top of this?

https://medium.com/@100trillionUSD/modeling-bitcoins-value-w...

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

#156

Post by unhashable »

duskwuff wrote: post #143
unhashable wrote: post #115

Earlier quoted context omitted.

Bitcoin would work similarly, but with far less trust in centralized institutions. Today, central banks acts as a final settlement later upon which the rest of the financial system is built (banks, credit, etc). This makes it impossible for the financial system to “shut off”. In a Bitcoin world, the main ledger would act as a final settlement layer, and local lightning networks act as the layers on top providing paym…

> In a Bitcoin world, the main ledger would act as a final settlement layer Keeping the "main ledger" functional requires miners to have reliable communications with each other; I believe Lightning nodes need an up-to-date view of the ledger as well. > All transactions would be batched and only get settled so often (once an hour, globally, for example). There is no mechanism in Bitcoin which would provide this functi…

Batching by definition consolidates the throughput to fewer transactions. That's what I mean with that (unprecise) example.

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

#157

Post by gerikson »

unhashable wrote: post #152
sparkie wrote: post #136

Earlier quoted context omitted.

A "rejoin" isn't really possible. People who spent money on the "wrong" chain will simply have to live with the fact that their money is lost on the "right" chain, although it will probably not be an overnight thing. The two forks could exist for a long time after the split simultaneously, and many merchants may accept either form of payment. There will even be arbitrage between the two chains as profit can be made.…

So which is more likely: severe debasement of USD or the devolving of the global internet (ala an increase of firewall-ism by nation states)?

In my opinion: the latter.

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

#158

Post by sparkie »

unhashable wrote: post #152
sparkie wrote: post #136

Earlier quoted context omitted.

A "rejoin" isn't really possible. People who spent money on the "wrong" chain will simply have to live with the fact that their money is lost on the "right" chain, although it will probably not be an overnight thing. The two forks could exist for a long time after the split simultaneously, and many merchants may accept either form of payment. There will even be arbitrage between the two chains as profit can be made.…

So which is more likely: severe debasement of USD or the devolving of the global internet (ala an increase of firewall-ism by nation states)?

The devolving of the internet to national intranets is likely, but I don't think it can be done to a big enough extent that it stops Bitcoin. It only takes information to leak through the firewall at one point of entry to make the firewall completely useless. Bitcoin transactions and blocks can be transmitted globally via sat, long and short distance radio, telephone, or the internet, bypassing the firewall through steganography and such. It seems like a futile task for states to attempt to filter it. The Bitcoin protocol will likely be available over encrypted and authenticated transport channels too, meaning that the nation state isn't going to be able to stop it without completely banning encrypted communication for which it has no back door.

That may be attempted, but then no technology company is going to start a business in the locations where this happens. The nations which attempt this will probably do more damage to their economies by enacting it than any damage that Bitcoin could possibly do. It will only take a couple of nations to declare themselves open for bitcoin business, to have economic success, for the rest of the world to realize that fighting against Bitcoin is a losing game.

Debasement of the USD will probably happen, but who knows when. My guess is it that it won't be a sudden event but will happen gradually over a few decades. You might measure USD to lose half of its value over a decade, but if you attempt to do the same for bitcoin, you might find that it has barely changed because "inflation" in bitcoin is negligible - ~7/8 of the total bitcoin supply has already been released, and the amount of "inflation" is decreasing over time.

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

#159

Post by nostrademons »

rkagerer wrote: post #137
nostrademons wrote: post #55

Earlier quoted context omitted.

Bitcoin is a call option on governments going down but the Internet staying up. Gold is a call option on everything going down and society reverting to how things were done in the 1600s. They reflect different threat models. If you believe that governments will get swept away by the global market-state, Bitcoin is your asset. If you believe that society will crumble and we'll be back to trading with other villages, g…

I like your thought provoking analogy. But why would a modern apocalypse look identical to the 1600's? I think some tidbits of technologies we've gained since then would be scrapped together by industrious survivors. What was used for "currency" in prior dark ages before the 1600's? I'm guessing it didn't pan out well for the guy who stockpiled cowrie shells in between.

That's why I chose the 1600s, alluding to a particular time period in history where gold happened to be the world standard. The Roman denarius was made out of silver; in the early middle ages most transactions were done using denarii that remained in circulation. The original English pound stirling was also silver (and weighed a pound, hence the name). Later in the middle ages the Byzantine gold solidus would become a major currency. In 1284 Venice issued the gold ducat and Britain simultaneously introduced the gold florin, which would usher in the gold standard that lasted until 1933 (though much everyday money in both the U.S. and Britain continued to be silver). The 1600s were sort of the heydey of gold as a currency, as large amounts coming from the conquest of the Americas began to circulate in Europe.

Elsewhere in the thread a lot of people say that gold has real tangible value. Sort of. It's tangible in that you can hold it in your hand and have physical possession of it. But "value" is always in the eye of the beholder - currencies are valuable if other people think they are valuable. With today's world, there's no guarantee that'd be gold - it could be silver, or cowrie shells, or bullets, or cigarettes, or Juul pods, or USB sticks, or n95 masks.

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

#160

Post by nostrademons »

unhashable wrote: post #154
rkagerer wrote: post #137

Earlier quoted context omitted.

I like your thought provoking analogy. But why would a modern apocalypse look identical to the 1600's? I think some tidbits of technologies we've gained since then would be scrapped together by industrious survivors. What was used for "currency" in prior dark ages before the 1600's? I'm guessing it didn't pan out well for the guy who stockpiled cowrie shells in between.

Bingo. Populations tend to the hardest money. Bitcoin cannot be undiscovered.

Actually I think populations tend to use the softest money that they have any confidence will be worth something tomorrow - that's Gresham's Law, "Bad money drives out good". And that's sorta happening with Bitcoin as well. It's use as a currency is declining, and people hoard it for price appreciation.

But you're right that Bitcoin cannot be undiscovered. It wouldn't surprise me if the dominant currency would be some other cryptocurrency with built-in inflation (maybe ETH, maybe XLM) that remained outside of the ability of some single entity to cause runaway inflation.

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