On Bitcoin...
Posted by CaptainKirk 3 weeks ago to Economics
I said BTC would hit $100K long before it hit ZERO.
The link I am referencing to is worth watching. Michael Saylor says it best.
When you spend little to no time looking into BTC, you know it's a ponzi scheme.
Then after a good 10-20 hrs of actually studying what BTC is. you start to realize...
BTC is the digitization of MONEY. Just like Digital Cameras destroyed Kodak.
Digital Money will destroy paper currency.
He goes on to say, nobody who spends 100hrs actually researching/studying BTC,
Walks away a critic of BTC.
I know the Gulch is stock full of older patrons who shall not believe.
And I am okay with that. If I can get a few of you to LIKEN this "concept" to
the concepts of Harnessing Fire, or Electricity, or the Internal Combustion Engine.
You might wake up that part of you that realize that this "creates future opportunities",
that can be done without MIDDLEMEN (bankers, or government). [Okay, the reality
is that the middlemen are the many miners who make the network work... But they are 100% decentralized. And they are not going to take lightly to being asked to steal from someone like them, to help a central government somewhere].
Anyways. Flame me all you want. There were CROWDS admonishing Tesla/Edison for electricity. For 20yrs, everyone thought automobiles were STUPID and unreliable.
But getting someone from the Gulch to dig in, and ask... What will this change?
Because, as Mr. Saylor says... Nobody who spends the 100hrs researching this is still a skeptic.
Personally, MSTR (his stock) is booming because of him converting his cash holdings into BTC.
Also, the "bankers" told him "cash is trash" and that "you need to carry lots of debt to get better valuations". I mention this, because MANY of you naysayers are fully invested in the stock/bond market, a system that is PROVABLY a ponzi scheme with Counter-Party Risks, and subject to the Great Taking... (your deposits in your bank... COME LAST to the borrowing the bank has done at the Fed Window or with other banking institutions. Yes, the FDIC protects you).
Now, I am not saying it will be SMOOTH sailing for BTC. it will continue to chop around.
But if we are at $100K / BTC now. And the USA starts to accumulate, And 50 other companies are starting to do what MSTR did, so that they can hold BTC instead of depreciating cash.
You owe it to yourself to consider having some as a hedge against the coming inflation.
If you want to play around. Consider using IBIT. I have this in an IRA. For months, I traded it (long bias only), on the swings up and down. When it broke out, I bought a bunch and I will hold until I think we switch to sideways action. Probably 100-200 days from now. These are LONG SLOW Cycles. Don't try to get rich quick.
But IBIT makes it easy to play with. With very low fees if you do trade it.
(FWIW, I won't trade my BTC, never have). I just use IBIT to capture the volatility.
Because I am CONFIDENT that 3,5,9, 15 years from now. It will be higher than it is today!
From a market guessing standpoint. I could be 100% wrong. But I assume they will push this to about 125K and then we will get a big correction. At least down to 100K. And then the market will go sideways for 180+ days, maybe longer.
Does it require Electricity and Internet? Yeah... That's why it's not for the Mad Max Future.
That's what gives it a downside risk to $0.
But quite frankly, in the Mad Max future... I am not sure how much your gold will buy you when you run out of ammo to protect it.
The link I am referencing to is worth watching. Michael Saylor says it best.
When you spend little to no time looking into BTC, you know it's a ponzi scheme.
Then after a good 10-20 hrs of actually studying what BTC is. you start to realize...
BTC is the digitization of MONEY. Just like Digital Cameras destroyed Kodak.
Digital Money will destroy paper currency.
He goes on to say, nobody who spends 100hrs actually researching/studying BTC,
Walks away a critic of BTC.
I know the Gulch is stock full of older patrons who shall not believe.
And I am okay with that. If I can get a few of you to LIKEN this "concept" to
the concepts of Harnessing Fire, or Electricity, or the Internal Combustion Engine.
You might wake up that part of you that realize that this "creates future opportunities",
that can be done without MIDDLEMEN (bankers, or government). [Okay, the reality
is that the middlemen are the many miners who make the network work... But they are 100% decentralized. And they are not going to take lightly to being asked to steal from someone like them, to help a central government somewhere].
Anyways. Flame me all you want. There were CROWDS admonishing Tesla/Edison for electricity. For 20yrs, everyone thought automobiles were STUPID and unreliable.
But getting someone from the Gulch to dig in, and ask... What will this change?
Because, as Mr. Saylor says... Nobody who spends the 100hrs researching this is still a skeptic.
Personally, MSTR (his stock) is booming because of him converting his cash holdings into BTC.
Also, the "bankers" told him "cash is trash" and that "you need to carry lots of debt to get better valuations". I mention this, because MANY of you naysayers are fully invested in the stock/bond market, a system that is PROVABLY a ponzi scheme with Counter-Party Risks, and subject to the Great Taking... (your deposits in your bank... COME LAST to the borrowing the bank has done at the Fed Window or with other banking institutions. Yes, the FDIC protects you).
Now, I am not saying it will be SMOOTH sailing for BTC. it will continue to chop around.
But if we are at $100K / BTC now. And the USA starts to accumulate, And 50 other companies are starting to do what MSTR did, so that they can hold BTC instead of depreciating cash.
You owe it to yourself to consider having some as a hedge against the coming inflation.
If you want to play around. Consider using IBIT. I have this in an IRA. For months, I traded it (long bias only), on the swings up and down. When it broke out, I bought a bunch and I will hold until I think we switch to sideways action. Probably 100-200 days from now. These are LONG SLOW Cycles. Don't try to get rich quick.
But IBIT makes it easy to play with. With very low fees if you do trade it.
(FWIW, I won't trade my BTC, never have). I just use IBIT to capture the volatility.
Because I am CONFIDENT that 3,5,9, 15 years from now. It will be higher than it is today!
From a market guessing standpoint. I could be 100% wrong. But I assume they will push this to about 125K and then we will get a big correction. At least down to 100K. And then the market will go sideways for 180+ days, maybe longer.
Does it require Electricity and Internet? Yeah... That's why it's not for the Mad Max Future.
That's what gives it a downside risk to $0.
But quite frankly, in the Mad Max future... I am not sure how much your gold will buy you when you run out of ammo to protect it.
The other problem with bitcoin is that the supply is limited. You don't want the supply limited. You want the money supply to exactly match the general level of supply of goods and services in the economy, otherwise there will be undesireable changes in the price level. This creates economic inefficiency, and that is bad.
You don't want a buch of dipshits suddenly becoming rich at the expense of productive people, but this is exactly what bitcoin does.
If I was to design a 'coin', I would only allow minting of tokens when some value (wealth) comes into existence and I would require tokens to be destroyed upon destruction of that value.
First, BTC only comes into existence with "Work" is done. The concept of mining requires CPUs + Electricity. It builds a FLOOR into the price. As the price goes up, the cost of mining goes up.
Again, I hear you screaming at electricity. I am challenging you to study it a bit more.
A limited supply is what makes Gold Valuable vs. Copper, vs. Sand.
The value is the trust it has, plus that nobody can create them for free. And people WILLINGLY Choose to work with them. Eventually an ecosystem exists (like now), where Governments and Corporations are willing to use it as a STORE OF VALUE. And they will accumulate it, to hold it. INSTEAD of holding dollars.
Knowing what you know now. Would you have invested $5,000 in BTC any time in the last 10yrs? And if you did... Would you still have any or would you have sold them along the way and held zero? (and would owning them cause you to research them differently?)
I've been UP and DOWN in my BTC position. I consider it a hedge, like Gold/Silver.
And I've been UP and DOWN in my Gold and Silver positions. And I've taken my share of losses in the stock markets. There are risks everywhere. Most people simply don't know them.
If you had actual wealth that exists in reality tied to it, maybe then you would have a guarantee that the price will not go below the cost of the good.
I know you bitcoin proponents like to equate bitcoin to gold and say that gold might also go to zero, but it wouldn't. Gold would likely never go to zero, unless some very unlikely thing happens, such as somebody inventing a method for making gold out of led at near zero cost. Even then, they wouldn't make that invention public and wouldn't flood the market with gold. Bitcoin, on the other hand, has a pretty high chance of losing value quickly and being replaced by some other coin that becomes popular.
Again, I am very certain that you will have a tough time "finding that replacement". Because, in all honesty, who is going to create it? Someone cloning BTC? What's the "draw?". Who would sell 1 BTC to buy BTC-Black, Red or Blue? Nobody.
I think you understand BTC, but not the future, and simply not the "brand". the US Dollar has value because many people will take it.
Once BTC is more widely used (at about 10x pricing from today), it will shed the volatility. All young markets are volatile.
But we disagree on ONE key point. That someone just "creates another" similar crypto that dethrones BTC. Good luck.
Now, Haderra or other crypto that have different offerings? Oh, yeah. They will come along and grow.
For example. if Brics did a Crypto. MAYBE it could really take off and threaten BTC. Because they could push so much money into it, and it would have value representing their OIL sales/purchases/trade. But I think that stands NEXT to BTC. I would certainly buy some BRICS Crypto if I had the chance.
We are so early in Crypto. Imagine there are less than 22 Million coins. And 7 billion People. There are not enough BTC for each COMPANY in the world to own 1.
Who knows, anything can happen. I don't see anything special about bitcoin that would keep it popular forever.
If nuclear war was to happen and the internet was to segment, the blockchain would split into multiple branches. At that toint you might have BTC-North America, BTC- Eurasia, BTC-Africa, BTC-South America.
You can if it is jewelry or a watch. Or a paper certificate. Or something like Tether Gold (XAUT).
For example, there is a limited supply of turds that I can produce. That doesn't mean they are valuable.
What makes gold valuable is limited supply PLUS its usefulness to somebody.
For example, air is valuable to everybody. However, there is a lot of it everywhere so it is free.
Gold is useful in certain situations, plus it is limited. It's usefulness as money though is due to its ability to not rust. It doesn't depreciate, which is needed for store of value. Copper is not so good for this, it eventually rusts away.
Bitcoin is not limited though, it has direct competition from other cryptocurrencies and traditional currencies.
I do think bitcoin (and other cryptocurrencies) have some value. I just don't think its value comes from what you think it comes from. It is useful to send money and not have to deal with banks.
More importantly, I think bitcoin is a rather crappy system. I would improve on the idea before betting on anything like this.
Well, if you believe BTC is like an IBM PC, and you can just buy a CLONE. You would be right.
But BTC has Mindshare, and Market share.
It is a BRAND (like Michael Jordan).
LTC is effectively a clone of BTC. As you describe it. But it is NOT considered the same by the SEC.
As Trump brings in people who will DEFINE this class of investment more as Real Estate.
And yes, having some intrinsic value. Like the "network" that allows you to go throughout the world and trade it? Exchange it for local cash or local goods?
I can appreciate that you are thinking about it.
Notice that El Salvador started buying into BTC because the IMF/World Bank had them in a stranglehold of lifetime debt (what bankers do).
Pretty soon, they are going to be able to pay off all of their debts... That's pretty amazing.
As for improving on the idea. Yes, the Model A sucked.
It takes a while to change the world forever.
Could you imagine a modern Lambo back when the Model-T came out? It would look like a spaceship.
Yes, BTC is early. Yes, it's first. Yes, it's risky.
But this will be LIFE CHANGING, IMHO...
Imagine when NOBODY uses a currency/money that is controlled by some bankers or some government??? When every government payment is TRACEABLE.
This is not good. Bitcoin is basically a bit of a ponzi scheme unless you can somehow manage to keep it going forever.
When quantum computers become powerful enough, it is possible everyone will rush to dump btc because it would be possible to steal it out of wallets. I guess maybe by that time the btc devs will switch to quantum-resistant algos, but i'm not sure if that will solve the issue completely.
Anyway, the day of reckoning will eventually arrive.
As a hacker who has hacked on the blockchain for a while... I can tell you why. Because your wallet address is only PART of the hash of your public key. it's impossible to determine which public key created that specific wallet address.
But the moment you transact. You expose your public key. And that is the piece that the Quantum computers will attack. (Although I am doubtful they will ever really work).
Right now BTC uses 256 bit keys. They could always increase this, and have 2 sets of addresses, which would enable the old "hidden/secure" wallets to hold on, until they transfer out. This will be solved. There is too much money to protect.
So, if that doesn't drive people to relocate their assets out of BTC. For me, it would be transaction fees. But aside from that. As it makes it into more peoples hands. As banks start to let people borrow against it as collateral. I think there will be a pretty solid stream of new people using it.
But I could be wrong.
We may wake up one day and find that it went the way of MySpace. And the government will be just as involved in trying to make it happen.
In order for this relocation to happen, you need to find someone to buy it from you. So, somebody is going to be left holding the bag. It will not be like with gold. If you hold gold and its monetary use disappears, at least there is an alternative market to sell it in. Maybe not right way, but eventually. This wouldn't be the case with BTC.
I want my SAVINGS to be deflationary. I should not work for 30yrs, saving 1/3rd of my salary, only to find that instead of having 20yrs of "living expenses", I have 3-5.
Eventually, when enough people have some of it, the price will stabilize. The creation of ETFs like IBIT mean that many people can hold a proxy.
But this entire ecosystem would have to be driven to zero. Part of the concept here is that the "network" has the value.
The very people who 5 years ago said it was "garbage", are now investing in it. What changed for Blackrock, Jamie Dimon, etc?
There are thousands of alternative tokens out there. Most are pure junk. Some will link/attach to services and find their niche.
But I believe BTC holds the "Large Scale Network with Scarcity and Trust Niche"...
BTW, I think it's impossible to create something that has neither inflation nor deflation. Whenever the banks do this, they use debt, and borrow against debt. As though that isn't inflationary.
My idea was to allow minting of new token ONLY when it is backed by something of value in the real world. The rule would be that it cannot be rehypothicated and must be owned outright by the person minting the token. Its value would need to be insured by a trusted party (insurance provider). In the event that the value falls below the value of the token, the insurance company (first) and the owner of the property (second) would be on the hook to (automatically) replace the devalued token with some other token that has the right amount of value.
The whole idea is rather long and difficult to explain in a short post, however, the reason why it will work is because the value of tokens would be held constant by the fact that there cannot be more tokens than wealth that can be bought and sold for those tokens. Additionally, value insurance providers will (with their contractually obligated actions) hold the token values where they should be, in case there are some fluctuations in the value of wealth backing the tokens. It would work similar to a stablecoin, except for the fact that actual wealth backs it and not USD and that everyone could mint it, provided that they own qualified property and have bought insurance for it. Additionally, minting would just mean that you are using your property as collateral for 'credit'. Once you 'pay back', your tokens will go out of existence.
You wouldn't want it if you needed to borrow some money. You would be destroyed.
You don't want to have these surprises. The best currency is one which has neither deflation or inflation. It is fair to everyone.
That is not really deflation. That is just prices going down for a certain good due to increase in its supply. Prices for other goods will either go up to compensate, or money/people will be freed up to create more goods in the system, making everybody more wealthy. We want this kind of thing to happen.
Deflation is when there is generally less money to go around than there was before. This causes ALL prices to go down more or less at the same time. It also causes economic issues/inefficiencies, which is bad. People get laid off for no good reason, etc. Deflation is a false economic signal.
Yes, there is economic driven deflation.
That's usually "bad", but I think we have been mis-educated on that, by bankers who profit from inflation.
But the point is. Over time, processes improve and costs come down.
Look at the price of a bushel of corn for the last 30 years. BEFORE you do. Ask yourself how much HIGHER or LOWER you expect it was in the past?
Innovation will drive the cost of production lower. It's a COMPLAINT of many about Capitalism destroying things. It destroys inefficiencies.
It rewards innovation.
FWIW, sounds money means the interest rate is your signal. Risky things cost more to borrow than non-risky things. All of this is lost in todays world.
It is good that they are paying off debts but it is bad that they didn't earn the funds that they are paying with. There will be bag holders in this situation.
Government payments should not exist because government should not exist.
If I knew about every price move of bitcoin going into the future I would buy as much as I could at every low point and sell everything at every high point as fast as I could with every single move that was greater than spread plus some additional amount. That would make me infinitely rich. Also, I would do the same thing for any other tradable thing I knew price moves for.
No, I would not hodl it. That would be stupid. Hodling only makes sense for stuff that generates a dividend and doesn't have too much risk. Bitcoin has too much risk and doesn't generate a dividend. I guess if something doesn't generate a dividend but has zero risk might be good to hodl but only in some limited amount. Liquidity is important too.
I did have some btc from way back left over from a transaction in a wallet and it increased by some 300 times in price. At some point I donated it. I have zero regrets about not leaving more in there or not keeping it some more. This clown world shit needs to stop. The only way one should be making money is by producing something of value to somebody else. Anything else means that somebody produced something of value but didn't get paid. That is very anti-gulch.
Anyway, my point was that the cost of energy and hardware didn't affect the price of bitcoin. That cost is only important to the miners. The sellers and buyers don't care what it costs to mine.
I had to do the math. Basically, once you have a MINER you are Dollar Cost Averaging your purchases of BTC by spending Electricity. It takes about 2yrs to recoup the cost of your miner. And you can get another 2yrs out of it with declining returns (hashrate losses).
In the end, I just bought some more BTC.
But I was more than willing to be a miner based on getting low electricity prices. That's some of the stuff that blew up. Turns out, the companies building out server farms were over selling their electricity assuming people do NOT max out. But EVERY Miner runs pretty much maxed out.
FWIW, I believe it's Iceland where there is a building that uses BTC Miners to warm the building. Interesting ideas.
Still, the downward pressure on btc price, if there is one that is significant, does not relate in any way to the cost of energy and hardware. There is a constant amount of new BTC that is added in a given day because there is constant amount of coins that are minted per block and a constant number of blocks that are added per day, and adding or removing mining rigs doesn't change it. So, the btc network might spend a quintillion gigawatts mining bitcoin (and spend all the world resources) but you still end up with the same mount of newly minted coins per unit of time. This is because of automatic difficulty adjustment.
So, again, the effort and energy you put in does not matter to the price of bitcoin. There is no connection between the price of bitcoin and the price of energy and hardware. As price of bitcoin goes up, mining becomes more profitable and more miners join the network, however, that makes the difficulty go up and profitability falls back down because it takes more energy to earn the same amount of bitcoin. So, it used to take x effort to make y bitcoin but now it might take 2*x effort to make y bitcoin. This means that y bitcoin does not equal x effort.
So, there is no "floor". It keeps moving with the price of bitcoin.
Do correct me if I am wrong.
The price of BTC certainly impacts the number of people who will MINE BTC. As the price rises, it attracts more miners. But if mining cannot break even, then people will do what I did. Just buy BTC. Like any investment, there are a range of people who do it, all with different RETURNS in mind.
But you are 100% correct. The difficulty changes, it's an adaptive system. It strives to find an equilibrium. I think it is genius. If it failed to do this, it would be too easy to game the system.
The floor, again, shows up virtually. If miners are stubborn because BTC is at some crazy low. They will pull the BTC and sit on it for a few months. I don't know many miners who are living in such a way, that they NEED the BTC payment to cover the electricity each month. Maybe it was just me... But I considered Mining as a way of DCA (Dollar Cost Averaging) into BTC via Electricity Purchases. I was buying energy, getting BTC.
As someone with SOME market experience. I want to collect this when others are selling (through lows), and sell this when it is rising.
Or, I just want to hold it.
Any miner who constantly saved 10% of the BTC forever is probably really happy. But have been pretty sad at times! LOL.
Also, these adjustments are not instantaneous, but I admit, I don't know how quickly they change the difficulty.
I guess maybe you can claim the minted bitcoin itself can be sold but that's self-referential and doesn't count.
So, I guess what I am saying is that nothing of value is produced by mining btc (other than btc itself which can only be sold for monetary use). Mining gold, on the other hand, creates raw material that is an input for other industries. So, there are alternative uses.
One thing that will be interesting is see how fees are handled when the last few BTC are mined. Because we need that Army of Computers keeping the register.
The thing is, the btc is not tied to any value in the physical world whatsoever. So, these miners are not really producing anything of value. Maybe we can create a cryptocurrency that will replace arbitrary 0s-in-hash search with compute jobs from people that attach payments to solving the search itself? I don't know, just a random idea. Still, that will not give 'alternative' value to the produced tokens but at least the energy would be spent more wisely.
So, the problem still stands, there is no non-monetary (alternative) use for these tokens. Nothing is stopping their make-believe value from crashing. As soon as people decide to use something else, the stuff will go to zero.
My entire DB is nothing but Zeroes and Ones.
It is the people in the network of consumer/users that give information any value (and anything else) value.
This is the point. We have Digitized Photos and replaced Kodak with instagram/facebook.
We digitized Office Memos with Emails.
We now sign Digital Documents instead of overnighting packages around (having been in the Mortgage Business).
Now, we are talking about Digitizing Money and Money Transfer. I pay people throughout the world. It's a NIGHTMARE and frought with fees.
I look forward to sending them payments via Crypto. Unfortunately, it's illegal in many places, and it's impossible to convert out of in other places.
The Old Bankers will not give up control easily.
This is the beginning of the change.
>> You don't want a buch of dipshits suddenly becoming rich at the expense of productive people, but this is exactly what bitcoin does.
You don't want a bunch of dipshits suddenly becoming rich at the expense of productive people, but this is exactly what central-bank-controlled fiat currency does.
Those 'dipshits getting rich' on bitcoin are essentially the early adopters profiting from the rise in bitcoin's value. I'm not sure you want to break the 'early investors in a new technology profit from its increase in popularity' mechanism.
A good currency has the following attributes:
1: It has a stable value (the value doesn't fluctuate, or doesn't fluctuate much), and as such can be used as a store of value.
US dollar: pretty good, better than most world fiat currencies.
Bitcoin: bad.
2: It is easily portable.
US dollar (physical): good for small transactions, poor at border crossings, poor for large transactions (try buying a car with a suitcase full of cash)
US dollar (electronic): good unless you are a 'disfavored person or business'.
Bitcoin: very good.
3: It is easily divisible, and usable for both large and small transactions.
US dollar: very good
Bitcoin: excellent
4: It's widely accepted.
US dollar: very good, unless you are a 'disfavored person or business'.
Bitcoin: Fair to poor.
5: Fakes are easily detected.
US dollar: good
Bitcoin: very good
6: It doesn't suffer from the 'double spend' problem.
US dollar (physical): excellent
US dollar (electronic): Anywhere from excellent to poor, depends on the bank processing the transaction.
Bitcoin (on-chain): excellent
Bitcoin (off-chain, exchanges): Anywhere from excellent to poor, depends on the bitcoin exchange.
7: Transaction overhead is very low (effectively zero except for very large transactions).
US dollar: Good to very good
Bitcoin: Fair to good (mainly risk premium for converting bitcoin to another currency due to its volatility)
8: Any central authority for the currency needs to be trustworthy, and not inflate the currency for their own benefit.
US dollar: has been pretty good so far in the short term but poor in the long term, but can slide to poor in the short term in an instant.
Bitcoin: Excellent so long as there isn't an undisclosed bug in the protocol, and 51% attacks are impossible in practice.
Primarily, it is a trustless ledger for transferring the crypto/underlying and recording transactions using millions of miners worldwide to record everything.
Crypto is a reference to "Strong Cryptography", which is how we SIGN transactions. Imagine a 158 digit PIN is protecting your wallet. The simple magic is that when you sign a transaction. It's complicated, but that signature can be confirmed without "burning/showing" your PIN.
this is what makes it trustless. (A reference to the fact that if you give me a check... I have to TRUST that the bank on the check actually exists). In this case, if you sign a transactions and post it. The coins will be transferred to my wallet.
A Wallet is just an Address that can receive coins. Your PIN protects your Wallet. Every Wallet has a different PIN. Think of the PIN as the Private Key. The opposite half is the Public Key. (Your wallet address is PART of your Hash of your Public Key). Public keys can be shared. Once you LOSE your private key, your money is lost.
That's Crypto as a Concept. What does it really do? It records transactions. They can contain additional information. There are blockchains out there that store "files". There is a block chain for doing DNS, which guarantees that only the owner of the domain can change it (no government shutting it down).
This is the next most powerful concept. NOBODY ultimately controls it. It is controlled by people who want to protect it conceptually, and they require consensus to PATCH/Change it.
That's it. Is it an Investment? Is it really digital gold?
This is up to each person to decide. It's a way of owning something that NOBODY can take from you. There is NO system that can reach in and take your BTC from you.
It is "Perfect Property" according to Michael Saylor.
If you own Property in New York. You could get sued, and forced to sell it. You could miss a tax payment and have it stripped from you. Or, NY may decide you have no right to do anything useful with it.
The test is this. If you were offered $1 billion worth of GOLD, SILVER, or NY LAND or BTC. And you could NOT SELL IT, and were required to leave it to your children, and protect it so they actually got it. Assume 30 yrs will go by.
Which would you prefer? (I would take BTC).
Keep in mind. You will have to pay storage for Gold/Silver.
you will owe property taxes for the property.
That's all BTC is. It's a concept of digital ownership of property (digital property). Eventually every Title will be on a blockchain. (It's also an immutable record of the transactions).
ETHEREUM adds programmability with Smart Contracts. Which could actually be setup to run the ENTIRE Federal Reserve w/o people!
Now, what you do with it is up to society.
How you value it, is up to society.
The trick is the Network. How many people will learn to use it? Try it out? Work with it?
Then, how can we apply it where we need it. My favorite example is the Federal Reserve. We could literally automate everything they do with perfect transparency.
In the stock world. Imagine a block chain tracking every share issued. Perfectly. (The brokers currently are allowed to "over sell" a stock, one guy bought 100% of his companies shares, and found that 20% was still out there trading. LOL)
It's currently worth around $2,200. Not too bad.
That's how you learn.
Money detached from Governments and Bankers.
It's amazing.
One day Gulchers will be like "We KNEW it would come to this!"... LOL
Unfortunately what we're really up against here is a paradigm shift. You need to start thinking in Bitcoin in the denominator instead of USD(Federal Reserve Note) in the denominator. We have lived our whole lives thinking the existing way so it's very very difficult to change the underlying thinking. Thomas S. Kuhn wrote a book in the 60's called "The Structure of Scientific Revolutions". In it he discusses WHY it's so hard to change thinking. TLDR; most people who embody the existing thinking must pass away before the new thinking can truly take hold. Worth a read...
Again, everyone I know hits the Saylor Rule. Within the first 10-20hrs you think it's junk, garbage a Ponzi scheme. Once you get past that, you realize our current system (provably unstable) is a problem.
https://img1.wsimg.com/blobby/go/ec91...
But just reading the Purpose... I like it.
I love the way it works now!
FWIW, that Fed Window is a wonderful source of UNTAXED INCOME for the owners of the Fed who put up ZERO collateral, pay no taxes on their dividends, and do not even have to disclose who owns them... BUT when they get in trouble are always bailed out. (reason alone to nationalize them).
Private Bankers control it. If we actually had a national Digital Currency, controlled properly (Decentralized). (effectively the fed window could literally be done via digital contracts).
Then I see a place for BOTH still.
I got side tracked making the core point. Sorry.
We could have a digital currency, and still want/use BTC for long-term savings. The equivalent of Digital Gold, so to speak.
But imagine a currency that could not just be inflated to the hilt. And one in which the bonds are sold, and the payments from the "fed window interest rates" are paid to the bond holders.
The amount of this currency would have to float, and that keeps it separate from BTC. But, on the other hand. The RATE could ratchet up, dynamically based on the leverage, which would become putative for CB with a 42 leverage ratio (42:1 Borrowing).
1. Digital is one thing.
2. Deregulation or a gold/x standard and eliminating the Fed is a completely different thing.
Bitcoin conflates the two. You are arguing for 2, and I agree, but that is separate from 1.
Mo ammo is what the silver is for.
Even so, better have too much ammo and be very sure of your aim.
(My next available income goes to BTC.)
Try using Dollar Cost Averaging.
And you can buy a SINGLE Satoshi.
Start small. My best recommendation.
Every down day (big Down, etc).
Just buy your allotment.
But watching it move around is 1/2 the fun.
When quantum computers and other unforeseen number crunchers easily break the crypto process used to create the coin, can the “value” be maintained?
🤔
Every prior technology is no obsolete. MOSTLY due to unfathomable speed increases, and pure genius attacks.
After witnessing these attacks the ECSD algorithms were created to prevent this. Even the process of "Signing" A transaction is cool. It literally uses another randomly generated key as a signature.
Currently, I believe Quantum to be a lark. Like most of modern physics, it works "on paper". Every time they get close, someone finds a unique approach to solving the problems using new algorithms and old computers.
That said. There are 2-3 things Modern Crypto could do to easily FIX this. The first is the usage of Quantum resistant algorithms. Other approaches could include an MFA approach where you have to Authorize using a secondary account on another blockchain. Making it nearly impossible, because you have have to crack the MFA in order to then attack the wallet. Another option is for the user to manage 2 linked addresses. And to temporarily set a flag in one linked address indicating a pre-approved transaction that is soon to be coming, with a timeout feature. (Like Positive Pay used by banking to make sure stolen/signed checks cannot be cashed).
What's great is that once you are using an application to sign your stuff, configuring it to doubly sign a transaction is no big deal for the application.
Most of the improvements EITHER require an extra step or two... Or TRUSTING a 3rd Party. Or a Multi-Sig.
We are early. There is a lot of room for innovation. But the odds of "hacking" someones keys are infinitesimally small. Right now, the cost to hack 256 bit ECDSA is EONS of time PLUS 1 Huge Hard Disk for EVERY DOLLAR of US DEBT.
SIDE NOTE: One of the reasons it was created, was that IF WE FORCED our governments to use BTC. We could trace EVERY DOLLAR Spent! Don't forget this. This came about after finding Government "Employees" and elected officials siphoned of TONS of money, and were buying Islands, and land owned by offshore banking companies with law firms specializing in hiding this stuff.
BTC is a competitor to GOLD (storehouse/inflation hedge) and NOT the dollar.
https://app.screencast.com/mthbok0042...