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Bitcoin is a disaster

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Re: Bitcoin is a disaster

#501

Post by yunesj »

ineedasername wrote: post #449
yunesj wrote: post #402

Bitcoin's value prop isn't in its anonymity. Early adopters weren't enthusiastic about bitcoin because they hoped it would end fractional reserve banking or any other financial product. Rather, it was incredible to see the entire financial industry quickly rebuilt on top of sound money. I agree that small transactions and mining can be (and are being) improved, but not for the same reasons. It's silly to blame bitcoi…

I'm not anti-crypto, but I honestly don't know what you mean by "sound money". Could you elaborate?

Many, or even most people, believe that money must be controlled by the government for the economy to function. "Sound money" is money whose supply cannot be controlled by the government. Some further reading:

* https://fee.org/articles/what-do-we-mean-by-sound-money/

* https://mises.org/library/principle-sound-money

* https://www.aier.org/pertinent_category/sound-money-project/

Re: Bitcoin is a disaster

#502

Post by fernmyth »

pojzon wrote: post #367
pjlegato wrote: post #328

Earlier quoted context omitted.

The entire BTC market cap is minuscule -- about 600bn as of this writing. That seems like a lot, but compare it to Apple -- the market cap of just this one company's stock is currently ~2,238bn. The market cap of gold, US dollars, Euros, etc. are all many times more than Apple. The value of all BTC is a tiny microscopic speck compared to the amount of USD or gold in the world. This means (among other things) a few sm…

To give an another view: 600bn is more than gdp of majority of countries.

Market cap is a stock. GDP is a flow. Comparing the two is nonsense.

Re: Bitcoin is a disaster

#503

Post by TulliusCicero »

DeafSquid wrote: post #472
majewsky wrote: post #429

Earlier quoted context omitted.

Can we have "cash you can email" that doesn't consume as much electricity as several nation states combined?

How much electricity do you think traditional money printing and transfers consume?

A lot less per transaction than Bitcoin?

But I'm no expert.

Re: Bitcoin is a disaster

#504

Post by imtringued »

pojzon wrote: post #367
pjlegato wrote: post #328

Earlier quoted context omitted.

The entire BTC market cap is minuscule -- about 600bn as of this writing. That seems like a lot, but compare it to Apple -- the market cap of just this one company's stock is currently ~2,238bn. The market cap of gold, US dollars, Euros, etc. are all many times more than Apple. The value of all BTC is a tiny microscopic speck compared to the amount of USD or gold in the world. This means (among other things) a few sm…

To give an another view: 600bn is more than gdp of majority of countries.

GDP is income. What you are doing is the equivalent of comparing your mortgage payment with the price of the house when you bought it.

Re: Bitcoin is a disaster

#505

Post by repsilat »

Blammar wrote: post #272
thekyle wrote: post #195

Earlier quoted context omitted.

One of the most common critiques of modern portfolio theory is that it defines risk by volatility rather than downside risk. While a stock will never have price-to-book multiple less than 1 (unless fraud has occurred) a cryptocurrency has no such limit on how far it can fall.

I just wanted to point out that stocks have had price to book multiples less than one, per various comments by Buffett and Benjamin Graham. Also, for another example, there are funds that sell at a discount to the total value of shares held by the fund.

> stocks have had price to book multiples less than one

It's not even that unusual, or newsworthy. It's pretty common for banks, basically the rule for European banks. I'm still not convinced the numbers are "real" though. As I understand it, there are a few main arguments as to why "buy and strip" price arbitrage doesnt happen, and I'm not sure which is/are true:

- Regulatory barriers. JPM or Apple can't just buy Deutsche Bank because lawmakers won't allow it.

- They're too big to be bought out out by (European?) private equity, or controlling stakes aren't available.

- That's not real book value. Try to wind it down and it'll evaporate.

Maybe there are more. I understand that dividends and buybacks are currently limited by regulators in Europe, and that closes one valve for the price arbitrage, but still...

Re: Bitcoin is a disaster

#506

Post by jimmaswell »

graeme wrote: post #487
feanaro wrote: post #432

Earlier quoted context omitted.

Why is it obvious that no amount of tech can solve it? Tech can also influence policy. If something is nearly impossible to stop, it likely won't be stopped. The policy will be changed instead.

This hasn’t proven true in countries with functioning govts: they very much have applied tax and securities law to bitcoin.

The rideshare industry had a clear impact on local laws in every first world country for one example.

Re: Bitcoin is a disaster

#507

Post by anonisko »

jpmattia wrote: post #422
yunesj wrote: post #402

Bitcoin's value prop isn't in its anonymity. Early adopters weren't enthusiastic about bitcoin because they hoped it would end fractional reserve banking or any other financial product. Rather, it was incredible to see the entire financial industry quickly rebuilt on top of sound money. I agree that small transactions and mining can be (and are being) improved, but not for the same reasons. It's silly to blame bitcoi…

> Early adopters weren't enthusiastic about bitcoin because they hoped it would end fractional reserve banking Just to amplify your point: There is a weird idea that that monetary multiplication (like fractional-reserve banking) is not possible with bitcoin. However, anytime someone lends bitcoin or shorts it on an exchange, they increase the bitcoin in circulation past the base count of 21 million btc (or however ma…

Isn't the fundamental difference here that we can't print more bitcoin to bail out bad investments?

Yeah, you can lend out bitcoin and even do fractional reserves, but ultimately, the bill must come due and over leveraged bad bets will get wiped out and good bets get rewarded.

Contrast this to the current environment where we are constantly bailing out and even financially rewarding business and investment failures, which comes at the expense of the working class who both foot the tax bill and aren't well insulated from the ensuing inflation.

Re: Bitcoin is a disaster

#508

Post by Kranar »

notsureaboutpg wrote: post #391
cambalache wrote: post #304

I agree with most of the points raised by the author but as a Venezuelan Bitcoin is a godsend. If you live abroad and want to send remittances to your friends and family it can be pretty easy in a normal country , with wire transfers,western union and so on. If your family lives in Venezuela your options are extremely more limited. These are some of the options Venezuelans have had to use: 1. Ask the money to be sent…

The only reason BTC works in this scenario is that the authorities are not chasing it down. If they decide to, it will be just as unviable as the other options and authorities have many methods at their disposal to make bitcoin transfers difficult. BTC is cool, but no amount of tech can solve what is essentially a policy issue: overseas remittances.

You can make the same argument about AirBNB or Uber. The bottom line is that when a technology becomes available that makes life much easier for its users, it's really hard for the government to then crack down on it.

There's not much reason for any government to want to crack down on BTC simply for the sake of cracking down on it. People talk about governments cracking down on BTC because it will undermine the local currency or banking system but I think that's mostly paranoia, there's not much of any evidence to substantiate the hypothesis that any government is fearful of cryptocurrencies.

There were some governments and regulatory agencies that were concerned that BTC is a scam, or needs to be subject to security regulations, and had legitimate concerns about it but for the most part governments don't care that much about BTC in terms of a danger or a threat to their legitimacy.

Re: Bitcoin is a disaster

#509

Post by xapata »

zik wrote: post #359
xapata wrote: post #210

Earlier quoted context omitted.

Since Bitcoin transactions are enabled only by spending electricity, isn't the whole system dependent on utility companies, which are either in part or in whole extensions of the government?

If electricity became less available the mining rate of Bitcoin would automatically adjust to the scarcity of available computation - it's not like there's a specified amount of electricity that has to be used per transaction.

It's less about steady-state global availability than burst capacity. What if the People's Liberation Army decides that temporary control of the Bitcoin network is a valuable capability?

Re: Bitcoin is a disaster

#510

Post by graeme »

DeafSquid wrote: post #472
majewsky wrote: post #429

Earlier quoted context omitted.

Can we have "cash you can email" that doesn't consume as much electricity as several nation states combined?

How much electricity do you think traditional money printing and transfers consume?

Much less? Bitcoin currently powers almost none of the world’s transactions, yet consumes all that energy.

The entire us consumes 75 twh in a year, the same as bitcoin’s global energy use.

Of that, the entire commercial sector is about 12 twh. That’s not just banks. That’s every company. Banks alone are surely far less. Maybe 2-3 twh? And the us is 15% of global gdp. So, global finance might consume about 14-32 twh.

Again, that is while doing all of global finance. Bitcoin powers a rounding error of transactions yet consumes 75 twh.

There’s just no comparison energy wise. My math could be off by several orders of magnitude and bitcoin would still consume more if it were actually powering the world’s transactions.

https://www.eia.gov/energyexplained/us-energy-facts/

https://digiconomist.net/bitcoin-energy-consumption

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