MicroStrategy Adopts Bitcoin as Primary Treasury Reserve Asset • Hacker News Board

Re: MicroStrategy Adopts Bitcoin as Primary Treasury Reserve Asset

#111

Post by tomputer » Tue, Aug 11, 2020, 4:09 PM UTC

bhaak wrote: post #83

f00zz wrote: post #70

Earlier quoted context omitted.

> go through another bubble I don't know. I remember a few years ago when people on reddit would get excited when some cafe in Bratislava or wherever started accepting bitcoin, or when Steam started accepting bitcoin. Now cryptocurrencies seem... boring. I see lots of people talking about "store of value", but actual use of bitcoin for what it was intended seems to be decreasing. And now people who want to gamble can…

Don't look at Bitcoin. That hasn't changed much and not much interesting stuff (besides some drama) goes on there. Look at the Ethereum space. That's where most of the action is these days. DeFi (Decentralized Finance) is the current hype. The ETH2 phase 0 is projected to go live later this year (this time for real :-). 60% of Tether is an ERC20 token now. etc. Oh, and if you are interested in drama and have missed i…

> Don't look at Bitcoin. That hasn't changed much and not much interesting stuff (besides some drama) goes on there.

No. Look at Bitcoin first.

If Bitcoin fails altcoins will most certainly fail too. There is a reason why Bitcoin does not change that much, it has to be safe and trusted for storing value. It is not a "move fast and break things" project.

> Look at the Ethereum space. That's where most of the action is these days. DeFi (Decentralized Finance) is the current hype.

Bitcoin is DeFi (Decentralized Finance), if anything.

Re: MicroStrategy Adopts Bitcoin as Primary Treasury Reserve Asset

#112

Post by Ologn » Tue, Aug 11, 2020, 4:10 PM UTC

diegocerdan wrote: post #9

If most assets are still rising and breaking all time highs in a downturn economy what it really means is that the dollar is falling in a race to the bottom with all other fiat currencies. People avoid holding money by buying stocks and housing, not because of natural P/E ratio but forced by the continuously devaluation of cash. What "money" do you expect businesses want to hold in this situation?

Any commodity could be held.

If we look back half a century in the US, the commodity held was gold. Or rather, federal reserve notes redeemable for gold.

Gold makes a good currency as it has the properties of a commodity that makes a good currency. It is durable, divisible, uniform, and portable.

Federal reserve notes a half century ago were even more portable. You could mark the bills or write down serial numbers and make the bills difficult to use if stolen. If torn, the Federal Reserve would issue you new bills.

Money or currency historically has been a commodity that had the above mentioned properties (durable, divisible, uniform, portable), so that it is convenient for trade. Really any commodity could be held to store value, although some store value worse than others (perishable food is not exactly durable).

When you get into very large sums which you may want to transfer around the world in a split second, you run into more of a problem of course.

Re: MicroStrategy Adopts Bitcoin as Primary Treasury Reserve Asset

#113

Post by Proven » Tue, Aug 11, 2020, 4:12 PM UTC

Clueless fools. Bitcoin has no use case except speculation. Not exactly what a smart person would accumulate. It was silly at 100 bucks, because future use cases looked weak. Years later, each costs 11,100 and it's certain there won't be any use cases.

Fools keep piling in, I'll give you that.

Re: MicroStrategy Adopts Bitcoin as Primary Treasury Reserve Asset

#114

Post by this_user » Tue, Aug 11, 2020, 4:17 PM UTC

f00zz wrote: post #70

bhaak wrote: post #28

Earlier quoted context omitted.

I can totally believe how Bitcoin, Ethereum and the rest of the cryptocurrency space could go through another bubble (the last one was quite small if you compare it to the DotCom bubble and consider how much money is floating around nowadays). So I can imagine that this will turn into a big profit for them but the arguments are hilariously weak. Granted they will get a lot of PR out of it.

> go through another bubble I don't know. I remember a few years ago when people on reddit would get excited when some cafe in Bratislava or wherever started accepting bitcoin, or when Steam started accepting bitcoin. Now cryptocurrencies seem... boring. I see lots of people talking about "store of value", but actual use of bitcoin for what it was intended seems to be decreasing. And now people who want to gamble can…

All of the previous Bitcoin bubbles were driven by by new, larger group of people discovering it, and driving prices higher. Hence, any new bubble would require such a new group of buyers to appear. The question is whether that group even exists. Because in 2017 Bitcoin, arguably, went as mainstream as it could go with full-on regular MSM coverage, and most people seem to have heard about it by now. So, who is there to buy, and drive prices even higher as long as its utility stays the same?

Re: MicroStrategy Adopts Bitcoin as Primary Treasury Reserve Asset

#115

Post by betterunix2 » Tue, Aug 11, 2020, 4:21 PM UTC

lifty wrote: post #40

bhaak wrote: post #28

Earlier quoted context omitted.

I can totally believe how Bitcoin, Ethereum and the rest of the cryptocurrency space could go through another bubble (the last one was quite small if you compare it to the DotCom bubble and consider how much money is floating around nowadays). So I can imagine that this will turn into a big profit for them but the arguments are hilariously weak. Granted they will get a lot of PR out of it.

Hilariously weak? I think they lay out a reasonable argument considering the amount of debt around the world and the fragility of the economy. The big question is: will we have deflation or inflation? I am not sure, but I doubt the USG will let itself go bankrupt.

"I doubt the USG will let itself go bankrupt."

The federal government cannot go bankrupt. In theory the government can default on debts, but in reality there is never a situation where the government would be forced to do so (it is always due to political dysfunction) -- as others have stated the US government is able to issue more money whenever it needs to do so, and thus can always satisfy any monetary obligations (though there may be negative consequences to doing so). Even if the government does default on its debts, it would not truly be bankrupt, because bankruptcy means that some higher authority has stepped in to decide what will be repaid and how, but the federal government is the highest authority. Likewise for the states, which cannot issue money but which cannot actually go bankrupt (as they have the authority to decide what obligations to meet or to fail to meet), something which has become relevant due to the enormous cost of dealing with COVID.

Re: MicroStrategy Adopts Bitcoin as Primary Treasury Reserve Asset

#116

Post by hyko » Tue, Aug 11, 2020, 4:24 PM UTC

solotronics wrote: post #110

xondono wrote: post #104

Earlier quoted context omitted.

it has a permanently predictable rate of inflation It’s volatility would suggest otherwise. As many others have commented here an in other places, the fact that supply is predictable is not enough, demand is a factor too.

Inflation rate means the rate of issuance of new coin. Its price is related to whatever free market forces decide the price of anything scarce such as gold, silver, fiat currency, etc.

In economics the word inflation refers to the rate of change in the buying power of a currency.

What you’re talking about is the money supply (I guess the Bitcoin equivalent of M2) which in Bitcoin is for some reason increased at a hard coded (decreasing) rate.

Re: MicroStrategy Adopts Bitcoin as Primary Treasury Reserve Asset

#117

Post by nostrademons » Tue, Aug 11, 2020, 4:25 PM UTC

betterunix2 wrote: post #115

lifty wrote: post #40

Earlier quoted context omitted.

Hilariously weak? I think they lay out a reasonable argument considering the amount of debt around the world and the fragility of the economy. The big question is: will we have deflation or inflation? I am not sure, but I doubt the USG will let itself go bankrupt.

"I doubt the USG will let itself go bankrupt." The federal government cannot go bankrupt. In theory the government can default on debts, but in reality there is never a situation where the government would be forced to do so (it is always due to political dysfunction) -- as others have stated the US government is able to issue more money whenever it needs to do so, and thus can always satisfy any monetary obligations…

I think that was the grandparent's point. The USG can always issue more currency and inflate away the value of its debt. Doing so is preferable to default (and the fiscal & political crisis that would bring), and so they will. Thus, we're going to get more inflation.

Re: MicroStrategy Adopts Bitcoin as Primary Treasury Reserve Asset

#118

Post by robjan » Tue, Aug 11, 2020, 4:26 PM UTC

seibelj wrote: post #55

Decentralized Finance (DeFi) is the green shoots of a new and innovative financial system. It will break, it will be hacked, but longterm I believe this is the direction of finance - borderless, global, instant, peer to peer. Artificial barriers / borders / regulations simply don't matter when the mechanism for such transfers and investment are unstoppable and permission-less. Look at Compound Finance - $2 billion+ i…

The problem with Compound is that lenders and borrowers are rewarded with a utility token which is more valuable than the interest on the loans. This creates the opportunity where you can lend money and borrow money collateralised against that loan over and over again.

Re: MicroStrategy Adopts Bitcoin as Primary Treasury Reserve Asset

#119

Post by take_a_breath » Tue, Aug 11, 2020, 4:27 PM UTC

jcranmer wrote: post #106

bradstewart wrote: post #54

Earlier quoted context omitted.

Some assets are indivisible, so increasing value makes it unaffordable. You can't buy a fraction of a house. For things like stocks, if the increased value is driven by inflation, you get less for your money. So it takes more money to store the same amount of value there.

> You can't buy a fraction of a house. Isn't that basically what a REIT is? It's also possible to enter into joint ownership of a property. Roommates are also kind of like acquiring a fraction of a house.

==Roommates are also kind of like acquiring a fraction of a house.==

Unless you rent, in which case you are acquiring a fraction of the liability without acquiring any house.

Re: MicroStrategy Adopts Bitcoin as Primary Treasury Reserve Asset

#120

Post by nostrademons » Tue, Aug 11, 2020, 4:30 PM UTC

this_user wrote: post #114

f00zz wrote: post #70

Earlier quoted context omitted.

> go through another bubble I don't know. I remember a few years ago when people on reddit would get excited when some cafe in Bratislava or wherever started accepting bitcoin, or when Steam started accepting bitcoin. Now cryptocurrencies seem... boring. I see lots of people talking about "store of value", but actual use of bitcoin for what it was intended seems to be decreasing. And now people who want to gamble can…

All of the previous Bitcoin bubbles were driven by by new, larger group of people discovering it, and driving prices higher. Hence, any new bubble would require such a new group of buyers to appear. The question is whether that group even exists. Because in 2017 Bitcoin, arguably, went as mainstream as it could go with full-on regular MSM coverage, and most people seem to have heard about it by now. So, who is there…

Do you use Bitcoin? No? Then you're part of the group of new buyers.

Don't think you ever would? Opinions can change rapidly when you're struggling to buy food.The article's thesis isn't really that the utility of Bitcoin will increase, it's that the utility of the dollar (its primary competition) will decrease. If your dollars will be worth half tomorrow, it's a no-brainer to get rid of them ASAP and put your money in a currency that isn't being printed rapidly.