> 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 because that is the way the evolution of everything works—i.e., new ways of doing things and new things always have and always will replace old ways of doing things and old things. Since the way Bitcoin works is fixed, it won’t be able to evolve and I presume that a better alternative will be invented and pass it by. I see that as a risk. For those reasons the “limited supply” argument isn’t as true as it might appear—e.g., if Blackberries were in limited supply they still wouldn’t be worth much because they were replaced by competitors that were more advanced. I still don’t know the answer to why that isn’t a risk, but I would welcome my naïveté being corrected.
What I Think of Bitcoin
51–60 of 209 posts
Re: What I Think of Bitcoin
#52I offer no commentary on the actual content, but this is a truly horrible piece of writing - almost every sentence is clunky, poorly phrased, ungrammatical, or repetitive. I guess you don't need to be able to write decent prose to make $18B!
I wasn't originally planning on reading the article itself, but I had to skim it as a result of your comment just to see how bad it was for myself. In fact, I saw none of your suggested horribleness. Okay, I immediately don't like its rhetoric (the first paragraph basically implies the only reason not to like Bitcoin is sour grapes), but that's not bad writing. The only bad habit I see is the tendency to put a comma-…
Obviously my comment wasn't at all substantive (and thus richly deserves the downvotes it has received!), and clearly my opinion on this piece of writing isn't a popular one either, but surely it's hard to argue that...
"In fact I assume that better ones will come along and displace this one because that is the way the evolution of everything works—i.e., new ways of doing things and new things always have and always will replace old ways of doing things and old things."
...is not exactly vintage writing!
Re: What I Think of Bitcoin
#53MacroVoices #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 gains in BTC even if you haven't sold your shares.
Re: What I Think of Bitcoin
#54Earlier quoted context omitted.
Technically yes it is possible. Very, very unlikely though.
But who knows what we'll all be thinking when 2140 arrives?
Will that stop you from making a small allocation into Bitcoin? Any and all risks to bitcoin can be mitigated by portfolio sizing.
Re: What I Think of Bitcoin
#55Earlier quoted context omitted.
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…
I would agree, and this matches it to gold, also from Ray Dalio's perspective. Ray Dalio invested heavily into gold, and has since repeatedly press released that he had done so. It's the same characteristics as an MLM scheme.
Apples to oranges comparison: gold actually has a use, and its value is kept in check by that - it's tied to the physical world, to reality, and gold also wasn't/isn't an attempt to replace a transactional layer. I'm sure there are more differences that make it incomparable - certainly that pro-Bitcoiners will simply dismiss the differences saying they're unimportant, irrelevant.
Edit to add: qualitative comments rebutting my argument points would be greatly appreciated.
Re: What I Think of Bitcoin
#56This 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…
Ray isn't the only one, the market is pricing in zero risk of tether collapsing. It trades at no discount to real dollars, anybody with a Coinbase account could convert pretty high volumes of tether to real dollars. I really have no idea why, it seems sketchy.
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.
Re: What I Think of Bitcoin
#57Bitcoin will be gold-like store of value because people think it is like gold and financialize it with ETFs and a futures market.
However should we change our mind and instead start thinking some other cryptocurrency or maybe just a registration in some more or less distributed database is gold. Then that can become gold.
Or something like that?
Or maybe only gold is gold because it has been like that for a thousand years and throughout multiple empires and wars.
Re: What I Think of Bitcoin
#58This 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 drop in price will mean a sudden drop in mining power, which will mean a sudden drop in blocks being generated, which will mean a sudden drop in throughput, they might be even more eager to get out of it. Since transactions are already so extremely limited purely by choice of the people that took it over, sudden drops in price mean less utility while in practice sudden rises in price lead to lots of transactions for speculation, which also prices out any utility.
One transaction is now 4x the hard drive cost to store the entire chain (and users don't even need to store the chain at all).
Re: What I Think of Bitcoin
#59This 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…
The actual cost per transaction in Bitcoin is ~$150 now once you include both the direct transaction fee and the miner reward (inflation cost). It's an incredibly inefficient technology.
Re: What I Think of Bitcoin
#60Earlier 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 FUD What's the opposite of FUD, when people with a massive financial stake in something do nothing but tell everyone everything is great all the time, and never acknowledge any issues?