Bitcoin, Cryptocurrency and Blockchain Discussion Thread

[daniel]

... It seems to me that the cost of launching a new crypto currency is very low so what prevents people from launching various coins leading to uncontrolled number of coins circulating?

And that's just what has happened. Bitcoin is at present the most popular and talked-about, but there are more cryptocurrencies floating around than you can shake a stick at, and no standardization or consumer protection with any of them. If a merchant wanted to really go all-in with crypto, they'd have to accept all of them, which makes it impossible to set a price on anything. Unless of course the real price is denominated in dollars or the local currency of the country, and they convert the price to your preferred crypto in the instant of the purchase. (And then the merchant takes the risk that the value of that particular crypto may fall before they can unload it.)

That's really the biggest problem for any merchant who wants to accept crypto: The value of your currency changes so fast and so unpredictably that they make or lose more money per transaction on the changing value of the crypto than they make on the sale of the item. I've never seen any proponent of crypto address this. Sure, one or two of them claim to have steady value (because they're pegged to an actual currency!) but that requires exactly the kind of regulation and manipulation that most advocates of crypto oppose.

Whatever crypto may be good for, use as an actual currency is not it.

 

[Captkerosene]

If BTC can't keep its value because some dude is displeased with it on the internet then it has no legs. Tesla was attacked by every MSM one can think of, every analyst one can think of, and every famous short seller one can think of yet here we are. That's the difference between a good investment and one that's trash.

That is wrong. The value narrative is dependent on institutional investors including BTC in their portfolios as a new asset class. These guys would love to not have to spend their summers trying to learn the ins and outs of a very complicated story - even more complicated than TSLA a few years ago. Elon's comments gave cover to money managers who decided that it was easier to declare BTC uninvestible for environmental reasons than to do their work. (If you aren't long BTC you're short BTC.) Also, the proof of work feature is a central characteristic of BTC. If you don't need that to be secure then another network will eventually replace BTC. Elon was advancing that idea. (I don't know if he is right or wrong on that point, it's the biggest unknown in this investment for me. Equivalent to the battery versus hydrogen debate for Tesla ... you think you know but can't ever be 100% sure.) Now that Elon has backtracked I think the BTC price will start advancing again.

 

[MP3Mike]

Now that Elon has backtracked I think the BTC price will start advancing again.

He hasn't back-tracked. This is just restating what he said when they stopped taking BTC for new vehicle orders.

 

[dl003]

That is wrong. The value narrative is dependent on institutional investors including BTC in their portfolios as a new asset class. These guys would love to not have to spend their summers trying to learn the ins and outs of a very complicated story - even more complicated than TSLA a few years ago. Elon's comments gave cover to money managers who decided that it was easier to declare BTC uninvestible for environmental reasons than to do their work. (If you aren't long BTC you're short BTC.) Also, the proof of work feature is a central characteristic of BTC. If you don't need that to be secure then another network will eventually replace BTC. Elon was advancing that idea. (I don't know if he is right or wrong on that point, it's the biggest unknown in this investment for me. Equivalent to the battery versus hydrogen debate for Tesla ... you think you know but can't ever be 100% sure.) Now that Elon has backtracked I think the BTC price will start advancing again.

If money managers are using Elon as cover to not buy BTC and BTC is a sound investment, they will just miss out on the opportunity. TSLA’s value is not dependent on institutional ownership. Lets go back to game theory: in the market everyone is in for themselves. Although institutional ownership increases the stock price, the value proposition has to be there for the acquisition to take place. Either BTC has an intrinsic value or it doesnt. Elon’s opinion doesnt change that.

 

[Captkerosene]

He hasn't back-tracked. This is just restating what he said when they stopped taking BTC for new vehicle orders.

The semantics don't really matter. He'll be taking BTC again. The thing is though that the damage is already done. Trying to "muscle" BTC into changing will not be something that Bitcoiners will respond well to. "Rules but no rulers" is one of their mottos. But, a cold war is better than a hot one.

 

[Captkerosene]

If money managers are using Elon as cover to not buy BTC and BTC is a sound investment, they will just miss out on the opportunity. TSLA’s value is not dependent on institutional ownership. Lets go back to game theory: in the market everyone is in for themselves. Although institutional ownership increases the stock price, the value proposition has to be there for the acquisition to take place. Either BTC has an intrinsic value or it doesnt. Elon’s opinion doesnt change that.

Elon's opinion absolutely changes the intrinsic value: look up reflexivity. BTC is at the tipping point of either being the world's reserve currency (up another 100X) or being overtaken by rivals. (Remember when Elon tried to sell to Apple ... not very long ago.) Mostly though the price swing was short sellers taking advantage of an over-leveraged market. I heard somewhere that a million traders were wiped out by the price crash. Elon may have only been a butterfly flapping his wings but it started a thunderstorm that many blame on him.

 

[Queeg500]

Elon's opinion absolutely changes the intrinsic value: look up reflexivity. BTC is at the tipping point of either being the world's reserve currency (up another 100X) or being overtaken by rivals. (Remember when Elon tried to sell to Apple ... not very long ago.) Mostly though the price swing was short sellers taking advantage of an over-leveraged market. I heard somewhere that a million traders were wiped out by the price crash. Elon may have only been a butterfly flapping his wings but it started a thunderstorm that many blame on him.

Butterflies are always starting thunderstorms. But you never know which one is guilty. Or something.

 

[wdolson]

Cryptocurrency Basics: Pros, Cons and How It Works - NerdWallet

Cryptocurrency is a class of digital assets, including Bitcoin and Ethereum, that runs without the need for a central authority.

www.nerdwallet.com

The vast majority of cryptos are currently not accepted by anyone for goods or services, so the only thing you can do with a new crypto is trade it for another crypto or cash. At this point the vast majority of cryptos are more a commodity than a currency. Just like you can't walk into the supermarket and hand them a bar or silver for your groceries. You can sell the bar at a precious metals dealer and then use the cash to buy your groceries, but the market is not set up to handle anything but bank transactions and cash.

I would be curious where most non-mining crypto transactions are taking place and where most of the owners reside. I suspect that it's disproportionately in rich western countries where monetary transfer are quite easy and cheap.
A non proof-of-work crypto with a stable value sounds great. Are there any ideas about how to do loans with crypto?

To be able to take crypto requires a reliable connection to the internet. That is going to exclude a lot of developing countries. Cash is still the primary means of trade in most of those countries because the infrastructure for electronic transactions is either not there or unreliable. Electronic payment is growing everywhere, but the developing world is behind the curve.

Even in the US those who are unbanked (don't have a bank account) or under banked (have less of their assets in a bank account than the norm) are overwhelmingly poor. The 2nd and 3rd COVID stimulus payments were done by debit card for anyone who did not have a bank account registered with the IRS or Social Security in large part because the sorts of places the unbanked cash checks take a cut for the service.

Page 6 of this report
https://www.mckinsey.com/~/media/mc...s/2020-mckinsey-global-payments-report-vf.pdf

shows the growth of electronic transfers from 2010 to 2020. In mature markets the use of cash in 2020 ranged from 9 to 54%. Japan was highest (54%), second was Singapore at 39%. Sweden is only 9%. Emerging markets shows China as the leader with only 41% cash, but the rest are all over 70% cash.

Finding data on where crypto transactions are done for goods and services is difficult to find, but I think your assumption is pretty accurate. I would not be surprised to find that almost all crypto transactions in developing countries are on the black market.

 

[dl003]

Elon's opinion absolutely changes the intrinsic value: look up reflexivity. BTC is at the tipping point of either being the world's reserve currency (up another 100X) or being overtaken by rivals. (Remember when Elon tried to sell to Apple ... not very long ago.) Mostly though the price swing was short sellers taking advantage of an over-leveraged market. I heard somewhere that a million traders were wiped out by the price crash. Elon may have only been a butterfly flapping his wings but it started a thunderstorm that many blame on him.

Elon’s opinion is external to BTC so Im having a difficult time seeing it as part of its intrinsic value. Intrinsic value exists independently of external factor. For example: when we talk about TSLA, its intrinsic value is the discounted value of future cash flow, which doesnt change by the fact that, says, GS’s clients dont buy TSLA per its rating. Although market participants have different ideas of what this intrinsic value might be, it is there nonetheless.

 

[Xepa777]

The vast majority of cryptos are currently not accepted by anyone for goods or services, so the only thing you can do with a new crypto is trade it for another crypto or cash. At this point the vast majority of cryptos are more a commodity than a currency. Just like you can't walk into the supermarket and hand them a bar or silver for your groceries. You can sell the bar at a precious metals dealer and then use the cash to buy your groceries, but the market is not set up to handle anything but bank transactions and cash.



To be able to take crypto requires a reliable connection to the internet. That is going to exclude a lot of developing countries. Cash is still the primary means of trade in most of those countries because the infrastructure for electronic transactions is either not there or unreliable. Electronic payment is growing everywhere, but the developing world is behind the curve.

Even in the US those who are unbanked (don't have a bank account) or under banked (have less of their assets in a bank account than the norm) are overwhelmingly poor. The 2nd and 3rd COVID stimulus payments were done by debit card for anyone who did not have a bank account registered with the IRS or Social Security in large part because the sorts of places the unbanked cash checks take a cut for the service.

Page 6 of this report
https://www.mckinsey.com/~/media/mckinsey/industries/financial services/our insights/accelerating winds of change in global payments/2020-mckinsey-global-payments-report-vf.pdf

shows the growth of electronic transfers from 2010 to 2020. In mature markets the use of cash in 2020 ranged from 9 to 54%. Japan was highest (54%), second was Singapore at 39%. Sweden is only 9%. Emerging markets shows China as the leader with only 41% cash, but the rest are all over 70% cash.

Finding data on where crypto transactions are done for goods and services is difficult to find, but I think your assumption is pretty accurate. I would not be surprised to find that almost all crypto transactions in developing countries are on the black market.

1) With the Terra ecosystem, millions of people in South Korea are using crypto stablecoins for transactions on a daily basis across many merchants. The second largest city in South Korea is going to be launching a city-wide pilot to basically make the Terra ecosystem a universally accepted digital currency. // With Celsius, across ALL the cryptos (eth, btc, AAVE, etc.) you will have a credit card collateralized against your crypto assets. So in that way, all your various cryptos ARE able to be used for daily transactions.

2) With Starlink going operational, a very large swath of the world will gain access to the internet for the first time in the coming two years. A majority I dare say. And when that happens, crypto tech will be there with the most competitive cost structures to bring into the banking system.

 

[SpaceCash]

What are the arguments that it is not Satoshi? Honest question.

Satoshi Nakamoto translates loosely to Central Intelligence Agency, which is whomst made that coin.
It's a useless coin because it takes forever to process and is easily tracked (by the CIA).
XRP is the only crypto I am still heavily invested in.

Laugh now, cry later.

 

[dl003]

So does anyone have a good explanation of why Tesla is holding tight to its BTC holding. I'm sorry I don't buy the hedging explanation. When has Tesla or Elon ever cared about hedging? Just so out there and far from the mission.

 

[pz1975]

Maybe this was all a long play by Elon to use his and Tesla's clout to push the whole crypto industry towards using clean energy for mining. This type of change would fit in with his overall mission/motivations. If so, then he is definitely playing 3D chess compared with everyone else.

 

[Xepa777]

Paul Tudor Jones on a 5% Bitcoin Portfolio Weighting, The FED & Inflation Isn't Transitory - 6/14/21 -

 

[dl003]

Paul Tudor Jones on a 5% Bitcoin Portfolio Weighting, The FED & Inflation Isn't Transitory - 6/14/21 -

I don't buy it. May make sense for a portfolio manager. Pierre Ferragu said Tesla cash return on capex is 25% and heading to 40%. Why worry about inflation when you can deploy cash much more effectively. If Tesla is sitting on too much cash, that'll seriously be a negative.

 

[wdolson]

Another opinion that Bitcoin is a bubble:
All-star investor Rich Bernstein warns bitcoin is a bubble, sees oil as the most ignored bull market

Oil stocks are rising. Good thing since I'm sitting on a bunch of oil stocks (inherited) I want to sell.

 

[Artful Dodger]

Wall Street Journal: Elon Musk Can Move Markets | CleanTechnica

Wall Street Journal‘s Akane Otani notes:

“The Tesla chief executive’s often-cryptic messages have sent bitcoin’s price on a roller-coaster ride this year. Prices soared nearly 20% one January morning when he added ‘#bitcoin’ to his Twitter biography. They jumped 16% in a single day the following month after Tesla Inc. revealed it bought $1.5 billion worth of the cryptocurrency.”​

“Then, he tweeted earlier this month that Tesla would no longer accept bitcoin as payment for its vehicles. Investors widely blame the tweet for starting bitcoin’s most punishing selloff of the year… bitcoin prices have fallen some 50%, including roughly 40% since Mr. Musk’s May tweet,” Otani writes.​

Yeah Elon may be a firebrand, but he's OUR firebrand...

Cheers!

 

[SwTslaGrl]

"Bitcoin dives as China widens crackdown on crypto mining
...
Beijing has turned the screw on cryptocurrency miners to stamp out financial risks from speculation, although environmental concerns about the gas-guzzling mines is also a factor.

Chinese media reported that electricity supply to all crypto mines across the province was stopped at midnight Sunday, as the topic trended on social media.

Sichuan is China's second most intensive mining region after Xinjiang in the country's northwest, according to Cambridge University's Bitcoin Electricity Consumption Index.
..."

Bitcoin dives as China widens crackdown on crypto mining

BEIJING: Bitcoin tumbled more than 10% Monday after China broadened a crackdown on its massive cryptocurrency mining industry with a ban on mines in a key southwestern province.

www.bangkokpost.com

 

[heltok]

Andrej Karpathy does his own Bitcoin implementation:

A from-scratch tour of Bitcoin in Python

Musings of a Computer Scientist.

karpathy.github.io

 

[lascavarian]

69,000 btc go missing.

South African Brothers Vanish, and So Does $3.6 Billion in Bitcoin

A pair of South African brothers have vanished, along with Bitcoin worth $3.6 billion from their cryptocurrency investment platform.

www.bloomberg.com