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MicroStrategy Adopts Bitcoin as Primary Treasury Reserve Asset

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Re: MicroStrategy Adopts Bitcoin as Primary Treasury Reserve Asset

#161

Post by dnautics »

mac01021 wrote: post #155
dnautics wrote: post #71

Earlier quoted context omitted.

What about government contracting? Is it a fair process to decide who builds a highway? The Fed's activity is what drives the government's ability to pay it's contractors.

Why conflate regulation of the money supply with the ability to hire contractors? If you want to increase the money supply, print some money and give it out. If you want to fund highway construction, figure out how much it will cost and then raise that amount of tax revenue to pay the builders.

That is a very naive view of how things work. (Though I agree that that is how things should work)

Re: MicroStrategy Adopts Bitcoin as Primary Treasury Reserve Asset

#162

Post by mac01021 »

dnautics wrote: post #161
mac01021 wrote: post #155

Earlier quoted context omitted.

Why conflate regulation of the money supply with the ability to hire contractors? If you want to increase the money supply, print some money and give it out. If you want to fund highway construction, figure out how much it will cost and then raise that amount of tax revenue to pay the builders.

That is a very naive view of how things work. (Though I agree that that is how things should work)

Well, we _are_ having a conversation that's all about how we think the system should work...

Re: MicroStrategy Adopts Bitcoin as Primary Treasury Reserve Asset

#163

Post by mac01021 »

mrfredward wrote: post #159
mac01021 wrote: post #148

Earlier quoted context omitted.

I don't see why it's unfortunate if there's an equally good tool that is more egalitarian. Congress could give the Fed the power to, rather than just buy bonds (or whatever it is they do) introduce money to the economy simply by giving everyone money. I understand that it is not exactly true that the rich are getting free money for nothing. But the whole reason we're talking about this here is that someone pointed ou…

>I'm totally open to the idea that someone will come along and explain to my why my idea for how the Fed should give everyone money is just not workable. Congress has this power, and can always use it. The fed doesn't have this power, and that's because a bunch of unelected bankers aren't supposed to be making political decisions about wealth distribution. Read up on the difference between fiscal stimulus and monetar…

Fiscal stimulus is when the state pays money that it already has (or that it borrows for the purpose) into the private sector so that private entities will have cash and engage in spending.

Monetary stimulus is when the central bank increases the supply of money in the economy to control the value of a unit of currency as measured relative to units of goods and services, which in theory can have similar effects on people's spending behavior.

Either can be done with any degree of fairness or unfairness. And neither necessarily has to be done by the mechanisms through which the world's governments have historically tended to do them.

I agree that I don't want a few unelected central bank officials making decisions about wealth distribution. That doesn't mean that congress can't specify a different mechanism for them to introduce money into the economy.

Re: MicroStrategy Adopts Bitcoin as Primary Treasury Reserve Asset

#164

Post by hyko »

xur17 wrote: post #138
hyko wrote: post #135

Earlier quoted context omitted.

The consensus protocol doesn’t help in removing either of these trust requirements? If I own the mechanism of root node discovery, I can mount an effective Sybil attack against a new network participant. The history of Bitcoin is full of hard and soft forks and changes to the rules. That’s why your original Bitcoin client wouldn’t even let you join the Bitcoin network now. The people in control of the network are in…

> That’s why your original Bitcoin client wouldn’t even let you join the Bitcoin network now. You can run whatever client you want. > If I own the mechanism of root node discovery, I can mount an effective Sybil attack against a new network participant. But you wouldn't be able to replicate a chain of blocks with the same order of magnitude of work behind them. And then, even if you could, all you'd be able to do is…

You can run whatever client you want...if it conforms to the design of the protocol.

you wouldn’t be able to replicate a chain of blocks with the same order of magnitude of work behind them...I grant you that, but does it matter? If the client can’t find the real network, how would they know what to expect? You and I would know, because we have a copy of (I hope) the real Bitcoin blockchain...but how do you acquire that knowledge without trusting an entity first?

all you’d be able to do is change history...wouldn’t that mean you could lay claim to whatever you wanted in the eyes of this poor client? Or just harness their hashing power.

Re: MicroStrategy Adopts Bitcoin as Primary Treasury Reserve Asset

#165

Post by sudosysgen »

betterunix2 wrote: post #154
sudosysgen wrote: post #152

Earlier quoted context omitted.

The difference between taxation and rate hikes is that taxes are generally progressive, while rate hikes being progressive or not depends on a lot of factors (but they can be). Taxation is a much more precise tool than rate hikes.

Again, the Fed's mission is to stabilize the value of money, and progressive tax is no better at accomplishing that objective than a flat tax. Progressive taxes may be something that people like you (and me) think are a good idea, but that is a political consideration, exactly the sort of thing the Fed is supposed to be immune to. As for taxes being "precise," that is an interesting claim. The US tax code is not even…

Taxes, as an instrument, are multiple orders of magnitude more precise than rate hikes. Whether it is implemented well or not is an implementation detail. As a matter of essence, taxation is more precise than control of the directive rate. It is possible to wield taxes in ways that create confusing effects, or in a clear, concise way.

As for what the Fed is supposed to do, in practice, the Fed does much more than simply control the amount of money. The responsibility of the Fed is to control monetary policy and to maintain the health of the economy by doing so. Which is why they have such an important role, right now, in preventing the complete collapse of the US economy.

Re: MicroStrategy Adopts Bitcoin as Primary Treasury Reserve Asset

#166

Post by nostrademons »

verdverm wrote: post #147
nostrademons wrote: post #120

Earlier quoted context omitted.

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…

Were you a Bitcoin user? Yes, then you won't be a buyer this time around. I will not be putting money in, but I will happily make the bags of others lighter. Of another hype bubble materializes, I will be extracting more of the free money Bitcoin Network printed. In the states, using crypto is a taxable event. Until that is changed, they can only be stores of value, not currency, as I have no interest in recording ev…

I think a store of value is exactly what MicroStrategy (and other large institutional buyers of crypto) are looking for right now.

If it gets to the point where people will be calling on their Bitcoin reserves, the IRS will no longer be a going concern, at least one that anyone will be paying attention to. It's insurance against the collapse of governments, and so any government regulation other than ones affecting its storage & ownership aren't relevant.

Re: MicroStrategy Adopts Bitcoin as Primary Treasury Reserve Asset

#167

Post by dgudkov »

If a company like MicroStrategy starts investing in Bitcoin instead of reinvesting in own business it means it has no good ideas how to generate value as a company. In other words, it doesn't believe its own business can generate more revenue than Bitcoin trade.

They may be genius Bitcoin traders, but clearly they are no longer Business Intelligence visionaries as they once were. A famous company that now admits it has no future. That's how I see it.

Re: MicroStrategy Adopts Bitcoin as Primary Treasury Reserve Asset

#168

Post by f00zz »

nostrademons wrote: post #166
verdverm wrote: post #147

Earlier quoted context omitted.

Were you a Bitcoin user? Yes, then you won't be a buyer this time around. I will not be putting money in, but I will happily make the bags of others lighter. Of another hype bubble materializes, I will be extracting more of the free money Bitcoin Network printed. In the states, using crypto is a taxable event. Until that is changed, they can only be stores of value, not currency, as I have no interest in recording ev…

I think a store of value is exactly what MicroStrategy (and other large institutional buyers of crypto) are looking for right now. If it gets to the point where people will be calling on their Bitcoin reserves, the IRS will no longer be a going concern, at least one that anyone will be paying attention to. It's insurance against the collapse of governments, and so any government regulation other than ones affecting i…

Note that places where the local currency is actually collapsing aren't seeing much cryptocurrency adoption. In Argentina people just buy USD. In Zimbabwe people were using equities in the local stock market as hedge against inflation [1].

[1] https://www.bloomberg.com/news/articles/2020-07-06/for-zimba...

Re: MicroStrategy Adopts Bitcoin as Primary Treasury Reserve Asset

#169

Post by CryptoPunk »

beaner wrote: post #146
CryptoPunk wrote: post #144

Earlier quoted context omitted.

Because there is no market demand for it? Why would people pay thousands of dollars to transfer value? Value transfer will get less expensive with the proliferation of e-money, not more. Why would institutional players choose something so expensive?

Because it won't be expensive. Visa does something like $11 trillion in volume per year. Why does anybody use that if visa takes 1-2%? 1% of 11 trillion is 110 billion. With that amount of fee revenue you'd be able to secure the Bitcoin network 12,000 times over. So Bitcoin's security is able to grow by 1,000x and still cut prices relative to current popular providers by 12x. That's cheap, not expensive, and that wil…

Visa can charge those fees because are no alternatives to Visa. There are alternatives to Bitcoin. It doesn't have a network of hundreds of millions of accepting merchants spread all around the world, and never will, because it can't process a meaningful volume of transactions per second:

In contrast to Visa, which can process 3,000 transactions per second, Bitcoin can only process 3 per second.

Limited, even during peak demand, to 1/1000ths of Visa's average throughput, and 1/10,000ths of Visa's peak usage throughput, there is also no way Bitcoin can match Visa's $11 trillion volume.

Re: MicroStrategy Adopts Bitcoin as Primary Treasury Reserve Asset

#170

Post by bhaak »

tomputer wrote: post #111
bhaak wrote: post #83

Earlier quoted context omitted.

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…

OP already looked at Bitcoin but as that is moving slowly, I pointed them in another direction where more stuff is happening.

"Finance" is much more than just payments or store of value. Bitcoin is way behind Ethereum in that regard.

Of course, that doesn't matter if you don't think that decentralized finance makes sense to have.

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