On Bitcoin...
Posted by CaptainKirk 4 months, 3 weeks ago to Economics
I said BTC would hit $100K long before it hit ZERO.
The link I am referencing to is worth watching. Michael Saylor says it best.
When you spend little to no time looking into BTC, you know it's a ponzi scheme.
Then after a good 10-20 hrs of actually studying what BTC is. you start to realize...
BTC is the digitization of MONEY. Just like Digital Cameras destroyed Kodak.
Digital Money will destroy paper currency.
He goes on to say, nobody who spends 100hrs actually researching/studying BTC,
Walks away a critic of BTC.
I know the Gulch is stock full of older patrons who shall not believe.
And I am okay with that. If I can get a few of you to LIKEN this "concept" to
the concepts of Harnessing Fire, or Electricity, or the Internal Combustion Engine.
You might wake up that part of you that realize that this "creates future opportunities",
that can be done without MIDDLEMEN (bankers, or government). [Okay, the reality
is that the middlemen are the many miners who make the network work... But they are 100% decentralized. And they are not going to take lightly to being asked to steal from someone like them, to help a central government somewhere].
Anyways. Flame me all you want. There were CROWDS admonishing Tesla/Edison for electricity. For 20yrs, everyone thought automobiles were STUPID and unreliable.
But getting someone from the Gulch to dig in, and ask... What will this change?
Because, as Mr. Saylor says... Nobody who spends the 100hrs researching this is still a skeptic.
Personally, MSTR (his stock) is booming because of him converting his cash holdings into BTC.
Also, the "bankers" told him "cash is trash" and that "you need to carry lots of debt to get better valuations". I mention this, because MANY of you naysayers are fully invested in the stock/bond market, a system that is PROVABLY a ponzi scheme with Counter-Party Risks, and subject to the Great Taking... (your deposits in your bank... COME LAST to the borrowing the bank has done at the Fed Window or with other banking institutions. Yes, the FDIC protects you).
Now, I am not saying it will be SMOOTH sailing for BTC. it will continue to chop around.
But if we are at $100K / BTC now. And the USA starts to accumulate, And 50 other companies are starting to do what MSTR did, so that they can hold BTC instead of depreciating cash.
You owe it to yourself to consider having some as a hedge against the coming inflation.
If you want to play around. Consider using IBIT. I have this in an IRA. For months, I traded it (long bias only), on the swings up and down. When it broke out, I bought a bunch and I will hold until I think we switch to sideways action. Probably 100-200 days from now. These are LONG SLOW Cycles. Don't try to get rich quick.
But IBIT makes it easy to play with. With very low fees if you do trade it.
(FWIW, I won't trade my BTC, never have). I just use IBIT to capture the volatility.
Because I am CONFIDENT that 3,5,9, 15 years from now. It will be higher than it is today!
From a market guessing standpoint. I could be 100% wrong. But I assume they will push this to about 125K and then we will get a big correction. At least down to 100K. And then the market will go sideways for 180+ days, maybe longer.
Does it require Electricity and Internet? Yeah... That's why it's not for the Mad Max Future.
That's what gives it a downside risk to $0.
But quite frankly, in the Mad Max future... I am not sure how much your gold will buy you when you run out of ammo to protect it.
The link I am referencing to is worth watching. Michael Saylor says it best.
When you spend little to no time looking into BTC, you know it's a ponzi scheme.
Then after a good 10-20 hrs of actually studying what BTC is. you start to realize...
BTC is the digitization of MONEY. Just like Digital Cameras destroyed Kodak.
Digital Money will destroy paper currency.
He goes on to say, nobody who spends 100hrs actually researching/studying BTC,
Walks away a critic of BTC.
I know the Gulch is stock full of older patrons who shall not believe.
And I am okay with that. If I can get a few of you to LIKEN this "concept" to
the concepts of Harnessing Fire, or Electricity, or the Internal Combustion Engine.
You might wake up that part of you that realize that this "creates future opportunities",
that can be done without MIDDLEMEN (bankers, or government). [Okay, the reality
is that the middlemen are the many miners who make the network work... But they are 100% decentralized. And they are not going to take lightly to being asked to steal from someone like them, to help a central government somewhere].
Anyways. Flame me all you want. There were CROWDS admonishing Tesla/Edison for electricity. For 20yrs, everyone thought automobiles were STUPID and unreliable.
But getting someone from the Gulch to dig in, and ask... What will this change?
Because, as Mr. Saylor says... Nobody who spends the 100hrs researching this is still a skeptic.
Personally, MSTR (his stock) is booming because of him converting his cash holdings into BTC.
Also, the "bankers" told him "cash is trash" and that "you need to carry lots of debt to get better valuations". I mention this, because MANY of you naysayers are fully invested in the stock/bond market, a system that is PROVABLY a ponzi scheme with Counter-Party Risks, and subject to the Great Taking... (your deposits in your bank... COME LAST to the borrowing the bank has done at the Fed Window or with other banking institutions. Yes, the FDIC protects you).
Now, I am not saying it will be SMOOTH sailing for BTC. it will continue to chop around.
But if we are at $100K / BTC now. And the USA starts to accumulate, And 50 other companies are starting to do what MSTR did, so that they can hold BTC instead of depreciating cash.
You owe it to yourself to consider having some as a hedge against the coming inflation.
If you want to play around. Consider using IBIT. I have this in an IRA. For months, I traded it (long bias only), on the swings up and down. When it broke out, I bought a bunch and I will hold until I think we switch to sideways action. Probably 100-200 days from now. These are LONG SLOW Cycles. Don't try to get rich quick.
But IBIT makes it easy to play with. With very low fees if you do trade it.
(FWIW, I won't trade my BTC, never have). I just use IBIT to capture the volatility.
Because I am CONFIDENT that 3,5,9, 15 years from now. It will be higher than it is today!
From a market guessing standpoint. I could be 100% wrong. But I assume they will push this to about 125K and then we will get a big correction. At least down to 100K. And then the market will go sideways for 180+ days, maybe longer.
Does it require Electricity and Internet? Yeah... That's why it's not for the Mad Max Future.
That's what gives it a downside risk to $0.
But quite frankly, in the Mad Max future... I am not sure how much your gold will buy you when you run out of ammo to protect it.
I would not call BTC mining or purchasing 'investment'. It is a waste of resources. Humans are dumb, instead of spending resources on actual productive activities, they are wasting it on nonsense. Investment might be researching a drug, building infrastructure. creating a business that produces stuff other people want to consume, etc. Even buying gold is NOT an investment.
If costs of production of some good come down, what will happen is an increase in the wealth of population. People will spend the saved money on some other thing and increase their standard of living. Everybody will become more rich. This will not change the amount of money circulating in the system.
What creates deflationary pressure is the following:
1. burning dollar bills
2. paying off loans (in a fractional reserve type system)
3. increase in savings
Correct me if I am wrong.
Nah. This argument is garbage.
The idea that somebody should profit from something by default is stupid. The one thing one should expect in any endeavor is to break even (including one's spent time). So, if you spent some time doing something and you received payment equaling to what your time is worth, you broke even. Any profit is cherry on top. There is only one way to fairly profit in the most perfect system - it is to do something that someohow increases productivity. If you spend 1 hour making 1.1 widgets when everybody else spends 1 hour to make 1 widget, you will profit fairly. Any other way to profit is just a wealth transfer from someone else.
So the dipshits that get rich off shitcoins going up are transferring wealth from the future bag holders of those tokens that end up with them when the prices goes down.
The correct way to profit from early adoption is from the increase in efficiency that the new currency creates. So, a shop owner switches to using the new more efficient currency. His prices are constant in the new currency, so, he and his customers that switched would not endure the inflation tax, thereby increasing their efficiency.
Hence I propose my own version of the financial system (one without dipshits of any kind).
The producers produce wealth, the producers should also have the ability to produce the associated currency. In my idea of the perfect currency, they would.
Here is how it would work:
1. Person builds a house. This creates the physical wealth.
2. Person insures the house with a special type of policy. This removes the risk of the physical wealth getting destroyed by fire or some other devaluation. Person receives digital certificate from insurer.
3. Person uses digital certificate to 'mint' tokens into existance that are tied to that exact physical item.
4. New tokens can be used as currency to pay for stuff (as credit).
5. When house is sold, outstanding tokens on it (in other people's wallets) get swapped out for some of the tokens that are used as payment for the house (effectively having the owner receive price of house minus outstanding credit).
6. Depreciation on the house would decrease the amount available as credit to the owner.
This system is very similar to today's banking system except it removes the parasites.
So, the owner of physical wealth gets to mint coins but up to a certain limit that is less than the value of the item. All of the rules are enforced by wallet software. If something isn't right, the wallet software will reject the transaction. Also, wallet software can be customized to reject certain tokens if the risk is too high or insurer is questionable or whatever.
The supply is controlled naturally by the existing physical wealth. If the wealth goes up, so does the currency supply and vice versa. This keeps the prices constant. Now, there is still the question of money velocity and its effect on prices, however, I haven't gotten around to figuring that part out yet.
>> You don't want a buch of dipshits suddenly becoming rich at the expense of productive people, but this is exactly what bitcoin does.
You don't want a bunch of dipshits suddenly becoming rich at the expense of productive people, but this is exactly what central-bank-controlled fiat currency does.
Those 'dipshits getting rich' on bitcoin are essentially the early adopters profiting from the rise in bitcoin's value. I'm not sure you want to break the 'early investors in a new technology profit from its increase in popularity' mechanism.
A good currency has the following attributes:
1: It has a stable value (the value doesn't fluctuate, or doesn't fluctuate much), and as such can be used as a store of value.
US dollar: pretty good, better than most world fiat currencies.
Bitcoin: bad.
2: It is easily portable.
US dollar (physical): good for small transactions, poor at border crossings, poor for large transactions (try buying a car with a suitcase full of cash)
US dollar (electronic): good unless you are a 'disfavored person or business'.
Bitcoin: very good.
3: It is easily divisible, and usable for both large and small transactions.
US dollar: very good
Bitcoin: excellent
4: It's widely accepted.
US dollar: very good, unless you are a 'disfavored person or business'.
Bitcoin: Fair to poor.
5: Fakes are easily detected.
US dollar: good
Bitcoin: very good
6: It doesn't suffer from the 'double spend' problem.
US dollar (physical): excellent
US dollar (electronic): Anywhere from excellent to poor, depends on the bank processing the transaction.
Bitcoin (on-chain): excellent
Bitcoin (off-chain, exchanges): Anywhere from excellent to poor, depends on the bitcoin exchange.
7: Transaction overhead is very low (effectively zero except for very large transactions).
US dollar: Good to very good
Bitcoin: Fair to good (mainly risk premium for converting bitcoin to another currency due to its volatility)
8: Any central authority for the currency needs to be trustworthy, and not inflate the currency for their own benefit.
US dollar: has been pretty good so far in the short term but poor in the long term, but can slide to poor in the short term in an instant.
Bitcoin: Excellent so long as there isn't an undisclosed bug in the protocol, and 51% attacks are impossible in practice.
But just reading the Purpose... I like it.
https://img1.wsimg.com/blobby/go/ec91...
Now, what you do with it is up to society.
How you value it, is up to society.
The trick is the Network. How many people will learn to use it? Try it out? Work with it?
Then, how can we apply it where we need it. My favorite example is the Federal Reserve. We could literally automate everything they do with perfect transparency.
In the stock world. Imagine a block chain tracking every share issued. Perfectly. (The brokers currently are allowed to "over sell" a stock, one guy bought 100% of his companies shares, and found that 20% was still out there trading. LOL)
Primarily, it is a trustless ledger for transferring the crypto/underlying and recording transactions using millions of miners worldwide to record everything.
Crypto is a reference to "Strong Cryptography", which is how we SIGN transactions. Imagine a 158 digit PIN is protecting your wallet. The simple magic is that when you sign a transaction. It's complicated, but that signature can be confirmed without "burning/showing" your PIN.
this is what makes it trustless. (A reference to the fact that if you give me a check... I have to TRUST that the bank on the check actually exists). In this case, if you sign a transactions and post it. The coins will be transferred to my wallet.
A Wallet is just an Address that can receive coins. Your PIN protects your Wallet. Every Wallet has a different PIN. Think of the PIN as the Private Key. The opposite half is the Public Key. (Your wallet address is PART of your Hash of your Public Key). Public keys can be shared. Once you LOSE your private key, your money is lost.
That's Crypto as a Concept. What does it really do? It records transactions. They can contain additional information. There are blockchains out there that store "files". There is a block chain for doing DNS, which guarantees that only the owner of the domain can change it (no government shutting it down).
This is the next most powerful concept. NOBODY ultimately controls it. It is controlled by people who want to protect it conceptually, and they require consensus to PATCH/Change it.
That's it. Is it an Investment? Is it really digital gold?
This is up to each person to decide. It's a way of owning something that NOBODY can take from you. There is NO system that can reach in and take your BTC from you.
It is "Perfect Property" according to Michael Saylor.
If you own Property in New York. You could get sued, and forced to sell it. You could miss a tax payment and have it stripped from you. Or, NY may decide you have no right to do anything useful with it.
The test is this. If you were offered $1 billion worth of GOLD, SILVER, or NY LAND or BTC. And you could NOT SELL IT, and were required to leave it to your children, and protect it so they actually got it. Assume 30 yrs will go by.
Which would you prefer? (I would take BTC).
Keep in mind. You will have to pay storage for Gold/Silver.
you will owe property taxes for the property.
That's all BTC is. It's a concept of digital ownership of property (digital property). Eventually every Title will be on a blockchain. (It's also an immutable record of the transactions).
ETHEREUM adds programmability with Smart Contracts. Which could actually be setup to run the ENTIRE Federal Reserve w/o people!
Every prior technology is no obsolete. MOSTLY due to unfathomable speed increases, and pure genius attacks.
After witnessing these attacks the ECSD algorithms were created to prevent this. Even the process of "Signing" A transaction is cool. It literally uses another randomly generated key as a signature.
Currently, I believe Quantum to be a lark. Like most of modern physics, it works "on paper". Every time they get close, someone finds a unique approach to solving the problems using new algorithms and old computers.
That said. There are 2-3 things Modern Crypto could do to easily FIX this. The first is the usage of Quantum resistant algorithms. Other approaches could include an MFA approach where you have to Authorize using a secondary account on another blockchain. Making it nearly impossible, because you have have to crack the MFA in order to then attack the wallet. Another option is for the user to manage 2 linked addresses. And to temporarily set a flag in one linked address indicating a pre-approved transaction that is soon to be coming, with a timeout feature. (Like Positive Pay used by banking to make sure stolen/signed checks cannot be cashed).
What's great is that once you are using an application to sign your stuff, configuring it to doubly sign a transaction is no big deal for the application.
Most of the improvements EITHER require an extra step or two... Or TRUSTING a 3rd Party. Or a Multi-Sig.
We are early. There is a lot of room for innovation. But the odds of "hacking" someones keys are infinitesimally small. Right now, the cost to hack 256 bit ECDSA is EONS of time PLUS 1 Huge Hard Disk for EVERY DOLLAR of US DEBT.
SIDE NOTE: One of the reasons it was created, was that IF WE FORCED our governments to use BTC. We could trace EVERY DOLLAR Spent! Don't forget this. This came about after finding Government "Employees" and elected officials siphoned of TONS of money, and were buying Islands, and land owned by offshore banking companies with law firms specializing in hiding this stuff.
When quantum computers and other unforeseen number crunchers easily break the crypto process used to create the coin, can the “value” be maintained?
🤔
1. Digital is one thing.
2. Deregulation or a gold/x standard and eliminating the Fed is a completely different thing.
Bitcoin conflates the two. You are arguing for 2, and I agree, but that is separate from 1.
Private Bankers control it. If we actually had a national Digital Currency, controlled properly (Decentralized). (effectively the fed window could literally be done via digital contracts).
Then I see a place for BOTH still.
I got side tracked making the core point. Sorry.
We could have a digital currency, and still want/use BTC for long-term savings. The equivalent of Digital Gold, so to speak.
But imagine a currency that could not just be inflated to the hilt. And one in which the bonds are sold, and the payments from the "fed window interest rates" are paid to the bond holders.
The amount of this currency would have to float, and that keeps it separate from BTC. But, on the other hand. The RATE could ratchet up, dynamically based on the leverage, which would become putative for CB with a 42 leverage ratio (42:1 Borrowing).
That's how you learn.
Money detached from Governments and Bankers.
It's amazing.
One day Gulchers will be like "We KNEW it would come to this!"... LOL
FWIW, that Fed Window is a wonderful source of UNTAXED INCOME for the owners of the Fed who put up ZERO collateral, pay no taxes on their dividends, and do not even have to disclose who owns them... BUT when they get in trouble are always bailed out. (reason alone to nationalize them).
Again, everyone I know hits the Saylor Rule. Within the first 10-20hrs you think it's junk, garbage a Ponzi scheme. Once you get past that, you realize our current system (provably unstable) is a problem.
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