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What I Think of Bitcoin

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Re: What I Think of Bitcoin

#161

Post by specialist »

loceng wrote: post #12
learnstats2 wrote: post #6

Here Ray Dalio says he views Bitcoin as a gold-like asset. This is the first time I have felt that Bitcoin has some value: as a commodity that wealthy people put their wealth into when they have nothing better to do with it. People are not buying gold because they ever plan to use the gold.

The only, and it is a major problem with unavoidable pitfalls that shouldn't - can't be in our systems - is that Bitcoin is an MLM scheme and thus it is aligning people through financial gain, creating a religion of "HODLers" who are already a mob of varying levels of self-control and critical thinking. And as Dalio says, those who speak a counter-narrative to Bitcoin are rightfully "a few scared souls cowering in a…

What is money? Commodity, a measure of value, or a record of a debt. Sometimes all three.

In this article, Dalia has the commodity view towards money, gold, and by extension bitcoin. In this paradigm, cryptocurrencies are collectibles.

One great use case is as an escrow.

I'm dubious of the store of value use case. Bitcoin is just a currency. Whereas gold bullion is minted into coins, electricity is minted into bitcoins. The cost of production is only loosely correlated to the market (strike) price.

What gives money its value? A MMT-like theory is that fiat currencies have their well defined value because government accepts them to pay taxes.

I'm a bit more cynical. I think money, fiat currencies like the USA dollar, has it's value established at the point of a gun. That dollar represents the military might of the USA and that government's insistence that you agree.

What backs the value of bitcoin? Anything tangible? Nope. Just everyone's shared belief. Per Random Walk Down Wall Street, it's just castles in the sky. And like all bubbles, that belief system pops in a panic.

For rich people like Dalio, collectibles like gold, art, and real estate are probably a good idea. After the crash, someone somewhere will probably accept those collectibles, those assets, for payment or collateral.

In any scenario where gold or art will be used as collateral, who's gonna accept bitcoin?

Re: What I Think of Bitcoin

#162

Post by leereeves »

Sargos wrote: post #159
leereeves wrote: post #158

Earlier quoted context omitted.

The industrial revolution, computer revolution, and internet revolution brought real value to everyone's lives. Even people who didn't own Netscape or Google stock benefit from the Internet. Who would benefit from a Bitcoin revolution, other than early adopters? Ransomware authors, perhaps.

This comment feels eerily like what people said at the beginning of the internet. It's useless and hard and doesn't do anything we can't already do. "I already have a radio". https://www.youtube.com/watch?v=gipL_CEw-fk If you can't understand the value of cryptocurrencies that doesn't mean they are valueless. It'll be easier and more obvious to notice as these systems mature.

Also what people said about every fad that disappeared.

You didn't provide any examples of why someone might use it. And from what I see, the only hype about Bitcoin is its price.

Edit: Thank you both for the examples below. Please note that I am specifically talking about Bitcoin here. I didn't say, nor mean, that blockchain was a technology without potential, and the fact that none of the examples (as of now) show value in Bitcoin only strengthens my case, I think.

I suspect there are many cryptocurrencies to which my criticisms of Bitcoin don't apply, but those aren't the currencies under discussion in a thread about "What I Think of Bitcoin".

Re: What I Think of Bitcoin

#163

Post by FireBeyond »

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.

And yet we're lead to believe that Tether is at or very close to 1:1.

So Tether is depositing, USD, $6.5B A WEEK. Over the last year this would make them one of the richest entities in the world.

Oh wait, they haven't actually been audited, they won't tell anyone which institution/s actually hold this trove of funds, they've already lost more than a billion to people to who effectively said "yeah, we're not giving you back the money you gave us", and they're fighting and delaying multiple investigations and prosecutions of financial crimes.

Perhaps when Tether's USD holding exceed even Apple's (which, according to you, is less than a year away, at the absolute max), you'll realize that this is all a house of cards.

Re: What I Think of Bitcoin

#164

Post by chordalkeyboard »

jdmoreira wrote: post #65
leereeves wrote: post #26

Earlier quoted context omitted.

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…

I don’t understand why you are being downvoted because in my opinion you are right. Fiat money is the real trick that removes people from poverty and increases everyone's standard of living. This is really easy to understand from first principles. If the total value of the world increases and there is only a fixed amount of either gold or bitcoin, or any finite thing to represent it, it's obvious that whoever has tha…

> Fiat money is the real trick that removes people from poverty and increases everyone's standard of living.

This is actually completely backwards. Fiat money decreases standard of living by encouraging consumption and discouraging savings and investment.

> This is really easy to understand from first principles. If the total value of the world increases and there is only a fixed amount of either gold or bitcoin, or any finite thing to represent it, it's obvious that whoever has that asset today has to do nothing for it to grow. Just sit on it indefinitely and people will give you more value for the same amount.

Yes, as opposed to a depreciating currency where people continually give you less and less value for the same amount.

> On the other hand if the value of the world is represented in USD and the feds keep print more money, you can’t just sit on the money you have today and expect it to be worth more. You have to put it back in the value creation system for it to grow in value.

So people have to keep increasing their prices or they starve to death, how is this supposed to help the people with the least amount of money?

> Fiat currency is much better because you can print more money to keep up with the world's total value.

Thats why the poor stay poor and the rich keep getting richer. The rich own the assets, and the poor get these checks of decaying currency.

Re: What I Think of Bitcoin

#165

Post by Sargos »

leereeves wrote: post #162
Sargos wrote: post #159

Earlier quoted context omitted.

This comment feels eerily like what people said at the beginning of the internet. It's useless and hard and doesn't do anything we can't already do. "I already have a radio". https://www.youtube.com/watch?v=gipL_CEw-fk If you can't understand the value of cryptocurrencies that doesn't mean they are valueless. It'll be easier and more obvious to notice as these systems mature.

Also what people said about every fad that disappeared. You didn't provide any examples of why someone might use it. And from what I see, the only hype about Bitcoin is its price. Edit: Thank you both for the examples below. Please note that I am specifically talking about Bitcoin here. I didn't say, nor mean, that blockchain was a technology without potential, and the fact that none of the examples (as of now) show…

I know this is a Bitcoin article as it involves people very new and ancillary to the space but most people in this ecosystem work on Ethereum as it's where most things are happening so I'll use this as my starting point. A good and respectable source is https://consensys.net/blockchain-use-cases/

Blockchains have lots of use cases that various groups find important. Most people only know about money (e.g. Bitcoin) and that's not super useful for first worlders like us but is actually a necessity for a large portion of the world from third world and oppressive countries like Venezuela, Iran, etc. Having the ability to trust mathematics rather than fallible human institutions is indeed useful for a large portion of the population.

The rest is basically realizing we are in about the 1997 era of blockchains where things are hard, the big use cases are still being built out and designed and it's generally just a playground for bleeding edge nerds. But it's growing fast and DeFi (decentralized finance) didn't even exist until summer of last year.

Some things possible today:

-Financial stuff: decentralized lending, borrowing, programmable assets, no loss lotteries, gambling, etc.

-Art stuff: NFTs (non-fungible tokens) allowing for artists to sell their artwork online (look up Beeple), games making their items digital and tradable and usable in other games (God's Unchained, Axie Infinity), sharing of real world assets (RealT, any kind of physical asset on chain such as a car or house)

-Organizations. These are called DAOs (decentralized autonomous organizations) which allow for an organization to exist and make decisions with fully secure digital voting which allows for employee owned corporations, gaming/interest groups, or even small cities or countries to run their bureaucracies in a provably neutral, safe, and transparent manner.

-Enterprise stuff. The Baseline Protocol by EY is fairly hyped among corporate types (which don't get excited easily) and allows for business workflows/ERP to scale beyond a single enterprise. Microsoft, Coca Cola, etc are building some neat stuff on top of this.

Most of this stuff is complex enough to have at least a few paragraphs each so there's no way I can do it justice or make it sound less crazy from the outside but there's a ton of innovation going on with many different possibly world changing protocols and services being developed so while it might not seem like much now it will likely be something people use without even thinking in a few decades, just like the internet itself.

Re: What I Think of Bitcoin

#166

Post by samvher »

leereeves wrote: post #162
Sargos wrote: post #159

Earlier quoted context omitted.

This comment feels eerily like what people said at the beginning of the internet. It's useless and hard and doesn't do anything we can't already do. "I already have a radio". https://www.youtube.com/watch?v=gipL_CEw-fk If you can't understand the value of cryptocurrencies that doesn't mean they are valueless. It'll be easier and more obvious to notice as these systems mature.

Also what people said about every fad that disappeared. You didn't provide any examples of why someone might use it. And from what I see, the only hype about Bitcoin is its price. Edit: Thank you both for the examples below. Please note that I am specifically talking about Bitcoin here. I didn't say, nor mean, that blockchain was a technology without potential, and the fact that none of the examples (as of now) show…

Honestly Ethereum tech does get me quite interested. The idea of being able to create custom ledgers with tokens on the chain for bookkeeping that's maintained by an independent third party seems useful, as does the idea of smart contracts (dynamically & automatically executed transactions based on pre-defined conditions).

That would put the value of Ether at the value of being able to make transactions though - and at the moment transactions are clearly way too expensive for it to be particularly useful. The only value from these high transaction prices is extreme replication (many miners confirming the transaction) but I don't think anyone cares much about that level of security.

A heavily digitized financial system can also allow micro-transactions that can enable new things, e.g. to give a random example it would become much easier to pay $0.005 for every action you take on a website which could create entirely new business opportunities.

Edit to add - One way that I can imagine this developing is that "regular" currencies start moving their currencies onto a blockchain like Ethereum. I think that would make a lot of sense from a technology perspective and it would avoid the oddities I mentioned above (about wealth being mostly related to time of currency adoption). At that point the price of Ether would really just have to go to the value of making transactions and that doesn't make it look like a buy currently (at all).

Re: What I Think of Bitcoin

#167

Post by biolurker1 »

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…

First of all you didn't read the whole text, second you think you can discount the opinion of the mot successful hedge fund manager ever and the due diligence of his team! because you know better. Amazing dunning krugger effect at play. Go back and read the report and don't rush to make hate comments. He describes in the text those that are blinded.

Re: What I Think of Bitcoin

#168

Post by castlecrasher2 »

hjek wrote: post #152
jeffreyrogers wrote: post #137

Earlier quoted context omitted.

I worked at Bridgewater, and while there are things I disliked about it, this piece is not at all fair and does not capture what it is actually like to work there. Nathan Robinson, who is a self described socialist, is not someone I would go to for an objective assessment of a hedge fund's working conditions.

> Nathan Robinson, who is a self described socialist, is not someone I would go to for an objective assessment of a hedge fund's working conditions. I'm glad you didn't have a bad time working there. Yes, of course you can disagree with NR's conclusions, yet the article is mainly a review of Dalio's book alongside some quotes from employees. This "public hangings" statement is picked straight out of his Principles bo…

I'm not the one you responded to, but I vastly prefer a work environment where issues are transparent rather than hidden, and while coding is usually that way through processes like pull requests and code reviews it's like pulling teeth to get people's honest assessment of other characteristics.

I'm reading through Principles right now and while you bring up valid points that make people uncomfortable, I think given their continued success it's apparent that Bridgewater has been better off for it. I've unconsciously used some of the basics in my career, like being forward about criticism to my superiors and direct reports, and after a short period of discomfort I've always found the relationship better.

Re: What I Think of Bitcoin

#169

Post by joubert »

Sargos wrote: post #149
joubert wrote: post #51

> I should clarify what I said about its supply. Although Bitcoin is limited in supply, digital currencies are not limited in supply because new ones have come along and will continue to come along to compete so the supply of Bitcoin-like assets should, and competition will, play a role in determining Bitcoin and other cryptocurrency prices. In fact I assume that better ones will come along and displace this one beca…

It's taken decades for IPv6 to make inroads onto the internet. Network effects are extremely strong when it comes to protocols and it's not easy even after something better comes along.

Agreed. Double edged: as the new entrant network effects of incumbent(s) can be the wall you hit. Can also be your moat if you innovate the space into a new, different direction.

Re: What I Think of Bitcoin

#170

Post by rspeele »

at-fates-hands wrote: post #145
Jasper_ wrote: post #69

Earlier quoted context omitted.

According to Tether's own transparency page [0], there's $30 billion of USD sitting in some random bank, somewhere. No, they haven't told anybody where it is, and they have never released an audit. Yes, they are still delaying the NY Attorney General's investigation [1]. We know that at least $850 million has been seized and lost for good [2]. No, they don't report that on the transparency page. [0] https://wallet.te…

Honest question, If people are thinking of buying and selling BTC, should they start with another crypto currency until the Tether issue is resolved?

If Bitcoin goes down the altcoins go down too.
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