Thread: Bitcoin, or Bitcon

Tulip mania - Wikipedia

Originally Posted by cava

Up to ~A$83,100 now.

Not sure where it will end, or for how long, but it appears to have legs!

Looks like I have a hat to eat!

Originally Posted by woodPixel

Looks like I have a hat to eat!

Don't feel bad Evan, it’s an unknown quantity, and the only thing I am sure of is that the old established rules of the financial/economic sectors are crumbling.

Blockchain technology is here to stay, and along with that change is electronic currencies (cryptocurrency) which banks and governments are secretly rubbing their hands together for. The old system that we all grew up with is tottering on the edge. How we all navigate these changes is the real question. 🤔

Originally Posted by cava

Don't feel bad Evan, it’s an unknown quantity, and the only thing I am sure of is that the old established rules of the financial/economic sectors are crumbling.

Blockchain technology is here to stay, and along with that change is electronic currencies (cryptocurrency) which banks and governments are secretly rubbing their hands together for. The old system that we all grew up with is tottering on the edge. How we all navigate these changes is the real question. 🤔

I'm 69 years old and things are changing way too fast for me now. I could have another 15-20 years in me yet, and I'm not really looking forward to it. I'll leave it at that lest I start to rant.

I thought this article written on slashdot, may be illuminating to those interested in the tech behind bitcoin (et al)....

The New York Focus site writes:A decade ago, the bankrupt owner of the Greenidge power plant in Dresden, New York, sold the uncompetitive coal-fired relic for scrap and surrendered its operating permits. For the next seven years, the plant sat idle on the western shore of Seneca Lake, a monument to the apparent dead end reached by the state's fossil fuel infrastructure. But today, Greenidge is back up and running as a Bitcoin mining operation. The facility hums with energy-hungry computers that confirm and record Bitcoin transactions, drawing power from the plant's 106-megawatt generator now fueled by natural gas.

The mining activity is exceptionally profitable, thanks to an 800 percent rise in Bitcoin's price since last April. Seeking to ride the boom, the plant's new owners plan to quadruple the power used to process Bitcoin transactions by late next year. Environmental advocates view Greenidge's ambitions, if left unchecked, as an air emissions nightmare. And they fear that dozens of other retired or retiring fossil-fueled power plants across New York could follow Greenidge's example, gaining new life by repurposing as Bitcoin miners or other types of energy-intense data centers.

The New York Times recently touted an alternative to bitcoin mining: the "proof of stake" method, which "instead awards miners new blocks based on how much cryptocurrency they already own."The world's second-largest cryptocurrency by market capitalization, Ethereum, has said it is moving toward proof of stake (that switch is likely to take up to another year). Though some critics say Bitcoin will eventually need to follow, particularly if an environmental backlash grows, there are no current plans to do so and such a move is unpopular within the Bitcoin community.

"That reduces your emissions to almost nothing," said Joseph Pallant, Blockchain for Climate's founder and executive director. Cryptocurrency platforms like Tezos or Near Protocol already use proof of stake and have vastly lowered their energy use.

The difference between bitcoin and tulips or bitcoin and pigeon farming or whatever else is that bitcoin is an actual product, not an investment in a supposed other cash flow. Demand for the product is what's going to set its value. I have a whopping half a coin (call me a chicken).

I mentioned a friend of my wife's whose husband invested in it heavily a couple of years ago. I thought he was a bit nuts (and he already had significant capital for people our age, but not mercedes owning capital - rather kids in private school but still stuck in a job).

He quit his job last week - his wife has a moderately profitable scalable business, and they are first going to take 6 months off, travel the US in a camper and then buy a permanent location for his wife's business as it's outgrowing the model she has (which is basically physical therapy and wellness for high worth elderly who want more service than medicare provides, and they want something tailored - the wellness part is not wellness like quack medicine, just an extension of physical therapy).

My half bitcoin on the other hand has earned me enough so far to get a few pizzas in retirement. I'm still in a job that I hate and probably was only partially cut out for (which was fine when you only needed to be good at parts of your job to be valuable, but when the environment gets more competitive and only the ringers are left in it, I'm on the way out one way or another).

Kind of wish I'd have followed suit with the friends, but admit that I don't have the stomach to take the risks they do.

At any rate, bitcoin's real threat isn't pump and dump - nobody is making false statements about what it is. Its real competition in the long run is another similar medium that is far less energy intensive to run, or complete government blacklisting across the board. That wouldn't make it go away, but it would make a lot of us legal owners of the stuff leave and it would cause it to tank temporarily.

A couple of crypto stories.

I was in Bangkok and needed some new sunglasses. Went into an eyeglass shop and on the door it said "Bitcoin accepted here." I did a bit of a doubletake as I'd been following the crypto thing for a while but that was a first. This was in 2010 or so. When I came home I checked and BTC was worth around 10USD. I was amazed as the last time I'd checked they were worth cents. I had a bit of spare cash so bought some. REALLY glad I did as that trip to buy some raybans ended up with my 4 kids all owning mortgage free lovely homes in various capital cities.

Around the same time a mate of mine did some graphic design work for a US company. When he invoiced them they told him they were cash poor but gave him 1100 coins for his trouble. When BTC ran up to AUD2000 he cashed out a 1000 for 2 million AUD. When it went up to 20000 he sold the other 100 for another 2 million AUD. So 4 million AUD for a USD10000 job lol. If he'd hung onto them they'd be worth upwards of 70 million today.

It's a funny old world.

Mick.

Originally Posted by D.W.

The difference between bitcoin and tulips or bitcoin and pigeon farming or whatever else is that bitcoin is an actual product ...

I think the tulip analogy was fitting. You can't take your bitcoin and do something with it. Its only value lies in other people believing it has value, and being willing to exchange goods and services for it. Perhaps I don't hang out in the cool part of the neighbourhood, but have yet to come across any product or service provider who accepts bitcoin. As such, for me, it has zero value outside of a speculative investment. A speculative investment I might add in which I have no interest in participating.

I attended a briefing by the AICD's chief economist several years ago, and he made the point (as I recall it) that forensic accounting was the leading tool for countering international terrorism and domestic organised crime. Given the role national currencies play in maintaining law and order, there was a strong case that with the flick of a wrist, governments could pass legislation banning it at any point.

I note then that as of today:
- China instituted a range of policies in 2017 to discourage cryptocurrency use, resulting in Bitcoin traded with Chinese yuan dropping from over 90% of global Bitcoin trading to under 1%.
- India has legislation on the table to ban mining, trading, and even holding cryptocurrencies.

Let that sink in. For at least 36% of the world's population (China & India), cryptocurrencies are not a viable option. Considering that they account for 14% and 16% of global import and exports respectively and growing, I struggle to see non state-managed cryptocurrencies participating in much international trade in the near future, short of legislative back flips in those countries.

Its such an interesting thread, for the ideas are now being discussed by a "non-traditional" audience.

In the IT world, I would classify it as a religious war. There are True Believers and (to the first group) Heretics.

Its very interesting, for when one boils any digital coin down, its is simply a mathematical calculation constrained by electricity (price) and computing availability (power/calcs-per-second). The prices of both of these are well known.

Therefore the price should be literally this: availability, cost-of-calc and electricity.

Th recent 15% drop in BC price is attributed to a sudden loss of power in Xinjiang. It is said this is where most of the "Ant Miners" are due to the very low cost of power and, ahem, availability of free labour


So it is thus for gold, silver, palladium, copper, wheat and timber.... but Bitcoin iS dIFfErEnT..... somehow.

One other point of contention, that was obvious many years ago when I first started mining (did it for a short time when BC was effectively zero) is that one can fork the chain, or even create a new chain, at any time, and its exactly the same thing... the supply of "bitcoin" is infinite. People don't seem to realise this point. It is super important. The first fork was called Bitcoin, but anyone at any time for any reason can create bitcoin2, whateverCoin or ChinaCoin.... Bitcoin is not special, or valuable, or unique.


From Slashdot....

"The mania that drove crypto assets to records as Coinbase went public last week turned on itself on the weekend," report Bloomberg — as the price of bitcoin took a big dive:The world's biggest cryptocurrency plunged as much as 15% on Sunday, just days after reaching a record of $64,869. It subsequently pared some of the losses and was trading at about $56,440 at around 8:25 a.m. in Tokyo Monday. Ether, the second-biggest token, dropped as much as 18% to below $2,000 before also paring losses. The volatility buffeted Binance Coin, XRP and Cardano too.

Dogecoin — the token started as a joke — bucked the trend and is up 7% over 24 hours, according to CoinGecko.

The weekend carnage came after a heady period for the industry that saw the value of all coins surge past $2.25 trillion amid a frenzy of demand for all things crypto in the runup to Coinbase's direct listing on Wednesday. The largest U.S. crypto exchange ended the week valued at $68 billion, more than the owner of the New York Stock Exchange... Dogecoin, which has limited use and no fundamentals, rallied last week to be worth about $50 billion at one point before stumbling Saturday. Demand was so brisk for the token that investors trying to trade it on Robinhood crashed the site a few times Friday, the online exchange said in a blog post.

There was also speculation Sunday in several online reports that the crypto plunge was related to concerns the U.S. Treasury may crack down on money laundering carried out through digital assets... Besides the "unsubstantiated" report of a U.S. Treasury crackdown, Antoni Trenchev, co-founder of crypto lender Nexo, said factors for the declines may have included "excess leverage, Coinbase insiders dumping equity after the direct listing and a mass outage in China's Xinjiang province hitting Bitcoin miners."

edit: Slashdot is a hyper-nerd related news and discussion website. It is pretty vitriolic sometimes in the arguments, but ideas are well thrashed out. Well worth bookmarking and reading the topline articles see what worries the IT world for the day. It will give you a different perspective.

I think blockchain currencies like Bitcoin were a pretty good idea designed to provide a secure currency for the world but not linked to any particular economic zone. However, its value was left to the open market rather than (somehow) fixing it to a basket of exchange rates. There's no federal reserve or any other mechanism able to intervene to moderate its value such as traditional currencies have to protect international trade, inflation, etc. So its become little more than an investment gamble in the digital medium.

It reminds me of those schemes where you would buy a seat on a virtual airplane with the the option of selling ten more seats to others at a handsome profit.

The question remains as to whether international banking will be convinced to use blockchain technology but with some mechanism for controlling its comparative value.

mick

And I leave this link here for your considered comment....has the world gone mad?

https://thenextweb.com/news/cryptocu...rom-demolition

Originally Posted by LanceC

I think the tulip analogy was fitting. You can't take your bitcoin and do something with it. Its only value lies in other people believing it has value, and being willing to exchange goods and services for it. Perhaps I don't hang out in the cool part of the neighbourhood, but have yet to come across any product or service provider who accepts bitcoin. As such, for me, it has zero value outside of a speculative investment. A speculative investment I might add in which I have no interest in participating.

I attended a briefing by the AICD's chief economist several years ago, and he made the point (as I recall it) that forensic accounting was the leading tool for countering international terrorism and domestic organised crime. Given the role national currencies play in maintaining law and order, there was a strong case that with the flick of a wrist, governments could pass legislation banning it at any point.

I note then that as of today:
- China instituted a range of policies in 2017 to discourage cryptocurrency use, resulting in Bitcoin traded with Chinese yuan dropping from over 90% of global Bitcoin trading to under 1%.
- India has legislation on the table to ban mining, trading, and even holding cryptocurrencies.

Let that sink in. For at least 36% of the world's population (China & India), cryptocurrencies are not a viable option. Considering that they account for 14% and 16% of global import and exports respectively and growing, I struggle to see non state-managed cryptocurrencies participating in much international trade in the near future, short of legislative back flips in those countries.

you're missing the point with the tulips and the pigeon farmers and all of that stuff - in that case, the investors were sold the idea that the tulips or pigeon farmers, etc, would be worth a whole bunch, but the demand for the product wasn't there.

There's nothing to misunderstand about bitcoin and the objective with something that costs $50K us isn't to get a coin out of your pocket and buy a beer, it's to hold currency or make large payments or transfer it in and out of local or foreign currency - and it does that well. The point of it is that your share of it is permanently marked and that no central service can be shut down eliminating the record of your bitcoin slice while you're holding it. Whether that's worth $10k or $60k to someone, I don't know.

I don't think there's a threat of it going away because people "figure out it's not worth anything", I think it's at a threat of losing value in the future because people figure out how to make a better and more efficient version of the same.

But to suggest that you can't buy anything with it ignores how easy it is to turn into liquid assets wherever you are. It's dead simple.

As far as the Chinese not liking it, do you feel like it matters that the Chinese don't allow anyone in country to see uncensored american internet (or the version most of the rest of the world sees if you'd like to call it that?) - I don't think it matters. If a small % of the world finds it valuable on an ongoing basis, it will remain valuable. I'd also bet that people in china and india who really want to use bitcoin will just VPN and own other currency and use it to get and redeem bitcoin - that's the virtue of nobody being able to stop it. you may not be able to redeem it for yuan, but that doesn't mean you can't invest and redeem in it - just don't use yuan.