Is anyone else starting to become a bit excited?

q85dw7osi4lebg

Dohnjoe wrote: »

It's not. For example, cigarettes can be used as a type of money in prison, but they are unsuitable as a currency

You're just making up stuff now.

Dohnjoe

Addison Fancy Macrame wrote: »

You're just making up stuff now.

https://www.educba.com/money-vs-currency/

cnocbui

Dohnjoe wrote: »

According crypto blog after crypto blog. According to Venezeulans themselves, a tiny amount of people, with the relevant access, would attempt to buy or sell BTC

Apart from very isolated cases there was no widespread use whatsoever, people weren't buying groceries, they weren't paying rent. Dash terminals weren't (and aren't) being used with Dash (not to mention Dash plummeting over 90% in value)

There was niche use by people with know-how and access to functioning internet/electricity to take advantage of BTC

So just like gold bullion then.

makeorbrake

amacca wrote: »

imo Bitcoin whichever way you cut it is a series of ones and zeroes stored in computer memory somewhere.....this to me doesn't mean it doesn't have value and couldn't appreciate wildly but it could also devalue rapidly....now I'm aware gold could too but over the long term if you could hold I reckon gold would be a much better option as things stand and will always be guaranteed to have some value/almost guaranteed to recover because of its physical properties,

There's a couple of things to unpack there. It seems that you are having trouble appreciating the value of something that is code as opposed to something (gold) that is physical. millions of people struggle with that same value proposition. However gold being physical doesn't make it better than Bitcoin.
People go on about the physical properties of gold but for the most part, gold is used as a store of value and less so for other uses.

amacca wrote: »

limited supply etc....id argue short of human space travel developing and finding a solid gold planet to mine or a vast new deposit somewhere gold is by far and away the safer medium to long term bet.

Asteroid mining or gold mining under deep seas may be unlikely but they're not impossible in the future. However, you seem to be confused with regard to the limited supply of bitcoin. It's one of its key characteristics as it has been designed in.

amacca wrote: »

it may not appreciate madly but it has less chance of depreciating wildly to the point where it ends up at zero with no chance of recovery....I'm not sure you can say the same for any crypto currency......you can't lose confidence in the value of a physical substance (which stubbornly refuses to blink out of existence) especially one that has a use in the same was as you can the value of a piece of information/code which could have an unknown sell by/best before date

You are struggling with the value proposition of something physical versus computer code. It is incorrect to say that you can't lose confidence in something that is physical. At the end of the day, we as humans assign value - regardless of whether its something physical or computer code.
That gold has a long established track record as a store of value - absolutely. Other than that, you are right to think that there is far more potential upside with Bitcoin as this (what's happening right now) is a once in a lifetime event. The coming of age of digital currency. The speculation will dissipate once it establishes itself.

amacca wrote: »

I just think right now gold represents the better long term bet as a store of value...I know which id be picking if I could have a million euros worth of either storage headache aside.....I mean try bartering for food/survival with bitcoin if things really did go to ****

If you're talking about food bartering, then you have far greater problems and it won't make a damn bit of difference whether its gold or Bitcoin.

amacca wrote: »

however i would take 10/20k of my million and very much enjoy a speculative punt on certain crypto assets in the hope of fat stacks

Yes, there is very much a speculative angle to crypto right now. However, I never found myself interested in this space for the speculative interest some years ago - I was interested in what it can do for society - and it still can and will.

Dohnjoe wrote: »

Indeed, but money and currency are different things

Bitcoin is sound money whereas FIAT is unsound money. Bitcoin is in the early stages of developing as a store of value. As it evolves, it can and will be used as a medium of exchange and can be used right now as a medium of exchange.

Dohnjoe wrote: »

I am acknowledging it's current state. Unless it changes it's characteristics and properties dramatically, then that will be it's future state, it's basic maths and economics.

This is your fundamental mistake. It's about the ecosystem that surrounds it as much as it is Bitcoin itself. Fail to take that into consideration and you fail to see the overall proposition and the evolution that lies before it.
We could go all the way back to 1995 and on the basis of your rationale, we would write off the internet.

Dohnjoe wrote: »

If someone wants to label Dash, BTC, NANO, digital shares, gold certificates, warrants, etc as a currency, they can, it doesn't make them currencies.

They're currencies if they're being used as a medium of exchange - and to those who do use them as a medium of exchange.

Dohnjoe wrote: »

According crypto blog after crypto blog. According to Venezeulans themselves, a tiny amount of people, with the relevant access, would attempt to buy or sell BTC

And that doesn't mean that this won't change. There's a whole host of things that have to change if Bitcoin and/or crypto are to enjoy broader utilisation. That such a thing has not happened does not mean that it won't.

As an example, one of the major criticisms thrown at Bitcoin for use as a medium of exchange has been the fact that hardly anywhere accepts it. In one fell swoop, a startup in the crypto space is single-handedly changing that. Moon Technologies are rolling out an offering that has opened up amazon to all holders of Bitcoin. They will continue to roll out over the next year to other platforms and independent ecommerce stores (without the necessity to enable one by one - as it's done at a payment processor level).

Further innovation is needed in the space - it's happening but it takes time.

Dohnjoe

cnocbui wrote: »

So just like gold bullion then.

BTC, yeah

The plus side is it's digital. The negative side is not everyone has the requisite access - although phone tech is certainly helping that. In an economy spiraling out of control a decentralised stable digital currency with easy access and wide acceptance would be a godsend, but that's just proving so elusive so now, with so many barriers (and all the usual storm-clouds on the horizon)

makeorbrake

Dohnjoe wrote: »

BTC, yeah

The plus side is it's digital. The negative side is not everyone has the requisite access - although phone tech is certainly helping that. In an economy spiraling out of control a decentralised stable digital currency with easy access and wide acceptance would be a godsend, but that's just proving so elusive so now, with so many barriers (and all the usual storm-clouds on the horizon)

You can't expect something like this to upack itself on day 1 and work seamlessly for something as fundamental as this (store of value / medium of exchange and unit of account). To the naysayers, they suggest that Bitcoin has achieved nothing in ten years. To those that see where things are headed, it's achievements over that duration have been outstanding.

Dohnjoe

makeorbrake wrote: »

They're currencies if they're being used as a medium of exchange - and to those who do use them as a medium of exchange.

They aren't national tender, so their acceptance as currency anywhere is highly limited.

In practice usage as a currency is very low, almost nonexistent. What little use there is in these types of countries is typically speculation and hedging.

Will that automatically change in the future? who knows. It could even go backwards. Which is much more development is needed, among other factors.

Kickstart1.3

The main issue I have now with Bitcoin is the price! I didn't have an issue speculating when it was $150 as you could buy a couple every week if you wanted. Its another story to have to fork out $10k for one knowing that the likes of me got them so much cheaper. But then again I remember how depressed I was having missed out when they were a few cent.
The only threat I see to Bitcoin for now is Government intervention at the exchanges

makeorbrake

Dohnjoe wrote: »

They aren't national tender, so their acceptance as currency anywhere is highly limited.

Well, that's not a major issue right now. However, that's the core of the debate thats going to be ongoing over the next while. Why should governments have a monopoly on money.
As it stands what you mention is not an issue. 353 million items are available for purchase using Bitcoin on amazon.com alone (via a browser extension). More widespread coverage is in the pipeline.
The issue will be if states ban bitcoin outright - would kill it speculatively but would not kill bitcoin itself. It would just mean a much slower progression rate - and the fact that they would have NO control whatsoever in a totally adversarial scenario.

Dohnjoe wrote: »

In practice usage as a currency is very low, almost nonexistent.

Nonexistent? - no. Very low - yes. However, there are all manner of reasons as to why that's the case. There are some of the brightest minds around working on resolving said problems (UX, education, etc. etc.) - but that will take time.

Dohnjoe wrote: »

What little use there is in these types of countries is typically speculation and hedging.

You mean use in countries where FIAT is failing citizens? Sure - it tends to be the wealthy and tech savvy that have access to Bitcoin in those circumstances. There's a very interesting article on Coindesk as regards exactly that issue (as to why its use has not been more pronounced in Lebanon right now).
This is all going to take time.

Dohnjoe wrote: »

Will that automatically change in the future? who knows. It could even go backwards. Which is much more development is needed, among other factors.

What I find amongst many naysayers is the assumption that Bitcoin hasn't reached mass appeal today - and so on that basis it's done for. That's certainly not my view. I'm seeing the smartest of people move from other industries into the crypto space. That's happening for a reason.

Kickstart1.3 wrote: »

The main issue I have now with Bitcoin is the price! I didn't have an issue speculating when it was $150 as you could buy a couple every week if you wanted. Its another story to have to fork out $10k for one knowing that the likes of me got them so much cheaper. But then again I remember how depressed I was having missed out when they were a few cent.

That's a misconception and a common one. People sometimes struggle with the notion of buying a fraction of a Bitcoin - Bitcoin has 8 places of decimal. So you can buy whatever you want to spend.

Kickstart1.3 wrote: »

The only threat I see to Bitcoin for now is Government intervention at the exchanges

From the speculative point of view - for sure. If they go for a full court press, anyone holding will suffer in the short to medium term. But governments wont kill bitcoin - they can only retard its rate of progress and later, they will have no means of controlling any aspect of it.

Dohnjoe

makeorbrake wrote: »

Why should governments have a monopoly on money.

Because it's the least worst system we've come up with for national tender. Leaving it up to private corporation, or the secondary value of a precious metal doesn't cut it anymore

No issue with secondary decentralised money/currency - as long as it's practical and robust

353 million items are available for purchase using Bitcoin on amazon.com alone (via a browser extension).

Yeah it's cool, but no one uses it. Also it just converts it to fiat at the other end. BTC is an investment asset, one that has been climbing for years, makes no logical sense to spend it. Even less sense to spend it then replace it.

makeorbrake

Dohnjoe wrote: »

Because it's the least worst system we've come up with for national tender. Leaving it up to private corporation, or the secondary value of a precious metal doesn't cut it anymore

No issue with secondary decentralised money/currency - as long as it's practical and robust

I don't believe they should have a monopoly. This has been something that nobody has questioned and I'm glad that conversation is being had now.

Remember, if government money doesn't fail citizens, then there's every chance that people will have no reason to use anything else. The presence of alternatives is likely to mean that governments and central banks will have to raise their game. That's a good thing for ordinary people.

Dohnjoe wrote: »

Yeah it's cool, but no one uses it.

Christ on a bike, the startup only enabled the option a few months ago!

Dohnjoe wrote: »

Also it just converts it to fiat at the other end.

So what? It means that anyone who holds crypto can buy whatever the hell they like with it. That is one more item ticked off the list of fixes and improvements that are needed.

That it's a conversion tool matters not. It's pretty seamless. Naturally, primary support by the likes of Amazon would be optimal. That will follow. In the meantime, innovative work arounds like this one build towards that eventuality.

Money being converted back - I have no issue with that. However, that may not always be the case - over the fullness of time.

Dohnjoe wrote: »

BTC is an investment asset, one that has been climbing for years, makes no logical sense to spend it.

Austrian economics. Sound money chases out unsound money. Again, people need to get their heads around the time value of money. Maybe people will better appraise how and what they spend their money on? Maybe we shouldn't have a society in which everyone is up to their eyeballs in debt. There are broader implications here.

We've established that it is at its formative stages as a store of value. That doesn't mean it can't go on to being a (more utilised) medium of exchange.

Bob24

makeorbrake wrote: »

Why should governments have a monopoly on money.

One could rightly answer: because national currencies and monetary policies are a key expression of national sovereignty, and in democratic countries national sovereignty itself is the key conduit for democracy (proper democracy only exists in this world at a national level with nation states as a way to enforce the outcome of democracy). I.e. if you are challenging a government’s capacity to enact monetary policies by introducing competing money you are reducing the scope national sovereignty and thus reducing the scope of democracy.

Now of course one could also revert back and say that democracy is imperfect anyway and/or that FIAT currencies have been poorly managed (and there would be truth in both statements as well), as a way to justify taking away that means of sovereignty.

But at the end of the day it is a very complex question with consequences which are hard to imagine. Also that question could dangerously be translated to other areas. For exemple, it is deemed OK to remove governments’ monopoly on currencies justifying it by the fact that it has been used in an imperfect way, then the next question someone is bound to ask is: then why not also questioning governments’ monopoly on legitimate violence (only the police and the army can legitimately make uses of violence) if I similarity feel that monopoly is being used imperfectly? (and this can be used to justify any type of illegal violent behaviours)

makeorbrake

Bob24 wrote: »

One could rightly answer: because national currencies and monetary policies are a key expression of national sovereignty, and in democratic countries national sovereignty itself is the key conduit for democracy (proper democracy only exists in this world at a national level with nation states as a way to enforce the outcome of democracy). I.e. if you are challenging a government’s capacity to enact monetary policies by introducing competing money you are reducing the scope national sovereignty and thus reducing the scope of democracy.

'One could 'rightly' answer? I'd challenge the 'rightly' part. You're taking a very extreme view here. I acknowledge the need for government in order to facilitate advanced societies. However, I also acknowledge that power corrupts, that governments are made up of people - and people are not infallible. They make mistakes and act in the interests of themselves or other vested interests or simply not in the public interest all of the time.
For that reason, government should be kept as small as it possibly can. Money and state should be teased apart in the same way as church and state needed to be.


As regards setting monetary policy, Austrian Economics indicates that's not necessary. There's an assumption that we need central banks tinkering with monetary policy. There's an assumption that this is to the benefit of citizens. I doubt that to be the case - and those who follow Austrian Economics harbour such doubts too.

There's nothing wrong with a bit of healthy competition. Remember, if government/central bank money is working for society, then likely there will be no seismic shift to corporate or decentralised money. If there is a seismic shift, it means that FIAT currency in that given jurisdiction has failed. Why not give governments and central banks and incentive to serve citizens better? Seems like a no brainer to me.

The notion that you present that this would be 'reducing the scope of democracy' is wrong. It's completely the other way around.

Bob24 wrote: »

then the next question someone is bound to ask is: then why not also questioning governments’ monopoly on legitimate violence (only the police and the army can legitimately make uses of violence) if I similarity feel that monopoly is being used imperfectly? (and this can be used to justify any type of illegal violent behaviours)

I don't see that necessarily follows.

Bob24

makeorbrake wrote: »

The notion that you present that this would be 'reducing the scope of democracy' is wrong. It's completely the other way around.

The way I look at it, if you are reducing the capacity of a governement to enact monetary policy, you are reducing the scope of national sovereignty, and thus reducing the scope of democracy (as democracy need a government to be enforced through national sovereignty). Pretty clear and straight forward inference (and again while saying that I am not saying there would only be disadvantages to doing that, just that they exist and need to be acknowledged).

Can you explain how you feel it is the other way around in terms of reducing the scope for democracy?

Dohnjoe

makeorbrake wrote: »

We've established that it is at its formative stages as a store of value. That doesn't mean it can't go on to being a (more utilised) medium of exchange.

If someone wants to use a volatile asset as a means of payment when a stable alternative is available, they are either a speculator or not too bright

makeorbrake

Bob24 wrote: »

The way I look at it, if you are reducing the capacity of a governement to enact monetary policy, you are reducing the scope of national sovereignty, and thus reducing the scope of democracy (as democracy need a government to be enforced through national sovereignty).

If it can't effectively enact monetary policy, it would mean that people would have shifted to another form of money en-masse. If that has played out, then the FIAT money in question (and the government/central bank behind it) has failed citizens within that jurisdiction. If it doesn't fail citizens, then most likely they will not have moved en masse to another form of money.

The whole idea of government (in theory) is to make peoples lives better. And thats fine insofar as its doing that.

Bob24 wrote: »

just that they exist and need to be acknowledged).

As above - it's acknowledged that monetary policy would fail to be effective if people switch to another form of money - but then, that same monetary policy would have been wayward in the first instance - as it would have led people to move en-masse to another form of money.

Bob24 wrote: »

Can you explain how you feel it is the other way around?

I'd take the view that we need light touch government and regulation - not heavy handedness. Trying to prevent people from free choice is not the way to go when it comes to money.

makeorbrake

Dohnjoe wrote: »

If someone wants to use a volatile asset as a means of payment when a stable alternative is available, they are either a speculator or not too bright

There are many reasons why they would do so - and it doesn't mean that they fail any intelligence test. Furthermore, you seem to believe that Bitcoin will always be volatile and that it will always be disproportionately a speculative asset. I don't.

However ,in defence of the point you're making there's this...$1 million worth of Venezuelan bolivar in 2013 would be worth less than $0.37 today...so yes, get rid of the unsound money first - provided that's convenient for you.

Dohnjoe

makeorbrake wrote: »

If it doesn't fail citizens, then most likely they will not have moved en masse to another form of money.

The whole idea of government (in theory) is to make peoples lives better. And thats fine insofar as its doing that.

I fully agree

I'd take the view that we need light touch government and regulation - not heavy handedness. Trying to prevent people from free choice is not the way to go when it comes to money.

Unfortunately people and banks and corporations can also take advantage of lax regulation and a "light touch". We've had bitter experiences of this, including most recently the 2008 fin. crisis. A good balance is required.

makeorbrake

Dohnjoe wrote: »

Unfortunately people and banks and corporations can also take advantage of lax regulation and a "light touch". We've had bitter experiences of this, including most recently the 2008 fin. crisis. A good balance is required.

Hmm...I guess I need to qualify my comment a little. Light touch insofar as its possible but everything needs to be weighed up on its own merits. In terms of the item at hand, I'm thinking that competition between government and decentralised money could and should be a good thing for society.

Bob24

makeorbrake wrote: »

I'd take the view that we need light touch government and regulation - not heavy handedness. Trying to prevent people from free choice is not the way to go when it comes to money.

The question was how do you feel that reducing a government's capacity to enact monetary policies is doing the opposite from reducing the scope of democracy. You are not addressing it here.

With democracy, if the majority wants their government to enact certain heavy handed monetary policies, the government should enact those policies (and yes, the majority can make and has made very bad decisions - but if the priority is democracy, so be it).

If you prefer light touch governments it is very fine (I myself also think central bank interventions have became counter-productive and we are sleepwalking into a a never-ending cycle of excessive debt, money printing, and muted interest rates which will lead to a monetary crisis). However if the way to achieve that light touch government is to restrict the government's capacity to enact policies, I don't see how it is enhancing democracy. The democratic way is rather to convince the majority that non-interventionism it is the way to go (and for example in your case to elect politicians which are from the Austian school of economics and strictly against things like quantitive easing, and will impose those ideas to central banks - maybe going back to hard currencies backed by gold or even a cryptocurrency if this is what people voted for).

makeorbrake

Bob24 wrote: »

The question was how do you feel that reducing a government's capacity to enact monetary policies is doing the opposite from reducing the scope of democracy. You are not addressing it here.

Ok, but I'd take issue with the framing of the question. The crypto movement are not doing anything to interfere with centralised government money. The issue that you cite comes about in the event that people stop using it in really large numbers. If that has happened, FIAT money has failed citizens. That wouldn't be the fault of crypto or those that propose the use of crypto.

Bob24 wrote: »

The democratic way is rather to convince the majority that non-interventionism it is the way to go (and for example to elect politicians which are from the Austian school of economics and strictly against things like quantitive easing, and will impose those ideas to central banks).

I'm in no way an anarchist but I very much recognise that whilst 'democratic' government in its current form is as good as we've mustered, it is also inherently and deeply flawed alongside that.
Trustless systems (for example, blockchain) should be used increasingly - because regardless of 'democratic' systems, people within those systems either willingly or otherwise - take the wrong options - whether thats incompetence or fulfilling the agenda of others or their own agenda.

In any event, the decentralised crypto movement is a tonic as it has done the opposite of what you suggest. Rather than trying to fight from within, it's simply a completely detached system of its own - and people can opt to use it or not as they see fit.

q85dw7osi4lebg

Some nice volatility tonight.

Legs down, I'll buy.
Legs up, I'll buy.

Dohnjoe

Addison Fancy Macrame wrote: »

Some nice volatility tonight.

Legs down, I'll buy.
Legs up, I'll buy.

You are lucky you are doing this in 2019, and not 2018. That was brutal.

Arrival

Dohnjoe wrote: »

You are lucky you are doing this in 2019, and not 2018. That was brutal.

What? 2018 had some nice lows to buy through, same as 2019

Dohnjoe

Arrival wrote: »

What? 2018 had some nice lows to buy through, same as 2019

??

The lowest point was basically December. Almost anyone trying to DCA in 2018 made a loss. Most cryptos went down 90% to 99% that year.

Go from Jan 1st to December 31 2018
https://coinmarketcap.com/currencies/ethereum/ (or virtually any crypto)

Bob24

makeorbrake wrote: »

Ok, but I'd take issue with the framing of the question. The crypto movement are not doing anything to interfere with centralised government money. The issue that you cite comes about in the event that people stop using it in really large numbers. If that has happened, FIAT money has failed citizens. That wouldn't be the fault of crypto or those that propose the use of crypto.

Anyone actively promoting cryptocurrencies (besides basic stablecoins) is either misguided or lying if they say they don't see crypto as competition for national currencies. And once you are competition for it and breaking the state monopoly, you are of course reducing the scope of what the state can do.


Again, I am not saying there are no issues with national currencies (quite the opposite) nor that cryptocurrencies are bad. I am rather stating the obvious that if you introduce competition for a state monopoly your are of course reducing state influence in that area and thus reducing the scope of what democracy can do related to it. And btw sometimes it is more than fine not to have control: the majority neither needs nor wants democratic control to chose the colour of everyone's car in the country, so there is no reason for the state to have a tight control on paint supply.

Also, it is important to understand that giving an individual selfish choice to opt-out of a state monopoly isn't necessarily neutral nor democratic. For exemple if you introduce a parallel status whereby you give people a choice to elect to stop paying for health and welfare related taxes and PRSI contributions in exchange for privately managing their health and unemployment risks, a number of fairly wealthy people will gladly go for it. You can say: what's the arm, it is just a small group of people and no-one is doing anything to interfere with centralised government welfare, it is just more options for citizens and if individual people are leaving it just means the centralised system has failed them. But what happens next? Because a few large contributors have left, the government either needs to cut benefits or to increase personal contributions. The knock-on effect of those adjustments is that from a selfish perspective the national system becomes a bad deal for a new cohort of slightly less wealthy people who are now leaving as well. And it becomes a vicious never-ending circle whereby at every step the government needs to increase contribution or reduce benefits again as a reaction to more people leaving, which gets yet another cohort of people to leave and forces the government to make even more adjustments ... and so on until absolutely everyone has left.
My point is: if at the beginning you had had a democratic vote to let people decide whether they want to abolish the welfare state, a majority would have voted against it as all-in all they feel it works OK for them. But if instead of voting for abolition you present it as a new freedom to opt-out of the state monopoly and handle your own affairs yourself or via private insurance? Effectively you are (consciously or not) pursuing the exact same goal and you are going to abolish it by giving a small minority the means to trigger an unstoppable sequence of events which will force the majority to follow that move (even though as a group the majority didn't want that, you have created a situation whereby the alternative system for the government monopoly is separating that majority in smaller cohorts which one after the other are incentivised to give another kick to the dying government monopoly - which they wouldn't have done had they not been separated).

And as I keep saying, I am not trying to say crypto is all bad here, and if I was replying to a crypto basher I would have written completely different posts explaining what I think is wrong with the current global monetary system and how crypto could benefit. But it is important to see both sides of the story.

q85dw7osi4lebg

Dohnjoe wrote: »

You are lucky you are doing this in 2019, and not 2018. That was brutal.

In Crypto since Bitcoin crossed 12k on the way down first time. Enjoyed the ups and downs.

Once my Sats are stacking I'm content.

makeorbrake

Bob24 wrote: »

Anyone actively promoting cryptocurrencies (besides basic stablecoins) is either misguided or lying if they say they don't see crypto as competition for national currencies. And once you are competition for it and breaking the state monopoly, you are of course reducing the scope of what the state can do.

Ok, I'll rephrase a little to avoid any misunderstanding. Decentralised crypto stands outside of existing systems. So its not directly interfering with anything. That it could act as competition to government and corporate money, absolutely - I brought up the point. That competition could be extremely healthy to society.

As regards 'reducing the scope of what the state can do', that will only come into play if there's mismanagement. If there's mismanagement of a FIAT currency, then and only then would there be a seismic shift to a decentralised currency. So - as I see it - it's in their hands. They screw up and fail to serve citizens equitably, then they reduce the scope of monetary policy tinkering themselves.

Bob24 wrote: »

But it is important to see both sides of the story.

I won't comment on your other examples or we will end up further adrift of the core topic...other than to say that there are no easy answers with this stuff. However, from my perspective, the more we can rely on technology to provide more equity, the better. People are always the variable and they will always be - and that's where systems fall down. Using technology to build systems that assume a lack of trust is the way to go. A 'don't trust, verify' approach.
On seeing both sides, all day long.

Bob24

makeorbrake wrote: »

As regards 'reducing the scope of what the state can do', that will only come into play if there's mismanagement.

Not necessarily, as per the exemple I gave on how a competing system can gradually completely replace a government authority/prerogative against the original will of the majority and in spite of the majority thinking the government was acting in its general interest.

Mismanagement is a subjective concept and can be a proxy for short term selfish interest as opposed to long term general interest.

But yes definitely agree there is no simple answer to these things, and that drastic changes are needed to avoid a global monetary crisis in the coming years.

makeorbrake

Bob24 wrote: »

Not necessarily, as per the exemple I gave on how a competing system can gradually completely replace a government authority/prerogative against the original will of the majority and in spite of the majority thinking the government was acting in its interest.

There is some merit in the other examples you gave as regards cause and effect. However, we're really just dealing with this one.

The way I see it, most likely crypto and FIAT can co-exist. I don't expect FIAT to crumble/capitulate anytime soon. Now, in nations where there is complete financial mismanagement, that's a little different. It may be at some stage in the future, people would switch in such a circumstance. However, lets suppose that is the case. Then how would it be 'in spite of the majority' in that instance?

You may say that it didn't go through existing democratic structures and so it's against the will of the people in that way - but if people themselves end up using it in droves, that would be another 'vote' on the issue right there.

If you're suggesting that its recognised that monetary policy has been an abomination and that simply because that's the 'law of the land' people should stick with it (potentially losing their life savings) - to hell with that!

Bob24 wrote: »

Mismanagement is a subjective concept and can be a proxy for short term selfish interest as opposed to long term common interest.

Hmm...you've used this 'selfish' word quite a bit - and that doesn't sit well with decentralised crypto (in its original form - and discounting the speculative sideshow - which clearly involves greed, selfishness, etc.). Bitcoin emerged specifically as a reaction to the greed and selfishness of the movers and shakers in banking and government - players in the conventional 'democratic' (!!!???) system. Can you elaborate a little on where you see the selfishness in the context of crypto vs. FIAT?

stockshares

Dovey Wan on Twitter reporting that the local Guangzhou Government have announced a 150m subsidy for outstanding Blockchain projects.

Her sources are Caijing and Caixin, the main Financial media in China.

They are going to choose 2 Blockchain projects per year.

She expects other local gov in China to do the same.

Interesting to see what develops.

Bob24

stockshares wrote: »

Dovey Wan on Twitter reporting that the local Guangzhou Government have announced a 150m subsidy for outstanding Blockchain projects.

Her sources are Caijing and Caixin, the main Financial media in China.

They are going to choose 2 Blockchain projects per year.

She expects other local gov in China to do the same.

Interesting to see what develops.

Yep, the way politics work in China is that once the central government has given directions (and probably targets to provinces behind closed doors), all the local leaders will follow suit in order to look good on the nationwide dashboards and not to be at the bottom of the rankings. So there will likely be many new Chinese blockchain companies created.

One downside probably is that governments will likely rush to spend money on anything which has the word “blockchain” on it without having the Proper expertise to really understand what it is - and there is a whole industry in China of people who are just creating projects in order to attract government subsidies and keep their business going (the same small company could have been working on green energy PowerPoint slides yesterday and completely refocus on blockchain PowerPoint slides today, depending on what will work best to convince an official to sign a check for them, I know someone who used to work in such company and it is quite appalling as in the end they swallow subsidies and deliver very little - with the local government possibly turning a blind eye because usually the boss of the company is a former official and/or has some contacts). So most likely a lot of the money will go into projects which are not too solid or have very little to do with blockchain besides having the word in their name.

But still it is good news and some good stuff could come out of it. And it got me to remember how to say blockchain in Chinese!

stockshares

Bob24 wrote: »

Yep, the way politics work in China is that once the central government has given directions (and probably targets to provinces behind closed doors), all the local leaders will follow suit in order to look good on the nationwide dashboards and not to be at the bottom of the rankings. So there will likely be many new Chinese blockchain companies created.

One downside probably is that governments will likely rush to spend money on anything which has the word “blockchain” on it without having the Proper expertise to really understand what it is - and there is a whole industry in China of people who are just creating projects in order to attract government subsidies and keep their business going (the same small company could have been working on green energy PowerPoint slides yesterday and completely refocus on blockchain PowerPoint slides today, depending on what will work best to convince an official to sign a check for them, I know someone who used to work in such company and it is quite appalling as in the end they swallow subsidies and deliver very little - with the local government possibly turning a blind eye because usually the boss of the company is a former official and/or has some contacts). So most likely a lot of the money will go into projects which are not too solid or have very little to do with blockchain besides having the word in their name.

But still it is good news and some good stuff could come out of it. And it got me to remember how to say blockchain in Chinese!

Considering they are just going to choose 2 projects I would imagine they will take more care in choosing. I don't think they would want to have to answer to the Party Leaders if they chose duds.

Btw Dovey Wan is worth following on Twitter. She seems to have her finger on the pulse of what's happening in Crypto in China.

Bob24

makeorbrake wrote: »

Hmm...you've used this 'selfish' word quite a bit - and that doesn't sit well with decentralised crypto (in its original form - and discounting the speculative sideshow - which clearly involves greed, selfishness, etc.). Bitcoin emerged specifically as a reaction to the greed and selfishness of the movers and shakers in banking and government - players in the conventional 'democratic' (!!!???) system. Can you elaborate a little on where you see the selfishness in the context of crypto vs. FIAT?

Yep, and to be clear I don’t necessarily mean selfish as criticism - in most of my posts I simply used it to describe situations whereby people are strongly pushed to protect their own interest in the short term rather than looking at the long term common interest, and whereby in the end a succession of people understandably protecting themselves by making a selfish move can end up hurting everyone a majority of those people.

Going back specifically to crypto, I think Max Keiser has an interesting phase to define Bitcoin: he calls it “hard money disguised as a get rich quick scheme”. In just a few words he explains that most people are not attracted to bitcoin because of ideals or an understanding of the underlying cypherpunk movement and Austrian economics theory - but rather by selfish personal interest thinking they will but at a certain price and sell at a much higher price. Now it is not a problem to want go make profit and some people will latter develop a better understanding - and his statement is not meant as criticism, but I think his wording explains quite well how greed and self interest is (smartly) built into the original concept of bitcoin as a way to get it to spread and grow.

And specifically on your question about how it could play out against the majority in a crypto vs national currency context (not necessarily FIAT, government used national currency in general), there could be a similar scenario to the one I mentioned with social welfare whereby one after the other different groups of people are pushed to move out because the previous group has moved out (as a voluntarily simplistic example: in the same way a very determined sizeable minority of depositors could trigger a bank run even on a healthy by asking convert their digital money to cash if the central bank wasn't there to provide liquidity and prevent them from doing so, a determined sizeable minority of citizens could trigger what could be called a currency run asking to convert their currency to a crypto - and this would be much harder to control as it would be at a currency level rather than at a bank level).

makeorbrake

Bob24 wrote: »

Going back specifically to crypto, I think Max Keiser has an interesting phase to define Bitcoin: he calls it “hard money disguised as a get rich quick scheme”. In just a few words he explains that most people are not attracted to bitcoin because of ideals or an understanding of the underlying cypherpunk movement and Austrian economics theory - but rather by selfish personal interest thinking they will but at a certain price and sell at a much higher price. Now it is not a problem to want go make profit and some people will latter develop a better understanding - and his statement is not meant as criticism, but I think his wording explains quite well how greed and self interest is (smartly) built into the original concept of bitcoin as a way to get it to spread and grow.

There's no doubt but that at a later stage, people who believed in the concept and ideology were joined by those who have no other interest other than a speculative one. That's really a sideshow though. Due to the designed in scarcity, its going to happen initially. There will come a time when Bitcoin is considerably less interesting from that perspective. I see this as a once in a lifetime event. Ultimately, it will settle down (admittedly we are still very, very early in that respect).
I don't think that backs up your point though. It's a sideshow. Without basic fundamental / core advantages and upside to Bitcoin, there would be no speculative sideshow in any event. Furthermore, to shift the pin against a FIAT currency, two things would have to happen;
1. Bitcoin is going to have to filter through much more in terms of real tangible use case.
2. FIAT will have failed the citizens its purported to serve.

In that process, there is no selfishness implicated in the Bitcoin proposition in this context. If anything, the selfishness is on the part of those - having failed citizens probably due to lining their own pockets or pursuing their own interests - who would see to it that people have their savings wiped out rather than switch away from that failed or failing FIAT to an alternative.

Bob24 wrote: »

And specifically on your question about how it could play out against the majority in a crypto vs national currency context (not necessarily FIAT, government used national currency in general), there could be a similar scenario to the one I mentioned with social welfare whereby one after the other different groups of people are pushed to move out because the previous group has moved out (as a voluntarily simplistic example: in the same way a very determined sizeable minority of depositors could trigger a bank run even on a healthy by asking convert their digital money to cash if the central bank wasn't there to provide liquidity and prevent them from doing so, a determined sizeable minority of citizens could trigger what could be called a currency run asking to convert their currency to a crypto - and this would be much harder to control as it would be at a currency level rather than at a bank level).

Well, there is no need for any bank 'run' if we don't have a banking system that employs fractional reserve banking. As regards moving the dial - again, it's highly unlikely that people will move en-masse (to the extent that Bitcoin takes the complete role of a FIAT) without that FIAT currency well and truly crapping its pants.
That some - under those circumstances - would move earlier than others - all day long. However, other than that, I can't see past a scenario in which both co-exist well into the future. You'll see government money perform a lot better - into the bargain. There's nothing like a bit of competition.

Just think of the consequences of that alone (government money has to raise its game). Imagine if all of these developing countries didn't suffer from having their wealth vapourised every few years? The societal impact is huge.

Dohnjoe

makeorbrake wrote: »

Well, there is no need for any bank 'run' if we don't have a banking system that employs fractional reserve banking.

Is there a crypto alternative to FRB? Is there any alternative that isn't some some bastardization of full reserve banking? (which is widely viewed as too flawed to ever compete with fractional reserve banking)

I've noticed a lot of crypto bloggers and pundits tend to use an appeal to the future to skirt this type of question, whereby something will be "sorted out" by technology at some point in the future, without explaining how. It doesn't matter how technologically advanced a product or system is, it's still governed by elementary economic rules that we've been familiar with for centuries

makeorbrake

Dohnjoe wrote: »

Is there a crypto alternative to FRB?

There most definitely is Dohnjoe. Just don't freakin do it! Remember, I referred to fractional reserve banking (given that fractional reserve is a fully fledged feature of conventional banking) - I didn't refer to crypto in the context of fractional reserve. It's just that you jumped on it - on an assumption.

Dohnjoe wrote: »

Is there any alternative that isn't some some bastardization of full reserve banking? (which is widely viewed as too flawed to ever compete with fractional reserve banking)

It's a current live topic - that there are derivatives that could potentially lead to fractional reserve crypto. Vanilla crypto doesn't facilitate that - quite the opposite....but derivatives and other products could make it possible. If people hold coins on centralised exchanges, that could enable it. That's why there is also a discussion around Proof of Reserves (as there will always be people who store crypto centrally).

Dohnjoe wrote: »

I've noticed a lot of crypto bloggers and pundits tend to use an appeal to the future to skirt this type of question, whereby something will be "sorted out" by technology at some point in the future, without explaining how.

I didn't make ANY big fat claim. I just referred to fractional reserve banking from the point of view of the problems that it can cause when your precious conventional banking systems goes tits up.

Dohnjoe wrote: »

It doesn't matter how technologically advanced a product or system is, it's still governed by elementary economic rules that we've been familiar with for centuries

You think that evolution and strides to improve should just be abandoned? I'm quite happy to accept that conventional systems have served society to a point. I'm not prepared to accept that we all shouldn't be fully engaged in trying to improve them or consider that we may just possibly have something that can improve on them.

Dohnjoe

makeorbrake wrote: »

There most definitely is Dohnjoe.

Okay, what is it?

Bob24

makeorbrake wrote: »

Well, there is no need for any bank 'run' if we don't have a banking system that employs fractional reserve banking. As regards moving the dial - again, it's highly unlikely that people will move en-masse (to the extent that Bitcoin takes the complete role of a FIAT) without that FIAT currency well and truly crapping its pants.

This is why I separated the concept of bank run and currency run. In what I describe as currency run, there is no fractional reserve involved - people are leaving the currency in general (including cash), not a specific bank, so the matter is completely unrelated to fraction reserves.

And actually as a side note, regardless of liking it or not, the idea of fractional reserves is nothing specific to FIAT currencies and am pretty sure the concept will become big in the crypto ecosystem eventually: IMO you will have widely popular entities (called cryptobanks or something else) offering to take custody of cryptocurrency deposits and operating with fractional reserves, which will use the deposits to make money in various ways and offer interest to depositors while keeping some of the profits (and a large number of people will be very happy to deposit funds with them to get interests, without being concerned about or even understanding what a fractional reserve is. Whether it is good or bad I don’t know but I am convinced it will happen and attract a majority of individual crypto holders as everyone likes maximising their returns and many will be ok with or won’t understand the added risk - you will even most likely have people touting it as another proof that crypto is superior to physical assets like gold as it can offer a return instead of costing money to store).

And as I said I am not talking about a majority leaving en masse as a single move - I am talking about a gradual move whereby a sizeable minority would have the possibility to trigger successive waves of transitions, which at the end of the process would lead to a complete change.

makeorbrake

Dohnjoe wrote: »

Okay, what is it?

Answer was provided above, Dohnjoe.

Bob24 wrote: »

This is why I separated the concept of bank run and currency run. In what I describe as currency run, there is no fractional reserve involved - people are leaving the currency in general (including cash), not a specific bank, so the matter is completely unrelated to fraction reserves.

For sure, there's no misunderstanding. They're completely separate things.

Bob24 wrote: »

And actually as a side note, regardless of liking it or not, the idea of fractional reserves is nothing specific to FIAT currencies and am pretty sure the concept will become big in the crypto ecosystem eventually:

It has come from that world and can only happen in centralised systems or aspects of a system that are centralised.

Bob24 wrote: »

IMO you will have widely popular entities (called cryptobanks or something else) offering to take custody of cryptocurrency deposits and operating with fractional reserves, which will use the deposits to make money in various ways and offer interest to depositors while keeping some of the profits (and a large number of people will be very happy to deposit funds with them to get interests, without being concerned about or even understanding what a fractional reserve is. Whether it is good or bad I don’t know but I am convinced it will happen and attract a majority of individual crypto holders as everyone likes maximising their returns and many will be ok with or won’t understand the added risk - you will even most likely have people touting it as another proof that crypto is superior to physical assets like gold as it can offer a return instead of costing money to store).

It's already happening with the emergence of DeFi. There are a whole host of entities which have emerged over the past 18 months who are offering crypto loans and $ on crypto deposits.

Rehypothecation - the practice banks use to make use of client funds which may have been provided as collateral - is something that comes from the Wall Street world and could be used to manipulate crypto. For example, Bakkt could use this. They've been asked and said that they won't - but then there are a number of points at which it can be pursued - not just at Futures contract level.

It has very much become a live topic - as its a threat to Bitcoin/crypto. One of the core fundamentals of Bitcoin is designed in scarcity. If entities leverage Bitcoin, then we won't have just 21 million Bitcoin. In January a BIP proposal was floated to code in a Proof of Reserve aspect to Bitcoin. Something like this will be needed as its not realistic to think that everyone will buy in to self sovereignty when it comes to coin storage.

Bob24 wrote: »

And as I said I am not talking about a majority leaving en masse as a single move - I am talking about a gradual move whereby a sizeable minority would have the possibility to trigger successive waves of transitions, which at the end of the process would lead to a complete change.

Ok, but again, I only see this happening where the motivation provided is that FIAT has failed citizens.

Dohnjoe

makeorbrake wrote: »

Answer was provided above, Dohnjoe.

Anything I've found on derivatives and crypto based is super vague and speculative. And at the end of the day it's basically the same concept, lending out more than you have.

makeorbrake

Dohnjoe wrote: »

Anything I've found on derivatives and crypto based is super vague and speculative. And at the end of the day it's basically the same concept, lending out more than you have.

As above. It's not something that was proposed with Bitcoin/crypto. However, regrettably we can't depend on everyone storing their own coins. As above ^^ - solutions are being considered.

JohnnyFlash

https://www.wsj.com/articles/large-bitcoin-player-manipulated-price-sharply-higher-study-says-11572863400?mod=hp_lead_pos4

A paper about to be published in the Journal of Finance suggesting that the bubble in late 2017 was largely caused by Tether and a mysterious trader on Bitfinex. Tether created out of thin air to buy bitcoin, canny crypto investors rush in with real money because of FOMO, bitcoin and alt coins bought with tether are sold to them for real money, real money is cashed out.

Nothing that people like myself and Pintman weren’t suggesting at the time. Most of the twitter accounts closely associated with Bitfinex are not happy with this report.

Dohnjoe

JohnnyFlash wrote: »

https://www.wsj.com/articles/large-bitcoin-player-manipulated-price-sharply-higher-study-says-11572863400?mod=hp_lead_pos4

A paper about to be published in the Journal of Finance suggesting that the bubble in late 2017 was largely caused by Tether and a mysterious trader on Bitfinex. Tether created out of thin air to buy bitcoin, canny crypto investors rush in with real money because of FOMO, bitcoin and alt coins bought with tether are sold to them for real money, real money is cashed out.

Nothing that people like myself and Pintman weren’t suggesting at the time. Most of the twitter accounts closely associated with Bitfinex are not happy with this report.

It was largely caused by irrational exuberance.

Bob24

makeorbrake wrote: »

Ok, but again, I only see this happening where the motivation provided is that FIAT has failed citizens.

As I have explained, failing to serve the selfish interest of a sizeable and well organised minority could be enough to trigger the successive waves.

If this is what you are calling fiat failing citizens, yes we agree.

And again, I am in no way saying fiat is perfect or well managed - just that there is a real possibility of a minority being able to trigger a chain of event s which would eventually lead to its downfall (without a conscious choice from the majority saying “fiat has failed us, we want to replace it by decentralised digital very hard money”, nor necessarily a clear understanding or the long term implications).

makeorbrake

Bob24 wrote: »

As I have explained, failing to serve the selfish interest of a sizeable and well organised minority could be enough to trigger the successive waves.

Speculation is a side show. Are you suggesting that everyone is going to move over to crypto just to speculate? The extent of the 'selfishness' is contained within speculation. Unless you think its selfish to protect your life savings (in the event of a bank stealing it (where the bank fails and there is no state or industry protection) or a government stealing it (Cyprus) ...or a government mismanaging an economy and FIAT currency such that your wealth is about to vapourise.

Lets be clear. Those engaged in investment/speculation - are more likely to be 'selfish' - but there is nothing wrong either in principal with trying to turn a profit. Those people take savage risk - so they're entitled to such gains. That activity can get frothy and over exhuberent, yes. But for many its a regular activity that implicates self interest rather than selfishness.

The other examples above - couldn't be classified as 'selfishness' but they could be classified as self interest. I have no issue with that - and can't see how anyone could.

Bob24 wrote: »

If this is what you are calling fiat failing citizens, yes we agree.

It's definitely not. What I call FIAT failing is a government and its central bank mismanaging the economy and the FIAT currency that goes with it.

Bob24 wrote: »

And again, I am in no way saying fiat is perfect or well managed

Yeah, I wouldn't suggest for a second that you should because time and time again, we have seen that it's NOT perfect and oftentimes, it is NOT well managed - time after time, year after year.

Bob24 wrote: »

just that there is a real possibility of a minority being able to trigger a chain of event s which would eventually lead to its downfall

You have got this backwards. We have an existing system. People will need an extremely good reason to abandon that completely for crypto. That reason lies with FIAT - and not crypto.

Bob24

Se my previous posts and the welfare state exemple I gave - pretty clear what kind of potentially undesired chain reaction I have in mind and that in that context by selfish interest I don’t mean speculation.

makeorbrake

Bob24 wrote: »

Se my previous posts and the welfare state exemple I gave - pretty clear what kind of potentially undesired chain reaction I have in mind and that in that context by selfish interest I don’t mean speculation.

Ok, but your welfare state analogy doesn't fit in this instance.

Dohnjoe

makeorbrake wrote: »

Speculation is a side show.

In crypto that is overwhelmingly the main show right now

q85dw7osi4lebg

Dohnjoe wrote: »

In crypto that is overwhelmingly the main show right now

Says who? Just Dohnjoe it appears.