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Thoughts on Bitcoin

blog.samaltman.com

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131–140 of 213 posts

Re: Thoughts on Bitcoin

#131

Post by sliverstorm »

ljd wrote: post #49
notdrunkatall wrote: post #13

I've been watching bitcoin since $30, bought at $80, and sold last night. I think that Stefan Molyneux (or however you spell it) is right on when he says that bitcoin is "a revolutionary protocol for information synchronization." However, it is by no means unique, and as we've seen, anyone can start their own bitcoin-type cryptocurrency. Apparently, the Canadian government is working on their own, and I don't think i…

I actually think the decentralized nature of bitcoin is what gives it all it's value. The fact that no bank can control it, inherently holds value. Currency manipulation is a really big problem right now, and knowing that you can buy a currency that won't be artificially controlled by it's issuer is an asset in itself. Having the currency centrally controlled again isn't special and it doesn't deviate enough from a c…

Honestly, bitcoin is less and less decentralized every day. Nobody runs bitcoin-qt anymore (it's all online wallets and lightweight clients), and mining power is steadily consolidating as the capital-intensive ASICs take over. The more widespread BTC adoption becomes, the more the network will be owned by those with the capital to purchase large quantities of GH/s

Re: Thoughts on Bitcoin

#132

Post by XorNot »

3pt14159 wrote: post #99
chad_oliver wrote: post #61

Earlier quoted context omitted.

I agree with the majority of your post, but I'm not convinced that inflation should be included in your list of bad things ("do you want inflation, meddling, and regulation?"). A moderate amount of inflation is a very good thing, and this isn't really even open to debate among economists. Its importance has been empirically and theoretically proven many times. Inflation is important because economics is all about cre…

Note that you are the one that calls my list bad, yet I specifically said that the uninformed should prefer this currency. Why should the uninformed prefer an inflationary currency? Because the uninformed are bad at accepting a decrease in demand of their market rate (their work performance would disproportionately decrease if given a 2% decrease in nominal wages). With that aside, let me give cover my complex though…

> When someone doesn't get a raise each month to make up for the expansion of the monetary supply he is effectively getting a pay cut, but he's been manipulated into not really noticing this.

You do realize that pretty much everyone understands this in some way? What do you think OWS was, in part, about? The middle-class of the US is well aware that their wages have decreased relative to productivity.

If deflation becomes the order of the day, every business lobby group will immediately switch their narrative to the importance of indexed-wages for all! (which they currently oppose) while all labor unions will switch to arguing a contract is a contract (which they definitely oppose - you can't sign away your rights, contract fairness etc.)

Re: Thoughts on Bitcoin

#133

Post by allochthon »

pbhjpbhj wrote: post #128
allochthon wrote: post #35

From the article: low transaction costs for worldwide commerce would still be great. I'm late to the whole bitcoin phenomenon, but here is what I really like about crypto-currencies. My US credit union (not even a commercial bank) charges me 40 dollars for an international wire transfer to Canada, and the bank on the other end will charge me 15 dollars. If this were done in bitcoin or a similar currency? Nothing, as…

I just looked at transaction costs on 2 exchanges and they were both at 0.2% for Kraken and BTC-E resp.

I might have been a little quick to jump to a conclusion, there. ;) But is there anything currently stopping someone from opening up an exchange whose only fees are an initial membership fee?

Re: Thoughts on Bitcoin

#134

Post by XorNot »

doki_pen wrote: post #23

I don't know why it is required that it is used in legitimate purchases. No one questions the value of gold, yet not many people use it to make purchases. I suspect bitcoins value will follow the same pattern as gold, once it is stable. When the world is full of uncertainty, it's value will rise. When things are steady, it's value will fall.

People question the value of gold all the time. That's why gold has a market price, and why people are commenting on it being way-overvalued and basically guaranteed to be in for a fall due to economic recovery - probably keyed to the Asian markets where a lot of money fled to gold.

The thing is, you don't follow commodity price news.

Re: Thoughts on Bitcoin

#135

Post by sliverstorm »

chad_oliver wrote: post #103
stretchwithme wrote: post #95

Earlier quoted context omitted.

Inflation is not essential. If people hide their money under mattresses, all that means is that they aren't competing to buy the available goods. Inputs for other ventures are cheaper. If the government weren't trying to re-inflate the asset bubble with cheap money, ventures that make more sense would be flourishing instead. Resources are not infinite. When someone accepts a piece of paper and just holds on to it ins…

You have a very good point, and I hadn't considered that aspect. However, if people defer their consumption, surely they'll also have less need to spend money, and thus less incentive to perform economically productive activities in order to earn money to spend? I'm sure people will be quite happy in the short term, but over longer periods (decades) there will be much less effort (not necessarily money) invested in e…

Yup, that's basically the problem with deflation. It stagnates the economy, and it is self-reinforcing. Called a deflationary spiral.

Re: Thoughts on Bitcoin

#136

Post by sliverstorm »

dlsx wrote: post #92
3pt14159 wrote: post #38

Earlier quoted context omitted.

I just put a sell order in for a percentage of my bitcoins because I think that there will be a pull back, but with that in mind I have the following response: Some of us don't want the help of a government. The revolutionary thing about Bitcoin is that it is a (nearly) zero trust method of transacting. The value is in the fact that there is no central bank to be afraid of. Most of the wealth my parents have lost in…

Your post is so true. My parents still have all their money tied in to their mortgage because the government said it's good for them. Maybe I don't value US currency, because I don't value my US government which is completely broken from head to toe. But, it isn't just an issue for people in the USA. It's a blessing for people who live in more oppressed region of the world. Look at what happened in Iceland and how th…

What do you mean, you don't pay fees? What fairy system are you talking about?

Re: Thoughts on Bitcoin

#137

Post by sliverstorm »

throwaway9848 wrote: post #100
sillysaurus2 wrote: post #42

Earlier quoted context omitted.

I wanted to buy right when it hit $850 a few days ago. I redeemed my $11k mutual fund, but the wire transfer took until Friday to go trough. By the time I was able to buy bitcoins, they were $1111 on coinbase. Bought anyway. Got 9.89BTC. Just lost $2k of that investment, according to the markets. Though it seems to be recovering somewhat. Ow. Anyway, I'm long on bitcoin. Maybe it will crash and I'll lose everything.…

For the love of god, be sensible - sell half on Monday and put it back into a traditional retirement investment. You'll still do well if BTC goes up. There is no reason to put 100% of your retirement funds into any single asset.

There is no reason...

What about insanity? ;)

Re: Thoughts on Bitcoin

#138

Post by sliverstorm »

sillysaurus2 wrote: post #48
nkuttler wrote: post #46

Earlier quoted context omitted.

I hope those 11k aren't all your savings. I have coins, am bullish long term, but buying bitcoin is speculation, and bitcoin can fall back to $0.01, even if I don't think it's likely.

It is indeed all my savings. But I was saving it anyway, so I won't be out in a doghouse if it vanishes. I guess I'm dumb, but at this stage in my life I'd rather have 9.89BTC than $11k. My theory is, everyone's expecting it to crash. So therefore it's more likely to do the opposite. Not much of a theory, but it seems to have been historically true.

everyone's expecting it to crash

I think your sample is too small. Old-world finance looks at the charts and expects a crash, but everyone who actually holds BTC seems to have a target price of $1M

Re: Thoughts on Bitcoin

#139

Post by sliverstorm »

Udo wrote: post #51
sillysaurus2 wrote: post #42

Earlier quoted context omitted.

I wanted to buy right when it hit $850 a few days ago. I redeemed my $11k mutual fund, but the wire transfer took until Friday to go trough. By the time I was able to buy bitcoins, they were $1111 on coinbase. Bought anyway. Got 9.89BTC. Just lost $2k of that investment, according to the markets. Though it seems to be recovering somewhat. Ow. Anyway, I'm long on bitcoin. Maybe it will crash and I'll lose everything.…

> Though it seems to be recovering somewhat. Ow. As with most investments, you need to think medium and long term. Barring some kind of final(!) crash, there isn't anywhere to go for BTC but up. Mainstream media and ordinary people are just now starting to talk about it. Stay with your investment, and don't sell before it at least doubled. If it crashes temporarily, that's fine too: chaos is a ladder. Within reasonab…

there isn't anywhere to go for BTC but up

Why? BTC is, for our purposes, infinitely divisible. BTC is just as useful when it is worth $1, as when it is worth $1B. I believe the bitcoin network has value, but 1BTC doesn't hold any more intrinsic value than 0.1BTC. They both leverage the same network.

Re: Thoughts on Bitcoin

#140

Post by XorNot »

ericb wrote: post #123
nayefc wrote: post #57

Earlier quoted context omitted.

A central authority needs to control money supply. This is crucial in all advanced economies. It has to be capped somehow (currently, it's obviously exploited), but a decentralised currency will never work.

Under what definition of won't work . Won't be adopted? Would cause economic calamity? I think this is a crucial distinction.

With nothing anchoring the value of the currency, it'll fluctuate wildly (and then crater to zero, and that'll be the end of it).

Regular currency is legally enforced by governments as the way to pay taxes, and settle debts in that currency - ergo you always need some or need to buying some, even if you don't want to deal in that currency day-to-day.

BTC does not have these things. The only thing holding it up is irrational speculation. Every person who holds bitcoin needs to sell it to a greater fool for a currency which does extinguish debts/tax obligations locally.

Consider: a population of people in the US dealing solely in BTC, and earning income, have to pay income tax. The IRS can assess income taxes as the relevant fraction of their income (easy enough: assess an approximate USD market wage that they have worked, declare they have to pay USD % of that in taxes). The effect would be BTC craters in North America, because every member of that population would have to somehow sell BTC for USD - only none of them hold USD, so they can't trade amongst each other, which means they need to convince someone else to accept BTC for USD (and I mean, why would you? You can't pay taxes with it which is why they're selling)?

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