Bitcoin - a decentralised digital currency

2,195 posts in this topic

29 minutes ago, bennetn said:

No one is forcing anyone to use crypto either as a currency, commodity or investment - your choice.  Seems the most rabid are those who probably have traditional investments who feel aggrieved that the new boy on the block is making others a lot more money.  

 

That's wrong. Bitcoin is not a "new investment" as opposed to a "traditional investment". Bitcoin is a new commodity; it pays no dividends and is value is not intrinsic, rather set by demand, i.e. like gold (but unlike say Apple or Siemens) the price will drop to zero tomorrow if no-one is interested to speculate with it. Gold would actually still be worth a bit as it is used in other ways besides as a a store of value, but that's besides the point. Investing is commodies is as old as Mankind, and highly speculative: fortunes can be made and unmade in short periods of time, so good luck to you. I prefer to invest my capital in productive assets; i.e. I go to sleep knowing that many, very intelligent people are dilligently working for me.

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Bitcoin is kinda like the tulip bulbs of the 17th century. 

 

You can't make a tulip bulb for free. You need soil, and land, and water, and even some cultivation, and of course seeds.

Likewise you can't make a bitcoin for free. You need a bitcoin engine, electricity to power it, and cooling to get rid of all the wasted power.

 

The difference is that the price of Bitcoin is closely related to the production price (actually the production price is tuned to the current market value).

While the price of tulip bulbs was disconnected from and far higher than the production price.

 

The similarity is that the high price is driven by buyers believing they will sell the units they bought for a profit.

 

The moment that is no longer true the price will plummet. 

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26 minutes ago, mtbiking said:

 

That's wrong. Bitcoin is not a "new investment" as opposed to a "traditional investment". Bitcoin is a new commodity; it pays no dividends and is value is not intrinsic, rather set by demand, i.e. like gold (but unlike say Apple or Siemens) the price will drop to zero tomorrow if no-one is interested to speculate with it. Gold would actually still be worth a bit as it is used in other ways besides as a a store of value, but that's besides the point. Investing is commodies is as old as Mankind, and highly speculative: fortunes can be made and unmade in short periods of time, so good luck to you. I prefer to invest my capital in productive assets; i.e. I go to sleep knowing that many, very intelligent people are dilligently working for me.

 

That's just semantics as an "investment" is just the process of investing money to make profit - doesn't matter what you invest in, it's an investment.  Crypto is just a new one hence my wording.

Who mentioned Bitcoin specifically?  Bitcoin may have been classified as a commodity but many other crypto tokens are used differently and are not classified as such.  People really need to understand Bitcoin is not all crypto.

I really couldn't give a shiny shit whether people like it, use it, don't like it, buy it, sell it but thinking you can ban it is pie in the sky and shows a complete lack of understanding in which case, probably better you do not invest in it and good luck with whatever you do invest in instead.

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1 hour ago, alderhill said:

In the same way people collect baseball cards or Star Wars toys. It has the promise of "real value" hence the current speculation bubble.

There is no promise. It is just a number that is a solution to some complicated math equations, for which you need to spend computation power (the cost of hardware+electricity.)  The difficulty of solving those equations is a guarantee that no-one can omit the process of solving equations to generate fake Bitcoins. This impossibility to fake is what gives it value. 

 

Just a small disclaimer: I earn money by using computation power to solve math equations. My data is however easy to fake, so it cannot be used as currency. 

 

 

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1 minute ago, yourkeau said:

There is no promise. It is just a number that is a solution to some complicated math equations, for which you need to spend computation power (the cost of hardware+electricity.)  The difficulty of solving those equations is a guarantee that no-one can omit the process of solving equations to generate fake Bitcoins. This impossibility to fake is what gives it value. 

 

Just a small disclaimer: I earn money by using computation power to solve math equations. My data is however easy to fake, so it cannot be used as currency. 

 

 

 

That's not true.  It's not the "impossibility to fake" what gives it value, the computational powers produce a reward when they confirm the block of transactions and the difficulty is not the guarantee. 

 

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Interesting read:

 

"How does Bitcoin’s energy consumption compare to the systems we have already become so accustomed to?"

 

Quote

First, we look at gold. In a report from LongHash in 2018, researcher Vladimir Jelisavcic draws data from the Barrick Gold Corporation 2017 annual report (the world’s largest gold mining company). In 2017, Barrick Gold Corp. mined 5.3 million oz. of gold (6% of total mined gold), and cited diesel fuels as their main expenditure. Extrapolating the data for all gold mining, in total 92 million barrels of crude oil were consumed ($87.3 Billion dollars), whereas the entire world consumes 34 billion barrels of crude oil annually (Fig. 14). Therefore, the direct cost of gold mining in terms of crude oil usage accounts for 0.27% of worldwide oil consumption (directly comparable to Bitcoin’s electricity share). ...

...

The findings of this report show that, environmentally, there should be no debate: Bitcoin does not negatively impact the environment any more than videogames, and is dwarfed by energy waste in China. The vast majority of the energy utilized by the network is from already accessible energy (i.e. no ‘new’ energy was created to meet the demands of the network).

 

Full pdf here:

 

https://cdn2.hubspot.net/hubfs/4536350/Marketing%20Materials/Bitcoin%20Study.pdf

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1 hour ago, bennetn said:

 

That's just semantics as an "investment" is just the process of investing money to make profit - doesn't matter what you invest in, it's an investment.  Crypto is just a new one hence my wording.

Who mentioned Bitcoin specifically?  Bitcoin may have been classified as a commodity but many other crypto tokens are used differently and are not classified as such.  People really need to understand Bitcoin is not all crypto.

I really couldn't give a shiny shit whether people like it, use it, don't like it, buy it, sell it but thinking you can ban it is pie in the sky and shows a complete lack of understanding in which case, probably better you do not invest in it and good luck with whatever you do invest in instead.


Explain to me why cryptocurrencies, the most known being Bitcoin (and you accuse me of semantics, jeez) are not a commodity and thus investing in them is fundamentally different from what everyone else who speculate in commodities do. Feel free to use big words, I do have a PhD in machine learning.

 

 

 

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9 minutes ago, mtbiking said:


Explain to me why cryptocurrencies, the most known being Bitcoin (and you accuse me of semantics, jeez) are not a commodity and thus investing in them is fundamentally different from what everyone else who speculate in commodities do. Feel free to use big words, I do have a PhD in machine learning.

 

 

 

Wow, condescending as well.  Try not putting words in my mouth, just read the ones I wrote.

 

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48 minutes ago, bennetn said:

That's just semantics as an "investment" is just the process of investing money to make profit - doesn't matter what you invest in, it's an investment.  Crypto is just a new one hence my wording.

Who mentioned Bitcoin specifically?  Bitcoin may have been classified as a commodity but many other crypto tokens are used differently and are not classified as such.  People really need to understand Bitcoin is not all crypto.

I really couldn't give a shiny shit whether people like it, use it, don't like it, buy it, sell it but thinking you can ban it is pie in the sky and shows a complete lack of understanding in which case, probably better you do not invest in it and good luck with whatever you do invest in instead.

 

It seems you're getting lost in semantics yourself. No one needs to ban bitcoin itself, and that's not the suggestion. You don't need to decree damnatio memoriae on Bitcoin, and throw all its developers, servers, keys and traders into a volcano. You just have (to continue to) disallow its official acceptance. I can't file my tax return with a link to my bitcoin balance. It's increase in value is almost wholly driven by the prospect of a big pay-off, not it's 'usefullness' per se. And as I've said, crypto is useful, but still plagued by too many downsides, IMO. You can say gold mining, oil drilling are full of dirty money and strife, yes, but why open another can of worms?

 

If you were going to petition state regulators to open the gates to Bitcoin, what would your argument be exactly?

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2 minutes ago, alderhill said:

 

It seems you're getting lost in semantics yourself. No one needs to ban bitcoin itself, and that's not the suggestion. You don't need to decree damnatio memoriae on Bitcoin, and throw all its developers, servers, keys and traders into a volcano. You just have (to continue to) disallow its official acceptance. I can't file my tax return with a link to my bitcoin balance. It's increase in value is almost wholly driven by the prospect of a big pay-off, not it's 'usefullness' per se. And as I've said, crypto is useful, but still plagued by too many downsides, IMO. You can say gold mining, oil drilling are full of dirty money and strife, yes, but why open another can of worms?

 

If you were going to petition state regulators to open the gates to Bitcoin, what would your argument be exactly?

 

You cannot put the genie back in the bottle, you cannot throw it's developers, servers or whatever away,  you cannot ban it (as was suggested would be simple) so what do you do.

I agree with you in general, there are a lot of downsides with individual tokens but the technology used can be applied in many other ways. It's ridiculous how big crypto and Bitcoin in particular have grown in just 10 or 11 years and particularly in the last 4 or 5. 

 

I wouldn't, it's stateless.  If it continues, a big if, to add value and be used for financial transactions I think they (the individual nation states) will need to find a way to live with it rather than the other way around.  It's still very young, it's very now and it's very uncertain.

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I don't think there is any point in trying to ban it because crypto is fundamentally an idea.

 

One big gripe I'd have with bitcoin though is that the underlying computational problem is the equivalent of a sudoku or a rubik's cube i.e. it's just a puzzle. If they could formulate problems like analysing cancer cells or unsolved mathematical theorems to be solved then there would be some tangible benefit from all that computing power.

 

I think regulation will eventually have to happen in that people will have to identify themselves to use the service and 'anonymous' bitcoins will be sanctioned. So if the US government says to Tesla, ok you can accept whatever currency or crypto you like as long as you can identify who is giving it to you, then that makes it much less of a wild west.

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Bitcoin consumes 'more electricity than Argentina'

https://www.bbc.com/news/technology-56012952

 

“It’s very bad that all this energy is being literally wasted in a lottery.”

The price of Bitcoin rose rapidly on Monday after Tesla announced its investment.

But commentators say the investment clashes with the electric car firm's previous environmental stance.

“Elon Musk has thrown away a lot of Tesla's good work promoting energy transition,” Mr Gerard said. “This is very bad... I don't know how he can walk this back effectively.

"Tesla got $1.5bn in environmental subsidies in 2020, funded by the taxpayer.

"It turned around and spent $1.5bn on Bitcoin, which is mostly mined with electricity from coal. Their subsidy needs to be examined."

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14 hours ago, bennetn said:

 

 

These are the exact reasons crypto currencies exist. we're beholden to a broken system of traditional national banking that benefits only the wealthy.

My money, I'll decide what to do with it and where I do that.

 

The current system is corrupt, unfair, expensive - long gone are the days when banking was trusted, which was the basis for traditional banking.

 

i agree the system is rigged. But cryptos have not been proven to be the panacea we are all looking for.

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9 hours ago, mtbiking said:

 

. Bitcoin is a new commodity; 

 

it is not even a commodity ( a raw material or primary agricultural product that can be bought and sold, such as copper or coffee. ). What can you do with a bitcoin? other than sell it to the next greater fool?

 

Gold is a commodity. 

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What happened to bitcoin "microtransactions" ? I thought bitcoin was supposed to be used like "money" ? Oh it's not practical... then they reinvented it into "digital" gold. It's a commodity now. Really? Somebody tell me, what can you do with a bitcoin? Yeah yeah, we are all old and out of touch. Or maybe you are young and naive - don't have experience or wisdom -  and haven't seen (or read enough history) to know about bubbles. 

 

Asks yourselves, why is CBNC always talking about Bitcoin? Could it be that they are getting paid to constantly run ads by Grayscale Bitcoin Trust?

 

Sure those that got in early made money. But those coming in late will be left holding the bag.

 

Peter Schiff is a gold bug - and of course biased. So he will never stop touting gold. But he's very clear about it as a store of value, and one should have 5-10% of it in their portfolio. So putting his biases aside, his criticisms against Bitcoin are valid:

 

 

Bitcoiners and gold bugs are both in agreement that the system is rigged (central banks printing money)... they just differ on how to escape fiat.  

 

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16 hours ago, Janx Spirit said:

Interesting read:

 

"How does Bitcoin’s energy consumption compare to the systems we have already become so accustomed to?"

 

 

Full pdf here:

 

https://cdn2.hubspot.net/hubfs/4536350/Marketing%20Materials/Bitcoin%20Study.pdf

Problem with that analysis is that 80% of the gold is mined for industrial and jewelery purposes, so the one that goes into reserves is 5x less than bitcoin consumption. Better yet, one day those reserves can be used for other purposes.

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Bitcoin does have some intrinsic value because, as MAM said, it has a production price and, most importantly, it is in use. People use it in the real world to do trade. Those two things alone give bitcoin a platform on which to stand. The current price is indeed driven by speculation, but that is no different to other commodities. That being said:

 

16 hours ago, Janx Spirit said:

Interesting read:

"How does Bitcoin’s energy consumption compare to the systems we have already become so accustomed to?"

Full pdf here:

https://cdn2.hubspot.net/hubfs/4536350/Marketing%20Materials/Bitcoin%20Study.pdf

 

I don't believe this at all. For starters the author works for some hedge fund which seems heavily invested in all things crypto. Secondly, the use of Bitcoin that I mentioned above is mostly criminal trade as far as I can tell. This is not a good use of world energy. It's just not. Sure, people burn electricity entertaining themselves in the form of TV and gaming and whatnot but I would consider that worthwile. We have to entertain ourselves as a species somehow. But bitcoin just has no worthwhile use.

 

Something like 40% of all the gold in the world is used in electronics, it's a very useful metal. Regardless of it's status as a speculative investment commodity, it has real value. It would always be mined, it's useful.

 

I think crypto as a technology is a good idea. And like aresenal21 said, it could even be used in parallel to help solve real world problems. But bitcoin burns a lot of energy, solving a pointless algorithm so that criminals can do trade and speculators can try to make money at the expense of each other.

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15 hours ago, bennetn said:

 

You cannot put the genie back in the bottle, you cannot throw it's developers, servers or whatever away,  you cannot ban it (as was suggested would be simple) so what do you do.

Reminds me 3D Tvs. One day, everyone said it was the future. And it is definitely high tech. A few years, completely abandoned. Just because it is new stuff it does not mean it will thrive.

 

15 hours ago, bennetn said:

I agree with you in general, there are a lot of downsides with individual tokens but the technology used can be applied in many other ways. It's ridiculous how big crypto and Bitcoin in particular have grown in just 10 or 11 years and particularly in the last 4 or 5.

 

Here is the problem: blockchain was promoted as a transaction method. As most of them are really terrible at it, then someone took the hype and transformed into a currency. As it sucks as a currency, now they took that hype and transformed it into a holder of value.

Do you know what is the only useful purpose? Criminal activitities! Do you want that?

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2 minutes ago, MikeMelga said:

Reminds me 3D Tvs. One day, everyone said it was the future. And it is definitely high tech. A few years, completely abandoned. Just because it is new stuff it does not mean it will thrive.

 

Here is the problem: blockchain was promoted as a transaction method. As most of them are really terrible at it, then someone took the hype and transformed into a currency. As it sucks as a currency, now they took that hype and transformed it into a holder of value.

Do you know what is the only useful purpose? Criminal activitities! Do you want that?

 

Do you bang your keyboard really hard when discussing Crypto?

You're ignorant of how blockchain is being used. 

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8 hours ago, wien4ever said:

 

i agree the system is rigged. But cryptos have not been proven to be the panacea we are all looking for.

In some instances it is though, there's crypto's providing liquidity to co-ops for example 

What we have now is probably not the solution but even if it means banking has to change to compete and be fairer and more transparent then it's a start

Banking has been around for eons, crypto's are 10 years old yet people want to judge them equally?

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