Gold collapsing. Bitcoin UP.

[Zarathustra]

>It's the credit, stupid.

no, it's both credit and the monetary base which it's built off of.
[doublepost=1468524699][/doublepost]we know this b/c in the US you have to accept dollars to extinguish all debt.

Yes, you cannot expand the monetary base out of thin air. You need credit to do it. Power and force (organized violence) is not thin air. It's something that the society pre-financed with hard work (tribute/protection money).

No economist could explain it better than Laurie Anderson:


O judge
O Mom and Dad
Mom and Dad

O judge
O Mom and Dad
Mom and Dad

Hi. I'm not home right now. But if you want to leave a
message, just start talking at the sound of the tone.

Hello? This is your Mother
Are you there?
Are you coming home?

Hello?
Is anybody home?
Well, you don't know me, but I know you

And I've got a message to give to you
Here come the planes
So you better get ready
Ready to go
You can come as you are, but pay as you go
Pay as you go

And I said: OK. Who is this really? And the voice said:
This is the hand, the hand that takes
This is the hand, the hand that takes
This is the hand, the hand that takes
Here come the planes.
They're American planes
Made in America
Smoking or non-smoking?

And the voice said: Neither snow nor rain nor gloom
of night shall stay these couriers from the swift
completion of their appointed rounds.

'Cause when love is gone
there's always justice
And when justive is gone
there's always force
And when force is gone,
there's always Mom.
Hi Mom!

So hold me, Mom, in your long arms
So hold me, Mom, in your long arms
In your automatic arms.
Your electronic arms.
In your arms.
So hold me, Mom, in your long arms
Your petrochemical arms
Your military arms
In your electronic arms

 

[cypherdoc]

You got it ass backwards. Why do you think you have to pay off your credit card each month with cash? Why do you think when you apply for a loan, cash is part of your assets evaluated to qualify you for the loan? Why do you think banks themselves evaluate their risk based on how much debt they have relative to liquid assets of which cash is one? Why do you think when a debt default occurs you have to cough up cash to make good? And on and on and on.

why do you think cash is listed as an asset and debts as a liability on standard balance sheets? Why do you think cash is listed as a liability (unique) on the Fed's balance sheet? it's because it's the only game in town that can print.

 

[freetrader]

 

[priestc]

Multiple currencies are as pointless and disruptive as multiple measurement standards (yard, meter, fathom, rod, cubit, etc).

I agree with you if talking about traditional paper currencies. Cash registers and purses/wallets are typically designed to only accommodate one type of currency. Multiple currencies a huge pain in the ass to deal with when it comes to paper bills. But digital currencies are a completely different story. The only way to use digital currencies is through a smartphone app, which can always abstract away the extra work required.

In any case you've neglected the reality of spreads when it comes to currency exchange.

On-chain exchanges like shapeshift do not have "spreads", they simply do not work that way. Either the exchange has enough liquidity to execute the exchange, or is does not. If it does not, then you can use another exchange that does have enough liquidity to make the exchange. Unfortunately there are zero shapeshift competitors, but my project multiexplorer will soon have an on-chain exchange to compete with shapeshift.

No matter how low this spread can be made, it will always be a positive real number. All positive real numbers (review grade school arithmetic here if necessary) are greater than zero so no amount of shiny UI design will ever make currency conversion "frictionless".

Yes, 1% friction is higher than 0% friction, but that is a pedantic argument. 1% friction is still low enough friction to be widely adopted.

As for the idea of holding a balance in every possible currency that you might want to pay someone in one day - if you think this is a good plan please diversify your savings accordingly. The advancement of the species benefits from the transmission vectors for retarded ideas losing as many financial resources as possible.

Why is holding balances in multiple currencies a bad thing? With the bitcoin's blocksize staying fixed a 1MB forever (which seems to be where BTC is heading), more and more merchants will start to accept altcoins. If DOGE is just as accepted as BTC, then why not hold some DOGE? If the wallet you use handles both currencies, then why not?

Imagine you are trying to pay fr gas at the gas station. You pay with a $10 bill, a $5 bill and a $1 bill. How is this any more inconvenient than paying for gas with $10 worth of bitcoin, plus $5 wirth of Litecoin, and $1 worth of Dogecoin. For the cashier it is the exact same process either way. For the payer, it is also pretty much the exact same process. All the extra "friction" is handled by software.

I don't think its fair to call any altcoin a "retarded idea" because the majority of altcoins are 99% the same code as bitcoin. To say any altcoin is retarded, you are by extension saying bitcoin is retarded.

 

[cliff]

@priestc - "Why is holding balances in multiple currencies a bad thing? "

Its not. I think money is inherently tied to places and purposes. People use money that's appropriate to where and how they live based on the values of their various communities. A one-currency globe or universe makes no sense to me in a world/universe where values and goals are not homogeneous. I doubt native people give a shit about bitcoin, the dollar, etc. - but they might care a lot about cattle, corn, etc. (shit geeks don't care about or have any experience with) as stores of wealth and mediums of exchange. Imposing a singular currency on everyone - including the judgement that non-bitcoin currencies are wrong, immoral, stupid, etc. - seems a little bit like totalitarian/paternalistic/elitist/dangerous technocratic bullshit; it also seems antithetical to the rationale underlying BTC's creation (a need for internet cash specifically).

 

[cypherdoc]

 

[Erdogan]

You can hope. I think the perception of risk connected with the halving had a small downward effect on the price, which I think now is over.

The big elephant that depress the price is the retarded block limit. We will see price rise according to how the market see the chance of getting bigger blocks. For example, a new miner finding classic blocks, a change in sentiment among miners, expression of interest for large blocks among relevant people in the industry. When the classic grace period kicks in, a big rise. The first bigblock, a big rise. Continuing rise when people see a stable system with bigger blocks. Then an irrational bubbly thing can happen.

 

[cypherdoc]

Yes, you cannot expand the monetary base out of thin air. You need credit to do it. Power and force (organized violence) is not thin air. It's something that the society pre-financed with hard work (tribute/protection money).

No economist could explain it better than Laurie Anderson:


O judge
O Mom and Dad
Mom and Dad

O judge
O Mom and Dad
Mom and Dad

Hi. I'm not home right now. But if you want to leave a
message, just start talking at the sound of the tone.

Hello? This is your Mother
Are you there?
Are you coming home?

Hello?
Is anybody home?
Well, you don't know me, but I know you

And I've got a message to give to you
Here come the planes
So you better get ready
Ready to go
You can come as you are, but pay as you go
Pay as you go

And I said: OK. Who is this really? And the voice said:
This is the hand, the hand that takes
This is the hand, the hand that takes
This is the hand, the hand that takes
Here come the planes.
They're American planes
Made in America
Smoking or non-smoking?

And the voice said: Neither snow nor rain nor gloom
of night shall stay these couriers from the swift
completion of their appointed rounds.

'Cause when love is gone
there's always justice
And when justive is gone
there's always force
And when force is gone,
there's always Mom.
Hi Mom!

So hold me, Mom, in your long arms
So hold me, Mom, in your long arms
In your automatic arms.
Your electronic arms.
In your arms.
So hold me, Mom, in your long arms
Your petrochemical arms
Your military arms
In your electronic arms

here Bob Murphy explains how debt has taken on "moneyness". there's so much of it with such perceived "high quality" (UST's) that it "acts" like money. that's what blew up in 2008, overnight swaps acted like money; until it didn't:

More of that credit has taken on “moneyness” in the market for collateral than we Austrians like to admit—and I’d argue that most Austrian definitions of money mistreat much of that credit, which has taken on “moneyness” in the shadow banking system (e.g., Treasury/GSE debt functions as base money in these markets).

https://caitlin-long.com/2016/07/14/my-interview-by-bob-murphy-financial-markets-economics-emh-more/

 

[remile]

Imposing a singular currency on everyone - including the judgement that non-bitcoin currencies are wrong, immoral, stupid, etc. - seems a little bit like totalitarian/paternalistic/elitist/dangerous technocratic bullshit; it also seems anti-antithetical to the rationale underlying BTC's creation (a need for internet cash specifically).

Money is a defensive weapon which allows the humans who wish to benefit from cooperating to protect themselves from predators who exploit them.

Establishing a new monetary tradition is a war in which the predators use every tool at their disposal: force, misinformation, psychological warfare, etc.

 

[cliff]

@remile - I'm not sure i disagree with your post, I'd just add that all humans are not necessarily on the same side of that war - choosing a money is not binary. The world in which we live is about power (to be clear, I wouldn't say those with power are necessarily predators), and power is ubiquitous. Power dynamics and power-based relationships (master/servant, doctor/patient, expert/lay person, teacher/student, elder/pleb, physiatrist/"insane") may be simultaneously multi-polar and zero-sum (i.e., one has power at the expense of those who don't). Those who define and determine what is money w/i their respective communities have wield massive power whenever their actions declare what is truth and define and impose subjectivity on various actors in an ecosystem (sometimes called "disciplinary power" a la Foucault et al. - IIRC). Defining what is money, the criteria therefor, and who is an authority on the topic is the type of knowledge production that Justus R was talking about on the radio show a few days back - essentially, knowledge is power. In Bitcoinland, for example, there's an ongoing and inevitable power struggle involving who gets to define what bitcoin is and who gets to speak/code (i.e, who is a "Core" dev, who is among the "technical community.") Competing traditions on these subjects exist now - just look at the standards for peer review in the various factions w/i the ecosystem.

 

[cypherdoc]

There's too much opportunity to stay in banks; even if it is to go start a block chain startup.

The departures underscore the difficulty the finance industry has had hiring and retaining tech talent. Whether it’s the lure of working on their own, or the buzz of Silicon Valley, engineers have no shortage of options. Similarly, a group of developers on Deloitte’s blockchain team left last month to create their own startup.

http://qz.com/729786/jpmorgan-lost-two-leaders-on-its-blockchain-project/

 

[bitsko]

Stolfi comments on winklevoss ETF

https://www.sec.gov/comments/sr-batsbzx-2016-30/batsbzx201630-2.htm

 

[cypherdoc]

I think he was too negative. Bitcoin is its own self contained financial system in which coins flow from address to address. Anyone from the outside can choose to enter the system by trading fiat or some other asset for a seat at the table that will always be there forever. And the table can't get bigger; which is s good thing and fair to those who participate. If the participants want them to be money then money it can be. let them be.
[doublepost=1468555667,1468555061][/doublepost]Stolfi apparently doesn't know the definition of a ponzi scheme; it requires a central entity that coordinates a scheme for his own profit. Madoff being a perfect example.

 

[yrral86]

Stolfi comments on winklevoss ETF

https://www.sec.gov/comments/sr-batsbzx-2016-30/batsbzx201630-2.htm

Penny stocks and Ponzi schemes have someone removing value from the system. Bitcoin does not.

Also, the concern about price manipulation is silly. If someone manipulates price on Gemini, they are just handing money to arbitragers who will balance supply and demand across exchanges.

 

[cliff]

@cypherdoc
RE: "I think he was too negative" - I agree, and I think he makes terrible arguments that are irrelevant to what is happening w/ an ETF. He makes weird analogies that make for good forum and cocktail party banter, but probably not credibly sounding public comments. This was a good one:

Thus, bitcoins are more like "penny stock", shares of a company with no assets, no products, and no staff; or shares in a pure ponzi schema, like Madoff's fund. The value of bitcoin is supposed to come only from the existence of an (allegedly) secure ledger that records the distribution of coins among numerous accounts ("addresses" in the system's terminology), and therefore allows their use as a means for internet payments. But penny stocks and ponzi funds offer that capability, too.
​

Reference to "Madoff" does not add to his argument substantively, it's purely a rhetorical ploy on still raw memories. If I were the Winks, I'd be furious that this dude just publicly - to an agency with police powers - associated my investment offering and intentions with the type of evil investment operation that sent a guy to jail for 150 years (I mean, he's not calling them incompetent . . . ) .

Additionally, since when are "penny stocks" wrong, illegal, etc.? I don't think he really knows what this term means and he's negatively judging a lot of good people trying to make legal living in this world. Like with the "Madoff" reference, use of the phrase "penny stock" serves no purpose other than to propagandize and pre-judge - its pejorative.

"Ownership of bitcoins does not yield any dividends or interest. While eventual users of bitcoin as a currency would be required to pay transaction fees, those fees will not be paid to bitcoin holders, but to the "miners" that maintain the public ledger."
​

^Why does this matter for the purposes of running an ETF? A lot of stocks and other assets held by ETFs don't generate dividends or bear interest either - there is a ton of strategic and legal opportunity for investors here. For example, some people want to avoid the "ordinary income" tax rate as much as possible because its greater than the tax rates on the other categories of income. Dividends and interest get treated as ordinary income whereas gain from the sale of a long-term capital asset (an asset owned for at least a year and a day) is taxed at the lower capital gain tax rate. For a lot of folks, the long-term capital gain is a primary source income.

The only way to make a profit by investing in bitcoins is by selling them to other investors, for more than their purchase price. Thus, bitcoin has the essential character of a penny stock, or a pyramid schema: the profit of early investors comes entirely from the investment of later ones.​

^And . . . ? Then it must also be like real estate, gold, antiques, fine art, etc.

Investment in bitcoin does not contribute to mankind's real wealth or well-being: it does not finance the creation of any material goods or real services. On the other hand, it has ruined many naive investors who have been induced to put their savings into it, by spurious promises of fantastic price increases in some undefined future.
​

^This is just getting silly now.

In my view, since it is primarily used for investment, bitcoin should be regulated like a security; in which case it would probably get from the regulators the same treatment that a penny stock or ponzi fund would get.
​

^I don't think this dude gets that 1) the applicants are striving for voluntary compliance with all kinds of laws (unlike Madoff) - especially securities laws, and 2) Shares of a fund (i.e., securities) are being offered to investors, not Bitcoins, and that the overseeing agency is the Securities and Exchange Commission. Many of the defects in bitcoin-as-an-investment he complains about are cured by offering ETF shares and not bitcoins directly. For example, ETF share owners will be identified - this solves his anonymity belly-ache. Overall, investing in BTC via a regulated ETF adds loads of consumer protection that investing in bitcoins directly can't offer. For a fund manager, the ETF mitigates some risk typically associated with investing in high risk stocks, funds, and other assets.

 

[cypherdoc]

We will see price rise according to how the market see the chance of getting bigger blocks.

careful about this. thing is, there's only a small slice of ppl like us who understand the blocksize debate. and that's just within the community, as small blockists sure don't get it along with who knows how many miners and users. meanwhile, all new users see along with simple technical investors, is a bullish chart that bottomed quite a while ago back in September and has been swinging up quite strongly. all they see is a bull flag setting up with a consistently rising 200 DMA. and that's all they need to pile in. in some respects, they might even be smarter than you by inadvertently (knowingly or unknowingly) not paying attention to the blocksize debate. this is how the market distributes losses equally btwn early and later adopters. it doesn't play favorites to those who think they are smarter than the others. which is why it has never been fair to begrudge early adopters. look at @rocks and /u/Vigkiwi44 (early adopters) who exited at 300 & 400 (whatever his name). imo, they've lost, at least in the short term the gains they could've had.

after all, there will only be a few of us bulls/early adopters who make it all the way to the end and why most ppl investing in cryptocurrencies will lose money.

 

[albin]

Stolfi comments on winklevoss ETF

https://www.sec.gov/comments/sr-batsbzx-2016-30/batsbzx201630-2.htm

I doubt that the SEC has any interest in what are essentially lay comments from someone completely outside of his subject matter expertise.

 

[cypherdoc]

hasn't been fixed yet:

Mempool DoS risk in segwit due to malleated transactions#8279

https://github.com/bitcoin/bitcoin/issues/8279

 

[jonny1000]

Stolfi apparently doesn't know the definition of a ponzi scheme; it requires a central entity that coordinates a scheme for his own profit. Madoff being a perfect example.

I guess your comment here is technically true, a ponzi scheme is where an operator pays returns to investors from new capital by new investors, rather than from profit earned through genuine operations. I guess Bitcoin does not fall into this category, because there is no operator and no returns are paid.

However, I think Stolfi is fair to contrast Bitcoin with a ponzi scheme as Bitcoin does appear to share some characteristics with them, depending on how you look at Bitcoin. For example you could argue that if nobody used Bitcoin, then there would be no miner fees and no demand for bitcoin to pay the miner fees, then miner incentives would fall to low levels and the system would collapse. Therefore one could argue Bitcoin falls to zero if people do not use it, which is kind of like a ponzi scheme, but I guess you could argue it is the same for almost all businesses.

Another point of view is that Bitcoin is unique in that its immutable and robust ledger has intrinsic and inherent value, providing utility to customers. There is therefore genuine demand for bitcoin to pay miner fees, which enable one to use the ledger. These miner fees provide an inherent usage for bitcoin, that one could argue distinguish it from a ponzi scheme.

I hope this explains to you why a fee market and fees are so important to many in the community. It is one of the key characteristics which provides inherent value to Bitcoin. These features are not necessary normal or direct characteristics of money (store of value, unit of account, medium of exchange). Fees therefore go right to the core of establishing bitcoin as money. For example many argue gold is directly useful as money (store of value, unit of account, medium of exchange), but gold also has inherent value (e.g. jewelry, electronic conductor, teeth ect). In my view the definition of inherent value in this context is non monetary uses. I think these non money uses for gold play and have played a key role in helping establish it as money in the past. I think the same may be true for transaction fees in Bitcoin.

Unfortunately there seems to be a lot of division in the community about the philosophy of fees in the system. I really hope we can debate these issues in the future in a more respectful way.
[doublepost=1468560731][/doublepost]For example:

The big elephant that depress the price is the retarded block limit.

Please do not call the limit "retarded". The limit is a crucial and integral part of the system to many in the community. How do you seek to persuade them if you do not respect them and imply they may be retarded? Why not say that you are trying harder and harder to understand the many valid reasons for the limit, but on balance it might be a good idea to increase the limit. One could then have a patient and polite debate about the issue, while respecting the rights and ability of others to veto any increase if these people are significant in number and they cannot be persuaded.

 

[cypherdoc]

>I hope this explains to you why a fee market and fees are so important to many in the community.

i guess i'm flabbergasted that you'd think i think tx fees aren't important to miners. big blockists are all about defending tx fees for miners which is exactly why we don't want to see them siphoned off to LN hub operators. it's the way we get there where we differ. big blockists want a much higher tx throughput with cheaper fees per tx but larger aggregate fees thru volume, all for the benefit of miners (hint: we don't have any COI). this should be an easy concept to understand as there are multiple examples of this in the real world. big blocks could even be used as loss leaders to grow Bitcoin usage worldwide to in essence capture market share before regulatory powers try to squash Bitcoin. 1MB enforced fee mkts don't work. i'm not going to go thru all the arguments about why; you should have them at your fingertips by now but apparently you don't . this is why more debate and negotiation with ppl like you is hopeless. it is time to HF.