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What I Think of Bitcoin

bridgewater.com

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Re: What I Think of Bitcoin

#121

Post by ballofrubber »

dandanua wrote: post #42

I think it's time to put Bitcoin on the ignore list. You will never learn anything new about it, only the same stories: 1. It's a disastrous waste of energy resources. 2. HODLers like to compare it with gold and use it as a store of value. Because of this, they will constantly make a noise about it to raise its price. 3. No one will ever use it as an ordinary currency to buy simple things. Oh, you could buy Tesla wit…

1. You don't decide whats a waste of energy or not.

2. https://www.youtube.com/watch?v=xLYYh4aPXAM

3. Bitcoin Mining will make investments in renewable energy a lot less riskier as you can scale up as much as you want and always have a buyer. This drives out fossil fuel miners

4. Once bitcoins true price has been found, holders will spend to consume as much as they need/want to. Just like every other currency, except without the inherent need to spend(fixed issuance)

Re: What I Think of Bitcoin

#122

Post by kgkyltpgllg »

lalaland1125 wrote: post #119
kgkyltpgllg wrote: post #110

Earlier quoted context omitted.

But according to you there is no real liquidity in BTC/USDC, it's all in BTC/USDT. When you do that kind of buying, you need to go to the most liquid exchange (Binance), and that uses Tether.

The volume at coinbase is more than enough to support a $1.5 billion buy. Keep in mind that in relationship to tether, $1.5 billion is tiny. It's only 3 days of tether printing.

There is a big difference between two-way speculative volume and one way long term directional volume.

If AAPL trades $15 bil per day, that doesn't mean that you can easily buy $1 bil without huge market impact.

Re: What I Think of Bitcoin

#123

Post by kgkyltpgllg »

CyberDildonics wrote: post #70
lalaland1125 wrote: post #56

Earlier quoted context omitted.

Tether is almost certainly holding on to a couple billion real dollars to maintain the peg. This is very similar to how the Bank of England maintained an artificial value for the pound that wasn't broken until George Soros came around.

I think it is much more likely that tether is backed by bitcoin and is a ponzi scheme. Price rises seems to be driven heavily by more tether being created out of nothing, leading to another speculation and news frenzy, leading their btc being more valuable and safety from default despite creating more tether. If bitcoin goes down rapidly or people start exchanging lots of tether for bitcoin (because you can't actuall…

> more tether being created out of nothing

How do you know that? Can you see Tether USD bank account, and can confirm that no USD is deposited there when Tether is created?

Re: What I Think of Bitcoin

#124

Post by spiorf »

codeulike wrote: post #29
rybosworld wrote: post #27

Earlier quoted context omitted.

Technically yes it is possible. Very, very unlikely though.

But who knows what we'll all be thinking when 2140 arrives?

Block reward is now 6.25 btc, and fees reward is about 1.5 btc.

Every 4 years block reward halves, so in the next two halving block reward will be much less than fee reward, making it more and more irrelevant.

The 2140 is the date where it reaches 0, but it will be completely irrelevant in 12 years (3 more halving cycles).

Re: What I Think of Bitcoin

#125

Post by kgkyltpgllg »

CyberDildonics wrote: post #95
thebean11 wrote: post #75

Earlier quoted context omitted.

> If bitcoin goes down rapidly or people start exchanging lots of tether for bitcoin (because you can't actually get USD from it) I think it will end up exposed To be fair, this already happened. Bitcoin crashed from $22k to $4k, and this was at the height of tether worry.

That happened over the course of a year and I don't think there was a massive (enough) run on tether while it was low, since it didn't stay at that price for very long. There just isn't as much activity when bitcoin is low which I think also works in tether's favor. I think they do have significant btc backing them, just no USD. I actually wrote a comment about their dynamic two years ago when this happened. https://…

It stayed at $3k for 4 months in 2018.

Re: What I Think of Bitcoin

#126

Post by brendanmc6 »

CyberDildonics wrote: post #58
lalaland1125 wrote: post #24

This post should be mostly discounted because Ray doesn't really seem to be aware of the true risk of the Tether scam, the biggest component of and risk to Bitcoin's value. For those not aware, Tether is a "stable coin" that issues tokens that supposedly represent dollars and can be used as a medium of exchange. However, it's widely suspected that Tether is unbacked and printing fake dollars and even Tether itself ha…

Everyone who invests in bitcoin is breaking the cardinal rule of investing: don't invest in something you don't understand. If people realized that bitcoin's -average- transaction fee is around $25 USD because it is restricted (for no technical reason) to a few transactions per second (less throughput than 240p youtube videos) they would at least move on to other cryptocurrencies. If people realized that a sudden dro…

Totally false. Reduced mining power doesn't reduce the number of blocks being generated. Block mining PoW difficulty increases or decreases based on a running average of past block times[1]. This, given the block size limit, is the very mechanism that caps transaction throughput.

Lower prices have always led to less transaction volume which has always made it cheaper and easier to get your own transaction confirmed.

"don't invest in something you don't understand", can I ask that you don't spread FUD about something you don't understand?

[1] https://bitcoin.org/bitcoin.pdf

Re: What I Think of Bitcoin

#127

Post by samvher »

leereeves wrote: post #26
colincooke wrote: post #14

Earlier quoted context omitted.

I agree, there was a nice article in the economist about this concept (bitcoin as a store of value) [0]. More specialized than gold, investors have realized that bitcoin acts as a great hedge on uncertainty. When the market is uncertain to it's future (initial lockdowns for example) bitcoin goes up. It also goes up for less direct reasons (at least that I'm aware of). This makes it a less than ideal traditional store…

Another way of saying "gold-like asset" or "store of value" is that Bitcoin codifies wealth inequality in an algorithm with a rigidity similar to physical assets, creating mathematical obstacles to block democratic attempts at redistribution away from an elite class of early adopters. Thus "protecting wealth" from the rest of humanity. However profitable, useful, or entertaining one might find that as a fringe commod…

This is one part that I feel doesn't get talked about enough. A future where people move to bitcoin does extremely weird things to wealth distribution, where wealth is basically a function of the point in time of a person's switching to bitcoin more than anything else. I don't see how such a dissociation between wealth and effort/value/productivity could ever do good things for a society.

I'm also confused about how people think and talk about the market cap. My sense is that the total economic value of bitcoin holders can't be much more than what they have collectively put in as dollars minus what was spent on mining, which is only a fraction of the market cap. If it's more you get a weird kind of inflation where it's not a central bank printing money, but where "value" seems to spring out of thin air just because the masses are attracted to bitcoin (with FOMO as the main reason).

I can't quite wrap my head around all of this. I've been interested in blockchain for quite a while and have been keeping up with what's going on, but many things about the cryptocurrency market just don't make fundamental sense to me. (Another example - Ether basically being the denomination for transaction prices on the Ethereum network, meaning the higher it's priced, the less useful the network is, which seems like a conflict.)

I'll keep paying attention and see if I can learn a thing or two about real world (irrational?) economics.

Re: What I Think of Bitcoin

#128

Post by 55873445216111 »

gaff33 wrote: post #102
thesausageking wrote: post #34

Earlier quoted context omitted.

Tether FUD always returns when there's an influx of a lot newcomers to Bitcoin. It's been debunked over and over. Here's one by Nic Carter that explains why these "takedowns" are completely wrong: https://medium.com/@nic__carter/assessing-bitcoins-liquidity...

Tether fails bond pricing 101. If you have an IOU from the US government for $100 it's worth about $99 on the open market. If you have an IOU from a highly rated US company (e.g. Ford) for $100 you'd expect it to be worth about $94. Yet we're somehow supposed to believe than an equivalent IOU from tether is worth more?! Oh and the US Government and Ford will probably pay you some form of interest if you hold it long…

I think the premium is a "convenience fee" people are currently willing to pay.

Re: What I Think of Bitcoin

#129

Post by playingchanges »

kaycebasques wrote: post #53

MacroVoices #255 with Mike Green discussed another regulatory threat not mentioned in the Bridgewater post. Governments don't have to ban BTC outright. They have other tools for making it wildly unattractive to hold. I can't remember the details but they discussed a scenario where the US government classifies BTC as a commodity and requires K-1 style taxation. That would mean that you would have to pay taxes on any g…

Mike Green is one of the most interesting thinkers in the finance space. His work on passive indexation is fascinating.

Re: What I Think of Bitcoin

#130

Post by coinward »

lalaland1125 wrote: post #24

This post should be mostly discounted because Ray doesn't really seem to be aware of the true risk of the Tether scam, the biggest component of and risk to Bitcoin's value. For those not aware, Tether is a "stable coin" that issues tokens that supposedly represent dollars and can be used as a medium of exchange. However, it's widely suspected that Tether is unbacked and printing fake dollars and even Tether itself ha…

Ah, so when a central bank fiats, its sound economics. When crypto folks fiat, its a scam. I see.
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