Bitcoin

[The Sultan]

While I understand that gold has intrinsic value, that wasn't really the case for the majority of its use in human history.  Additionally, about 10% of gold that is newly produced is used in industrial applications. Most gold is used for jewelry or value storage (investments).  My point is, that Bitcoin is similar because it is a store of value.  We obviously cannot return to the gold standard, and fiat money has it's own set of problems.  Bitcoin and cryptos solves these problems and remove banks from the equation.  Bitcoin is easily transferable internationally, has fraud protection, no identity theft problems, and is anonymous.  You control your money.  Is it perfect?  Absolutely not, but it is still young.  The main problem is people dont bother to learn anything about it, and call it the next tulip bubble.  And it's clearly not.  Of course it will be volatile... and more so than gold.  If the US were to experience hyperinflation, what would you do with your money?

People having been warning about hyper inflation for 30 years. It's low on my list of concerns.

[Coleman]

I'll return to what I said.  You dont seem to know much about crypto.  Bitcoin has a finite number of coins.  21 million.  Never more.  Not all crypto is equal.  Probably a good idea to read about them before drawing such a conclusion.

I'm aware there is a finite number of bitcoins. I still stand by my point of crypto fragmentation, which you didn't really address.

Just telling people who know about crypto that they don't know about crypto isn't a great refutation.

[Hards Alumni]

I'm aware there is a finite number of bitcoins. I still stand by my point of crypto fragmentation, which you didn't really address.

Just telling people who know about crypto that they don't know about crypto isn't a great refutation.

Crypto fragmentation isnt important.  Many cryptos will fail, probably most.  That shouldn't matter.  A lot of companies fail as well.  You bet on the good ones.  With documentation, white papers, and that seem to fill a need.  The others can burn away. 

[Coleman]

Crypto fragmentation isnt important.  Many cryptos will fail, probably most.  That shouldn't matter.  A lot of companies fail as well.  You bet on the good ones.  With documentation, white papers, and that seem to fill a need.  The others can burn away.

We are able to make rational, calculated analyses on which companies are "good"...revenue, profit, balance sheet, dividend payouts, etc.

On what basis is one crypto better than other? Why is Ether a better (or worse) long term bet than Litecoin?

Further, you shouldn't have to make a "bet" on a store of value. A store of value should be predictable and stable....like the US dollar or gold. 

[Hards Alumni]

We are able to make rational, calculated analyses on which companies are "good"...revenue, profit, balance sheet, dividend payouts, etc.

On what basis is one crypto better than other? Why is Ether a better (or worse) long term bet than Litecoin?

Further, you shouldn't have to make a "bet" on a store of value. A store of value should be predictable and stable....like the US dollar or gold.

You can lead a horse to water but you can't make him drink.

[The Sultan]

You can lead a horse to water but you can't make him drink.

That's not really an answer.

[Hards Alumni]

That's not really an answer.

Yo, it isn't my job to educate someone that claims to have knowledge.  Especially, since he is clearly full of chit.  If you dont know the difference between different cryptos, then dont claim to have knowledge.  Hell, he could have googled the answer to his own question and not looked stupid.

Additionally, we 'bet' on stocks all the time.   We do this with as much knowledge regarding them as we can.  Unless you prefer the dartboard method?  He's either being dishonest about his knowledge base or trolling poorly.  Either way, he gets the responses he deserves.

[Jockey]

Yo, it isn't my job to educate someone that claims to have knowledge.  Especially, since he is clearly full of chit.  If you dont know the difference between different cryptos, then dont claim to have knowledge.  Hell, he could have googled the answer to his own question and not looked stupid.

Additionally, we 'bet' on stocks all the time.   We do this with as much knowledge regarding them as we can.  Unless you prefer the dartboard method?  He's either being dishonest about his knowledge base or trolling poorly.  Either way, he gets the responses he deserves.

Comparing stocks and bitcoin is lazy.

[Hards Alumni]

Comparing stocks and bitcoin is lazy.

Its called an analogy.  Surprised it went over your head.

[mu03eng]

The effect of quantum computing on the value of blockchain technology is overestimated.

Disagree, the inherent security(and by extension value) is based on the fact that the time it takes to hack the hash for a single ledger(ie a block) more blocks have been added and you have to have the down stream blocks to unlock the transaction. Quantum computing allows you to hack the hashes significantly faster, faster than the 10 minutes before the next block is added.

Also the fact that the minors are trending towards centralization (last I checked 6 mining pools owned 80% of the blockchain for BTC) further weakens the security that QC will break pretty quickly IMO

[Eldon]

I'll return to what I said.  You dont seem to know much about crypto.  Bitcoin has a finite number of coins.  21 million.  Never more. Not all crypto is equal.  Probably a good idea to read about them before drawing such a conclusion.

Yes, but it is infinitely divisible.  Even though there are 21 million, decimal points can go on forever.

[forgetful]

Disagree, the inherent security(and by extension value) is based on the fact that the time it takes to hack the hash for a single ledger(ie a block) more blocks have been added and you have to have the down stream blocks to unlock the transaction. Quantum computing allows you to hack the hashes significantly faster, faster than the 10 minutes before the next block is added.

Also the fact that the minors are trending towards centralization (last I checked 6 mining pools owned 80% of the blockchain for BTC) further weakens the security that QC will break pretty quickly IMO

My contention revolves around the fact that it is not "inherent security" that determines its value, but "relative security". Quantum computing will be a game changer, in terms of hackability of networks, nodes, and by extension transactions. But, Blockchain by its design will still be the most secure technology, hence because of its relative security, it will not be effected much in terms of value.

I used to be more worried about the effect of Quantum computing, but looking into it deeper, and talking to experts I know, I'm not as concerned. The main risk will remain, human-risks, and human-design errors, re. 60-70% of total traffic towards Bitcoin nodes is controlled by only 3 ISP's, making it vulnerable to routing attacks. These are things that can be fixed easily.

[mu03eng]

My contention revolves around the fact that it is not "inherent security" that determines its value, but "relative security". Quantum computing will be a game changer, in terms of hackability of networks, nodes, and by extension transactions. But, Blockchain by its design will still be the most secure technology, hence because of its relative security, it will not be effected much in terms of value.

I used to be more worried about the effect of Quantum computing, but looking into it deeper, and talking to experts I know, I'm not as concerned. The main risk will remain, human-risks, and human-design errors, re. 60-70% of total traffic towards Bitcoin nodes is controlled by only 3 ISP's, making it vulnerable to routing attacks. These are things that can be fixed easily.

It's a fair opinion to have and I can't necessarily disprove it. Guess we'll have to revisit this in 20 years

[Hards Alumni]

Yes, but it is infinitely divisible.  Even though there are 21 million, decimal points can go on forever.

Explain why this is a problem.

[forgetful]

It's a fair opinion to have and I can't necessarily disprove it. Guess we'll have to revisit this in 20 years

Agreed, I can't prove it either, and I for one welcome our quantum computing overlords.

[Eldon]

Explain why this is a problem.

Have you ever heard of Zeno's paradoxes?

One month bread costs 0.00000002 bitcoins.  The next month bread costs 0.00000007 bitcoins.  That's hyperinflation. 

Moreover, it's my understanding that in the source code of Bitcoin, the number of decimal places can be increased to infinity if needed.  So even though Bitcoin's supply is nominally limited to 21 million coins, it is effectively unlimited because it can be divided up infinitely.

[The Sultan]

Have you ever heard of Zeno's paradoxes?

One month bread costs 0.00000002 bitcoins.  The next month bread costs 0.00000007 bitcoins.  That's hyperinflation. 

Moreover, it's my understanding that in the source code of Bitcoin, the number of decimal places can be increased to infinity if needed.  So even though Bitcoin's supply is nominally limited to 21 million coins, it is effectively unlimited because it can be divided up infinitely.

That's no different than any other commodity or shares of stock or mutual fund however.

[mu03eng]

That's no different than any other commodity or shares of stock or mutual fund however.

This is certainly true but Hards contention is the BTC is immune to inflationary pressures. It might be more resistant but as your point shows it would not be immune.

[Coleman]

This is certainly true but Hards contention is the BTC is immune to inflationary pressures. It might be more resistant but as your point shows it would not be immune.

You obviously know nothing about crypto or bitcoin 

[mu03eng]

You obviously know nothing about crypto or bitcoin 

[Benny B]

You obviously know nothing about crypto or bitcoin 

It's not surprising that BTC/crypto supporters use this talking point despite the fact that there are a number of "informational firewalls" to prevent the general public from learning about the inner-workings of BTC/crypto.

What would be surprising is if any Americans are truly using BTC/crypto as a "store of value" (SOV).  Because I would expect that BTC/crypto owners who like to trumpet this fact don't know enough about finance to realize what they're actually doing is making a "speculative investment."  A SOV is someplace you put your money to protect it against material and systematic risk (MSR), i.e. a collapse of a sovereign currency, economy, war, hyper-inflation, etc.

In the US, even if we prejudged a MSR event as a statistical impossibility, there are better SOV's available, including everyone's favorite, gold, which - while short in supply - is not restricted in the US, i.e. any of us can go out and buy it right now. 

So why would someone put money into BTC as a SOV?  Usually, it's because they live in a country where MSR is a real possibility and/or ownership of SOV's do not come without restriction.  In the US, it's pure lunacy to protect your wealth with BTC rather than gold or another imperishable commodity.

Further, a SOV is not a "hedge against risk" in the same way that options and derivatives are utilized.  A hedge is a temporary or short-term contingency against volatility in a primary investment, because hedging on a permanent or long-term basis is tantamount to betting every number on the roulette table... over time, the "house cut" will bankrupt you ("death by a thousand cuts" pun intended).  Moreover, BTC itself is the primary investment... there is nothing "up the food chain" that you're using BTC to hedge against. 

So holding BTC long term is a poor choice of SOV in the developed world, and it's not a hedge against anything.  It's also not a traditional investment that pays a dividend or any sort of return.  So what is it?  Well, most BTC owners in America won't admit it (because apparently it's sacrilege), but every single one always has a price where they're willing to sell - or at least a range where they strongly consider it.  In other words, much like a vegan investment banker in Manhattan who's buying pork bellies, American BTC owners have no intent on using it for any other reason except as a vehicle for profit.  Hence, "speculative investment."

Technically, it might be unto a category of its own, i.e. "cult speculative investment," because every time someone points out what's actually going on, the BTC mafia descends on you like Scientologists on Leah Remini.

At best, those who own crypto in the US are simply capitalizing (double entendre) on the unfortunate circumstances people that live under autocratic regimes face in risking having their wealth, the products of their labor, taken from them (or commandeered) by the state.  At worst, it's closer to the manner in which American demand for certain food commodities (i.e. certain rices, quinoa, etc.) is driving up food costs (thus increasing starvation) in undeveloped countries.

[Hards Alumni]

Well, today was a bad day.

lol

[Benny B]

Well, since Hards resurrected the thread.... has Covid-19 swayed anyone's opinion as to the purported benefits of crypto's?  Even a tiny bit?

[Hards Alumni]

Well, since Hards resurrected the thread.... has Covid-19 swayed anyone's opinion as to the purported benefits of crypto's?  Even a tiny bit?

Jumpy people will sell 'investmments' in scary times. 

[Hards Alumni]