Bitcoin, Cryptocurrency and Blockchain Discussion Thread

[thx1139]

Swings go both ways.

Which makes it a poor currency.

I have money in liquid assets. Currency in the form of money market funds.
I have money in investments. Stocks
I have money in non liquid assets. Real Estate

Another example. Say your are closing on a house in a couple of weeks. Say $100K for a 20% down payment. Would you have it in crypto currency? What happens if a week like this happens and you are supposed to close on Monday. Yes I know you could have a great week as well. The point of currency is when things need to be non volatile.

 

[mrmage]

Which makes it a poor currency.

I have money in liquid assets. Currency in the form of money market funds.
I have money in investments. Stocks
I have money in non liquid assets. Real Estate

Another example. Say your are closing on a house in a couple of weeks. Say $100K for a 20% down payment. Would you have it in crypto currency? What happens if a week like this happens and you are supposed to close on Monday. Yes I know you could have a great week as well. The point of currency is when things need to be non volatile.

Don't forget the transaction fee. The settling time of 10 minutes + volatility + $10 transaction fee makes it unusable for any application that's somewhat real time or consumer sized.

A $5 coffee would cost $15 due to the $10 transaction fee.

A $10 movie ticket would cost $20 after fees.

Imagine buying stocks with BTC - TSLA swings up 3%, BTC swings down 3% in the 10 minutes it takes to settle. Someone could make a loss when they should have made a profit.

BTC is a store of value like gold, but an awful currency.

This isn't to say it won't go up. BTC could go to $500k or $1M if people think it's worth it. That's a completely different matter.

 

[heltok]

Thats not my point. It is not currency if it swings so dramatically. I would never want to be paid in Bitcoin or price items in Bitcoin.

It’s a currency if some people use it as currency. Just because I don’t use gold as a store of value does not make it a not store of value.

Try getting paid in bitcoin once, it might surprise you. And try buying something priced in bitcoin. I did this back in 2012, that was a very profitable learning experience.

Spend those $50 and 1h of learning time, it is better than waste tens of hours trying to theoretically understand something or debating it on the internet.

 

[heltok]

Don't forget the transaction fee. The settling time of 10 minutes + volatility + $10 transaction fee makes it unusable for any application that's somewhat real time or consumer sized.

A $5 coffee would cost $15 due to the $10 transaction fee.

A $10 movie ticket would cost $20 after fees.

Imagine buying stocks with BTC - TSLA swings up 3%, BTC swings down 3% in the 10 minutes it takes to settle. Someone could make a loss when they should have made a profit.

BTC is a store of value like gold, but an awful currency.

This isn't to say it won't go up. BTC could go to $500k or $1M if people think it's worth it. That's a completely different matter.

Yes, Bitcoin currently has a high transaction fee. That is one of the reason I don’t hold any bitcoins. Instead I have invested in Ethereum that has a lower transaction fee and plans to scale it to close to zero transaction fee.

Sometimes you win, sometimes you lose when you transact because of the time it takes to settle the transaction the price has changed. Stocks take like 48h to settle, Bitcoin is super fast compared to stocks, Ethereum even faster. Still I don’t see a problem of selling some TSLA to pay for a Tesla and kind of wish I could do this transaction without having to exchange to fiat currency to do the transaction. If I held the shares in DeFi I might be able to execute the full transaction in a few seconds and with less than a dollar fees even with Tesla demaning to receive payment in CNY. But because of my countrys archaic tax laws I choose to hold TSLA in the legacy stock market.

 

[abasile]

Try getting paid in bitcoin once, it might surprise you. And try buying something priced in bitcoin.

Now that PayPal allows users to buy and sell Bitcoin, I could imagine them facilitating small transactions. My assumption is that, if I hold Bitcoin in a PayPal account, it's actually "owned" by PayPal, and I am merely assigned an interest in a certain amount of BTC; essentially, it's just an entry in PayPal's database. This could be roughly analogous to a brokerage holding shares of TSLA on my behalf.

If that's true, then PayPal could easily facilitate Bitcoin transactions between PayPal users. For the most part, no actual BTC would change hands; rather, PayPal's database would simply be updated to reflect changes in BTC ownership interest. That would be very low cost, and other bank-like entities could easily do the same thing. Of course, users would lose the benefits of directly holding their own BTC, but they'd have the benefit of being able to use it like currency.

 

[mrmage]

Yes, Bitcoin currently has a high transaction fee. That is one of the reason I don’t hold any bitcoins. Instead I have invested in Ethereum that has a lower transaction fee and plans to scale it to close to zero transaction fee.

Sometimes you win, sometimes you lose when you transact because of the time it takes to settle the transaction the price has changed. Stocks take like 48h to settle, Bitcoin is super fast compared to stocks, Ethereum even faster. Still I don’t see a problem of selling some TSLA to pay for a Tesla and kind of wish I could do this transaction without having to exchange to fiat currency to do the transaction. If I held the shares in DeFi I might be able to execute the full transaction in a few seconds and with less than a dollar fees even with Tesla demaning to receive payment in CNY. But because of my countrys archaic tax laws I choose to hold TSLA in the legacy stock market.

Wrong analogy. Stocks settle in a couple days, but currency like USD doesn't change value much during that period. If someone used crypto instead of USD, the value of the crypto could easily change 30% over two days.

Crypto proponents often say that it averages out because sometimes you win and sometimes you lose. I guarantee that it is not ok for the vast majority of business applications to be vulnerable to 30% asset swings. It's great when you win big, but it takes only one bankruptcy to wipe someone out forever.

As for Ether, transactions cost $7 which is only a little better than BTC. A $5 coffee would cost $12. But what if Ether 2.0 increases TPS orders of magnitude?

Ether's intrinsic value derives from being gas money to pay for blockchain transactions. If TPS goes up orders of magnitude, the demand for Ether drops orders of magnitude unless DAPPs make up the difference. I don't see them generating 1000x more transactions when the value of Ether is not stable enough to be a currency.

So if Ether TPS capacity goes way up, there will be a huge oversupply of Ether because the intrinsic need for gas drops. The other demand for Ether (besides being gas) is hoarding for speculation. So we're back to crypto's value being driven from speculation, rather than being intrinsically valuable for something useful.

 

[heltok]

As for Ether, transactions cost $7 which is only a little better than BTC.

Just a little clarification. Average cost is for average transactions. A lot of transactions use much more gas than sending eth from one contract to another and thus cost much more increasing the average. It’s been like a year since I used Ethereum so I am not up to date with current cost of sending ether.

I don't see them generating 1000x more transactions when the value of Ether is not stable enough to be a currency.

There are many stablecoins on the ethereum network. But again, this was said 6 years ago and clearly failed to predict the future(today) where 1000x more transactions are being sent. So the argument’s power to predict the future seems weak.

So if Ether TPS capacity goes way up, there will be a huge oversupply of Ether because the intrinsic need for gas drops.

FWIW I agree. This is a good argument. It’s one of the main reasons I have diversified away from Ether. It started with Facebook Libra and me thinking how the future could look like and I could see a future where Ether was mainly used to pay for gas for transacting tokens and running code. But I still kept some financial instruments tied to the price of Ether in case I was wrong. Using Ether to transact on Ethereum has some benefits and it has network effects(like Bitcoin), so maybe Ether will not only be used as gas.

 

[dmvevguy]

There was someone on here that recommended blockfi with the 8% insane savings rate. I can't seem to find that person with their referral link. I'm contemplating throwing 100k with some previous coinbase btc gains. I'm not a fan of coinbase due to the high fees to buy/sell btc. Does anyone know how much it costs to for blockfi transaction fees?

I know companies like microstrategy dumped in a big investment into btc, so just hope it stays stable and continues to rise as my only fear is governments blocking it.

 

[JRP3]

Coinbase going public Coinbase Global to Go Public Through a Direct Listing

Thoughts?

 

[heltok]

 

[AudubonB]

Do I have to go through all 430 posts to read up on a responsible discussion of cryptocurrencies' combination of (1) the carbon footprint of their mining AND (2) the crowding out effect such has of other electric consumers desiring clean electrons? All I've seen are anecdata®™.

 

[MXWing]

Coinbase going public Coinbase Global to Go Public Through a Direct Listing

Thoughts?

Put in a market order when it opens. Buy the dips and hold for 4 years until the public figures out the daily supply of BTC being generated is halving again.

Coinbasing it is a verb for buying BTC with cash.

 

[JRP3]

Don't they trade all, or most of the cryptos as well as BTC? I'm looking at it as a way to get exposure to the crypto market but not tied to just one.

 

[JRP3]

Do I have to go through all 430 posts to read up on a responsible discussion of cryptocurrencies' combination of (1) the carbon footprint of their mining AND (2) the crowding out effect such has of other electric consumers desiring clean electrons? All I've seen are anecdata®™.

Some discussion of it starting around here Bitcoin, Cryptocurrency and Blockchain Discussion Thread

 

[Xepa777]

Ahem...

Elon Musk says he’s a supporter of bitcoin and thinks it will get ‘broad acceptance’ in finance

 

[MXWing]

Ahem...

Elon Musk says he’s a supporter of bitcoin and thinks it will get ‘broad acceptance’ in finance

How big is BTC wallet???!?

 

[Boomer19]

Boomers

boomer!

 

[MC3OZ]

Seems to me people assume the rules around Bitcoin have to extend to al other Cryptocurrencies.
Bitcoin is mined because that is a rule of Bitcoin, it should be possible to create Cryptocurrency that doesn't need to be mined.
For example the World Bank decides to issue 100,000,000 EarthCoins each year. (If you don't like the rules you don't need to buy the coin.)

But the proposal has merit IMO because it has real and lasting benefits for humanity-

• The world bank and UN trend towards being self-funding, and are less subject to political pressure.
• A #WC would be a boon for companies like Tesla who regularly do overseas transactions - currency conversions are more or less eliminated.

My 2nd question is whether apart from the creating of the coin itself, whether BitCoin mining achieves anything of lasting value to humanity. My recollection is that coins are mined by solving obscure mathematical problems, mining seems to more of a computational brute force approach rather than an elegant efficient way of solving problems. So are the problems being solved important, and of lasting value to humanity?

A EarthCoin system could have a higher level MeritCoin awarded annual for outstanding achievement in Art, Architecture, Music, Engineering, Science, Medical Science etc, only 10-20 MeritCoins would be awarded each year, each would have a history and a purpose and hence would be highly collectable.

So what can stop the creation of new and improved Cryptocurrencies, with different rules? IMO nothing.

.

 

[heltok]

So what can stop the creation of new and improved Cryptocurrencies, with different rules? IMO nothing.

There are thousands of coins with different rules. You can create your own or pay some service to do it. The problem is convincing other people to accept your coins in exchange for something else.

What Bitcoin managed to do was to bootstrap something from zero. And part of the solution to this problem was to allow mining, thus making the miners “invested” into the long term success of Bitcoin. Today very few people are miners, but back in the days most people were miners. If you are just catching up with the last 12 years, try not to reinvent the wheel, instead try to understand why those clever people did what they did and the first step is to understand what they did. This is a good book:
https://www.amazon.com/Digital-Gold...eywords=Bitcoin+history&qid=1612742307&sr=8-1

 

[MC3OZ]

And part of the solution to this problem was to allow mining, thus making the miners “invested” into the long term success of Bitcoin.

I'm not doubting that, what I am saying it there are other possible solutions.

For example, a new coin could have a base peg to the US dollar, that means there is an iron clad guarantee that coin is worth at least one US dollar.

I don't the the UN and the world bank, backed by the international banking system, would have any trouble convincing people their coin was valuable, I would buy it.