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Re: €100 of Bitcoin in 2010 = €70m today

Posted: Sat Jan 06, 2018 2:04 pm
by pontifex
It seems the Chinese Communist Party agrees that Bitcoin is practically unsustainable: https://www.bloomberg.com/news/articles ... -clampdown

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Sat Jan 06, 2018 4:34 pm
by goeagles
bimboman wrote:
goeagles wrote:
bimboman wrote:
goeagles wrote:
bimboman wrote: Own bit coin , dollar falls 25% , unless Bitcoin rises 25% you are losing against the currency devaluation.
Yeah, I'm pretty sure if the value of the USD falls 25% that Bitcoin-USD trades are not going to stay static. Call me crazy.

I'm sure, the point stands if you own an asset prices in a currency then that currency performance directly correlates to your value.
No. It only correlates to your trade price. That is not the same thing as value, or what you can buy with it.

Sorry you're claiming that Bitcoin has a value greater than its USD cash VALUE ? But you're not a devotee no sir.

Here Ive produced a list of things I can buy with Bitcoin where the seller doesn't compare it's value to an actual currency value first:




















.
Derp. All I'm suggesting here is that if there is sudden deflation, the trading price of Bitcoin in USD will go down, but so will the price of everything, so what you can buy with BTC will be roughly the same.

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Sat Jan 06, 2018 5:54 pm
by bimboman
Derp. All I'm suggesting here is that if there is sudden deflation, the trading price of Bitcoin in USD will go down, but so will the price of everything, so what you can buy with BTC will be roughly the same.

I'm talking about currency deflation ...

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Sat Jan 06, 2018 6:13 pm
by sorCrer
bimboman wrote:
Derp. All I'm suggesting here is that if there is sudden deflation, the trading price of Bitcoin in USD will go down, but so will the price of everything, so what you can buy with BTC will be roughly the same.

I'm talking about currency deflation ...
Bimb's, would you mind me asking how old you are? Not to take teh piss but because I'm trying to understand why you're so against change. You come across as an old set in their way kinda person but I've got a feeling that you're younger than me.

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Sat Jan 06, 2018 6:19 pm
by bimboman
sorCrer wrote:
bimboman wrote:
Derp. All I'm suggesting here is that if there is sudden deflation, the trading price of Bitcoin in USD will go down, but so will the price of everything, so what you can buy with BTC will be roughly the same.

I'm talking about currency deflation ...
Bimb's, would you mind me asking how old you are? Not to take teh piss but because I'm trying to understand why you're so against change. You come across as an old set in their way kinda person but I've got a feeling that you're younger than me.
Im not sure doubting the application of the current crop of crypto currencies makes me against change .... I like change, I don't like rip offs and bubbles.

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Sat Jan 06, 2018 6:20 pm
by sorCrer
Seneca of the Night wrote:
sorCrer wrote:
bimboman wrote:
Derp. All I'm suggesting here is that if there is sudden deflation, the trading price of Bitcoin in USD will go down, but so will the price of everything, so what you can buy with BTC will be roughly the same.

I'm talking about currency deflation ...
Bimb's, would you mind me asking how old you are? Not to take teh piss but because I'm trying to understand why you're so against change. You come across as an old set in their way kinda person but I've got a feeling that you're younger than me.
You are very frustrating.
I'd be happy to smoke a pipe with you and garner some knowledge. Markets have been pretty flat today :(

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Sat Jan 06, 2018 6:22 pm
by sorCrer
bimboman wrote:
sorCrer wrote:
bimboman wrote:
Derp. All I'm suggesting here is that if there is sudden deflation, the trading price of Bitcoin in USD will go down, but so will the price of everything, so what you can buy with BTC will be roughly the same.

I'm talking about currency deflation ...
Bimb's, would you mind me asking how old you are? Not to take teh piss but because I'm trying to understand why you're so against change. You come across as an old set in their way kinda person but I've got a feeling that you're younger than me.
Im not sure doubting the application of the current crop of crypto currencies makes me against change .... I like change, I don't like rip offs and bubbles.
Not even to make money off?

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Sat Jan 06, 2018 6:28 pm
by bimboman
Not really, I was a broker for 20 years and probably by that existance morally dubious to some. However al that time I was in a heavily regulated market, and within that market I behaved with what I think was decency at all times.

The market is sucking in mug punter money now and that isn't right. I do understand your own position I think and that you've learnt to follow a trend well. Enjoy while the sun is shining.

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Sat Jan 06, 2018 7:07 pm
by sorCrer
Seneca of the Night wrote:
I'm sticking around on this thread. This train is heading to somewhere strange for sure.
That I do a agree on. Perdido Street Station.

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Sat Jan 06, 2018 10:36 pm
by goeagles
bimboman wrote:
Derp. All I'm suggesting here is that if there is sudden deflation, the trading price of Bitcoin in USD will go down, but so will the price of everything, so what you can buy with BTC will be roughly the same.

I'm talking about currency deflation ...
Go ahead and lay out exactly what you're talking about then. What action does the US government take? How do the markets react in this scenario?

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Sat Jan 06, 2018 10:55 pm
by bimboman
goeagles wrote:
bimboman wrote:
Derp. All I'm suggesting here is that if there is sudden deflation, the trading price of Bitcoin in USD will go down, but so will the price of everything, so what you can buy with BTC will be roughly the same.

I'm talking about currency deflation ...
Go ahead and lay out exactly what you're talking about then. What action does the US government take? How do the markets react in this scenario?

Extra money supply, too low interest rates, currency falls in relative terms, inflation of prices , things valued in USD fall in relative value.

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Sun Jan 07, 2018 5:32 am
by Harveys
What are peoples thoughts on Kin? looks promising.

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Sun Jan 07, 2018 6:07 am
by Conservative Eddie

Why cryptocurrency is the answer
The impulse behind them is revolutionary: to take the control of money away from government

Lionel Shriver
I haven't noticed any other replies to this article so I'd be curious to read what others think of it. I think this can be taken as an issue - one of history, philosophy and world-views - somewhat removed (though really it's all intertwined on some level) from the other discussions on here and elsewhere about price action, the underlying blockchain tech, is it a bubble/isn't it a bubble etc...

Anyway, as a sort of preface: I've read quite a few books and articles recently - well over the last few years - on economic history (my academic background is in science - biology - so this amounts to a hobby interest at best); Reinert, Graeber, Tooze, Scott etc...all very interesting and worth reading.

Some recurring themes do emerge from this and one of them chimes very closely with what's going on here, which paint these current "revolutionary impulses" as not at all novel; in fact a re-hash of prior attempts at "preserving the store of value" - gold and silver, typically- and is yet another manifestation of the schizophrenic relationship that exists in the classical liberal/libertarian mind between their capital and "rights" and its uneasy yet necessary dependence on state power.

So Locke and Hayek et al have been dug up and reanimated: a political project to create apolitical money!
The craze for cryptocurrency can be explained by a host of factors: the allure of getting rich quick; the attraction of off-the-grid accountancy for malefactors like tax evaders and drug dealers (though Bitcoin is traceable); the glamour of the new. Despite blockchain currencies’ wild volatility thus far, I’d still posit that the more underlying attraction is to a reliable store of value. Bitcoin investors may not recognise their motivation as such, but the impulse behind computer-generated currency is revolutionary: to take the production and control of money away from government.
Firstly, Bitcoin and the rest of these cryptos aren't currencies. They don't function as such. They don't operate as widely used mediums of exchange or units of account. That is what currencies or money have typically been - historically. The idea of money operating as a store of value appears to be far less important and significant historically, and even now, than its day-to-day use - as a medium of exchange and unit of account - and the trust and confidence the great mass of the population have in it as such.

The one relatively small-scale and consistent use of crypto - and Bitcoin in particular - as currency that I can recall was during the operation of Silk Road on the darkweb. In that instance it functioned as a discrete medium of exchange and actual unit of account. This is important as it being the unit of account mirrors how money was/is mainly used - money as credit or debt which dwarfs money in any other form hinges on this concept. Money as more of an abstraction than that of a hard currency.

So crypto as a currency greasing the wheels of a computer generated market for drugs (amongst other things), created by libertarian Ross Ulbricht who, when he wasn't bemoaning the burdensome and coercive state and quoting Von Mises, was collecting a tidy profit as facilitator of this new world "...creating an economic simulation to give people a first-hand experience of what it would be like to live in a world without the systemic use of force".

The State stepped in and now Ross Ulbricht is serving life without parole. Libertarian fantasy over.

But he did get a crypto to actually work as a currency - in a limited sense - and I've yet to see another example as "successful".

Now that we live in a world of 100 per cent fiat currencies — backed by nothing — governments can print their hearts out, and they do. The rounds of quantitative easing since 2008 — money-printing on Red Bull — may not seem to have produced the inflation many a conservative economist predicted. But they have. Asset bubbles like London and New York property markets, fine art, collectibles, equities — hitting historic highs — and Bitcoin itself are all evidences of inflation. There’s too much money in the world right now, sloshing from investment to investment and bloating every bolt hole one can think of to stash with capital (an unholy proportion of which is founded on debt). Because it costs central banks nothing to turn on the pumps.
Well, I guess if you simply re-define the term "inflation" then it can be whatever you want it to be. Central banks obsess over inflation - it's pretty much the raison d'être of the ECB - and the main ones, by and large, have stuck to their task and largely stayed within the targets they set. There's also a peculiarly monetarist-esque obsession here about the money supply and inflation. One could as easily argue that increasing the money supply is necessary if you want economic growth - apart from making that argument, that is in fact what actually happens.

Also this conception of fiat money and it being "backed by nothing" - this is an old and tired argument - yet it is backed by something. The State! That's something - OK, it's a social construct but then so is money!

What makes the likes of Bitcoin extraordinary is that the currency is limited in quantity, thus functioning more like precious metals. Producing a single Bitcoin requires so much computing power that environmentalists have criticised the process as cataclysmically wasteful of energy. Further, every Bitcoin mined requires more computing power than the one before, meaning that the total coinage in circulation rapidly approaches an absolute mathematical limit.
This is classic Locke. The idea of money as being tangible; durable; limited and determined by natural laws - like precious metals. What is described as "extraordinary" about Bitcoin - its limited supply - is its achilles heel. It's why it and any other similarly constrained crypto will never function as a currency - i.e. a medium of exchange and unit of account - at scale. It won't happen. Money is far too abstract and intangible- specifically its form as credit - for this not to end in disaster if actually attempted amongst the mass population.

The Lockean example of this occured in the 1690s when he opposed a recall and reissue of silver coinage at a lower weighting, which would have had the effect of stabilising the price and increasing the supply. He won the day and its value was restruck as before. Disaster ensued, Gresham's Law set in and coinage in circulation collapsed. Deflation, a price collapse, hunger and unrest...
Contrast that with fiat currencies. The smallest little child knows that keeping your capital in cash is a mug’s game. For years central banks have cheerfully informed us that they aim for an inflation rate of 2 per cent. (Mind, at only 3 per cent — which the UK’s CPI currently exceeds — inflation will halve the value of your money in a mere 23 years.) The public has grown inured to the notion that a functional economy mysteriously requires their currency to rot like meat. This is a lie. One British pound in 1797 was worth about exactly the same amount in 1914 — bouncing up and down a bit, but averaging no inflation whatsoever for 117 years. The Industrial Revolution would qualify as economically functional. Enlarge the picture, and the pound took 164 years between 1750 and 1914 to roughly halve in value. Yet in the century since the first world war? The pound has plunged to the penny.
I don't have the figures at hand - his or anyone else's - inflation, interest, economic growth or otherwise. So I can't be sure about these claims. However, the focus is again on the idea of money as some store of value rather than its far more functional and important attributes. I think the long-run - and by that I mean over several centuries - interest rate in England is about 1%, which leads me to think that inflation isn't nearly the bugbear he's making it out to be.

The ‘almighty dollar’ is no different. One dollar today is worth one cent of a century ago. Although classically one primary purpose of a currency is to act as a store of value, modern currencies are no longer intended to do so. The dollar retains its coveted status only because other currencies are corrupting even faster. The only real check on inflation, every other country is also playing the printing-press game, competing over whose money is the more worthless.
No. Currencies both modern and ancient are not "intended" to do so. This isn't a modern phenonmenon. What's the relative purchasing power of your modern v century-old dollar? What's the difference between size of the US economy now versus 100 years ago?

The US dollar retains its coveted status because it's the world's reserve currency; of the world's largest economy and only superpower. Backed up by unprecedented levels of force. Nothing to do with a silly moralising word play - corrupting? - and everything to do with the reality of geo-politics.

The purposeful inflation of fiat currencies, the very measure of which is rigged to underestimate the degradation of a people’s savings (imagine, in Britain, that the statistic excludes the cost of housing), amounts to a steady, deliberate usurpation of a nation’s wealth, and constitutes the ultimate stealth tax. Deficit-dependent governments love inflation, because they can repay loans of more valuable money with crap money.

I had a ferocious argument with a left-leaning journalist not long ago, who jeered that ‘sound money’ was a fetish of the rich, to the detriment of the poor. I differed. Although monetary decay favours debtors over savers, these days the wealthy are as apt to rely on debt as the impoverished, and on a much grander scale. Who takes out multi–million-pound mortgages in Kensington? Not the exiled residents of Grenfell Tower.
What do you know, in the great creditor v debtor debate he's on the side of the creditor. He should have listened to the "left-leaning journalist". One could broaden the argument a little further and consider much of the libertarian/classical liberal world-view as a fetishisation of the idea of the "deserving rich" (whose wealth must be preserved) and the "deserving poor" (whose circumstances are of their own making and thus deserving of no assistance at all).

"Who takes out multi–million-pound mortgages in Kensington?"

Answer: those with the million-pound incomes to service them.
Especially with today’s near-zero interest rates, it is those who have accrued only modest capital who are especially screwed by a currency that evaporates. The rich can afford to play games with their wealth. For the frugal working and middle classes with small savings on which they depend for retirement, not only is it difficult to make gains hand over fist; without putting precious nest eggs at risk of getting smashed — in equities, for example — it is impossible even to keep what they already have.
A rather pointless spiel without considering why there's such low rates of interest to begin with. Has it not been the case that such rates have persisted since the 2008 GFC? And might those "frugal working and middle classes with small savings" be far more concerned with their current incomes and avoidance of a depression - which whether you accept it or not is the main reason for jacking up supply - than their meagre savings?

It's a trade-off.

Government is too self-interested to be trusted to maintain a currency that sustains its value. The blockchain experiment may not be the answer. (Check out Hashgraph — faster, requiring minimal energy, and more capable of scaling up.) But I hope the renegade entrepreneurs keep trying. For on the face of it, any currency that costs nothing to multiply, when its manufacturer actively benefits from running the presses, will inexorably fritter to confetti. Citizens in any income stratum should have a right to expect that a pound in their pocket today will buy a pound’s worth of goods or services tomorrow. But apparently that’s pie-in-the-sky. What was do-able in 1797 we can’t, or won’t, do now.

Hilariously, even the Bank of England is now considering generating its own digital currency — which Mark Carney would prefer to use only for transfers between central banks, but which many of the governor’s colleagues would like to market directly to consumers. I say ‘hilariously’, because a Bank of England Bitcoin would be linked to the value of the pound. Great. Can’t wait.
That first paragraph is a mix of hyperbole and the previously mentioned obsession/fetishisation. But more than that, it betrays a remarkable ignorance of history. Governments or States as issuers of currency either directly, or indirectly through the creation of a private monopoly bank - which is how the Bank of England first started - goes back a lot further than 1797. The idea of a circulating, widely accepted currency is as much a matter of trust and confidence. Do you trust the state? Do we all trust European state power when we use the Euro? Or US state power when we utilise dollars? I think the answer to that is obviously, yes.

We live in states - mostly democracies so we have some say in how they're run - and we pay our taxes in the state issued medium of exchange. We're all supposed to benefit from this "manufacture" and in a large part we do. So the criticisms of the author are either born out of a latent anarchism or betray the sort of schizo-dissonance of what I'm guessing his worldview happens to be. States aren't going away and neither is their ability to regulate their societies - just as Ross Ulbrict found to his considerable cost.

Imagine a secure international cryptocurrency whose steady value was not subjected to deliberate, systematic decay, whose supply was strictly limited, whose coin was universally accepted, and whose production was beyond the control of the state. Even if the investment couldn’t be expected to appreciate in the slightest, I’d put my every last farthing in such a currency in a heartbeat.
Yes imagine this fantasy world. Would its value be steady if its supply was strictly limited? Steady enough for everyday commerce? Would it avoid Gresham's Law? Will it be used to pay our taxes? Will states exist?

I'm going to say No, No, No and another No and Yes.

I see Seneca was banging on about the South Sea Bubble earlier in the thread. What I don't think was mentioned was that around the same time as that venture, there was another one known as the Darien Scheme. This was a case were one of the founders of the Bank of England (a Scot) came up with the idea of a private corporation representing Scottish investors, which would have a trading monopoly between Scotland, bits of Africa and an overland trade link between the Atlantic and Pacific on the Panama isthmus. A Scottish colony in Central America!

Anyway, it ended up bankrupting almost everyone in the Scottish Lowlands and precipitated the 1707 Act of Union. Like the South Sea Company, the Darien Scheme studiously ignored and fobbed off the notion that the Spanish Empire might not take too kindly to the idea; step in, and smash them. Well, that's ultimately what happened.

States react. They can be slow to do so. But when they do, it can be really nasty.

A cautionary tale.

Anyway, semi-drunken ramble, over.

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Sun Jan 07, 2018 8:45 am
by sorCrer
Conservative Eddie wrote:

Why cryptocurrency is the answer
The impulse behind them is revolutionary: to take the control of money away from government

Lionel Shriver
I haven't noticed any other replies to this article so I'd be curious to read what others think of it. I think this can be taken as an issue - one of history, philosophy and world-views - somewhat removed (though really it's all intertwined on some level) from the other discussions on here and elsewhere about price action, the underlying blockchain tech, is it a bubble/isn't it a bubble etc...

Anyway, as a sort of preface: I've read quite a few books and articles recently - well over the last few years - on economic history (my academic background is in science - biology - so this amounts to a hobby interest at best); Reinert, Graeber, Tooze, Scott etc...all very interesting and worth reading.

Some recurring themes do emerge from this and one of them chimes very closely with what's going on here, which paint these current "revolutionary impulses" as not at all novel; in fact a re-hash of prior attempts at "preserving the store of value" - gold and silver, typically- and is yet another manifestation of the schizophrenic relationship that exists in the classical liberal/libertarian mind between their capital and "rights" and its uneasy yet necessary dependence on state power.

So Locke and Hayek et al have been dug up and reanimated: a political project to create apolitical money!
The craze for cryptocurrency can be explained by a host of factors: the allure of getting rich quick; the attraction of off-the-grid accountancy for malefactors like tax evaders and drug dealers (though Bitcoin is traceable); the glamour of the new. Despite blockchain currencies’ wild volatility thus far, I’d still posit that the more underlying attraction is to a reliable store of value. Bitcoin investors may not recognise their motivation as such, but the impulse behind computer-generated currency is revolutionary: to take the production and control of money away from government.
Firstly, Bitcoin and the rest of these cryptos aren't currencies. They don't function as such. They don't operate as widely used mediums of exchange or units of account. That is what currencies or money have typically been - historically. The idea of money operating as a store of value appears to be far less important and significant historically, and even now, than its day-to-day use - as a medium of exchange and unit of account - and the trust and confidence the great mass of the population have in it as such.

The one relatively small-scale and consistent use of crypto - and Bitcoin in particular - as currency that I can recall was during the operation of Silk Road on the darkweb. In that instance it functioned as a discrete medium of exchange and actual unit of account. This is important as it being the unit of account mirrors how money was/is mainly used - money as credit or debt which dwarfs money in any other form hinges on this concept. Money as more of an abstraction than that of a hard currency.

So crypto as a currency greasing the wheels of a computer generated market for drugs (amongst other things), created by libertarian Ross Ulbricht who, when he wasn't bemoaning the burdensome and coercive state and quoting Von Mises, was collecting a tidy profit as facilitator of this new world "...creating an economic simulation to give people a first-hand experience of what it would be like to live in a world without the systemic use of force".

The State stepped in and now Ross Ulbricht is serving life without parole. Libertarian fantasy over.

But he did get a crypto to actually work as a currency - in a limited sense - and I've yet to see another example as "successful".

Now that we live in a world of 100 per cent fiat currencies — backed by nothing — governments can print their hearts out, and they do. The rounds of quantitative easing since 2008 — money-printing on Red Bull — may not seem to have produced the inflation many a conservative economist predicted. But they have. Asset bubbles like London and New York property markets, fine art, collectibles, equities — hitting historic highs — and Bitcoin itself are all evidences of inflation. There’s too much money in the world right now, sloshing from investment to investment and bloating every bolt hole one can think of to stash with capital (an unholy proportion of which is founded on debt). Because it costs central banks nothing to turn on the pumps.
Well, I guess if you simply re-define the term "inflation" then it can be whatever you want it to be. Central banks obsess over inflation - it's pretty much the raison d'être of the ECB - and the main ones, by and large, have stuck to their task and largely stayed within the targets they set. There's also a peculiarly monetarist-esque obsession here about the money supply and inflation. One could as easily argue that increasing the money supply is necessary if you want economic growth - apart from making that argument, that is in fact what actually happens.

Also this conception of fiat money and it being "backed by nothing" - this is an old and tired argument - yet it is backed by something. The State! That's something - OK, it's a social construct but then so is money!

What makes the likes of Bitcoin extraordinary is that the currency is limited in quantity, thus functioning more like precious metals. Producing a single Bitcoin requires so much computing power that environmentalists have criticised the process as cataclysmically wasteful of energy. Further, every Bitcoin mined requires more computing power than the one before, meaning that the total coinage in circulation rapidly approaches an absolute mathematical limit.
This is classic Locke. The idea of money as being tangible; durable; limited and determined by natural laws - like precious metals. What is described as "extraordinary" about Bitcoin - its limited supply - is its achilles heel. It's why it and any other similarly constrained crypto will never function as a currency - i.e. a medium of exchange and unit of account - at scale. It won't happen. Money is far too abstract and intangible- specifically its form as credit - for this not to end in disaster if actually attempted amongst the mass population.

The Lockean example of this occured in the 1690s when he opposed a recall and reissue of silver coinage at a lower weighting, which would have had the effect of stabilising the price and increasing the supply. He won the day and its value was restruck as before. Disaster ensued, Gresham's Law set in and coinage in circulation collapsed. Deflation, a price collapse, hunger and unrest...
Contrast that with fiat currencies. The smallest little child knows that keeping your capital in cash is a mug’s game. For years central banks have cheerfully informed us that they aim for an inflation rate of 2 per cent. (Mind, at only 3 per cent — which the UK’s CPI currently exceeds — inflation will halve the value of your money in a mere 23 years.) The public has grown inured to the notion that a functional economy mysteriously requires their currency to rot like meat. This is a lie. One British pound in 1797 was worth about exactly the same amount in 1914 — bouncing up and down a bit, but averaging no inflation whatsoever for 117 years. The Industrial Revolution would qualify as economically functional. Enlarge the picture, and the pound took 164 years between 1750 and 1914 to roughly halve in value. Yet in the century since the first world war? The pound has plunged to the penny.
I don't have the figures at hand - his or anyone else's - inflation, interest, economic growth or otherwise. So I can't be sure about these claims. However, the focus is again on the idea of money as some store of value rather than its far more functional and important attributes. I think the long-run - and by that I mean over several centuries - interest rate in England is about 1%, which leads me to think that inflation isn't nearly the bugbear he's making it out to be.

The ‘almighty dollar’ is no different. One dollar today is worth one cent of a century ago. Although classically one primary purpose of a currency is to act as a store of value, modern currencies are no longer intended to do so. The dollar retains its coveted status only because other currencies are corrupting even faster. The only real check on inflation, every other country is also playing the printing-press game, competing over whose money is the more worthless.
No. Currencies both modern and ancient are not "intended" to do so. This isn't a modern phenonmenon. What's the relative purchasing power of your modern v century-old dollar? What's the difference between size of the US economy now versus 100 years ago?

The US dollar retains its coveted status because it's the world's reserve currency; of the world's largest economy and only superpower. Backed up by unprecedented levels of force. Nothing to do with a silly moralising word play - corrupting? - and everything to do with the reality of geo-politics.

The purposeful inflation of fiat currencies, the very measure of which is rigged to underestimate the degradation of a people’s savings (imagine, in Britain, that the statistic excludes the cost of housing), amounts to a steady, deliberate usurpation of a nation’s wealth, and constitutes the ultimate stealth tax. Deficit-dependent governments love inflation, because they can repay loans of more valuable money with crap money.

I had a ferocious argument with a left-leaning journalist not long ago, who jeered that ‘sound money’ was a fetish of the rich, to the detriment of the poor. I differed. Although monetary decay favours debtors over savers, these days the wealthy are as apt to rely on debt as the impoverished, and on a much grander scale. Who takes out multi–million-pound mortgages in Kensington? Not the exiled residents of Grenfell Tower.
What do you know, in the great creditor v debtor debate he's on the side of the creditor. He should have listened to the "left-leaning journalist". One could broaden the argument a little further and consider much of the libertarian/classical liberal world-view as a fetishisation of the idea of the "deserving rich" (whose wealth must be preserved) and the "deserving poor" (whose circumstances are of their own making and thus deserving of no assistance at all).

"Who takes out multi–million-pound mortgages in Kensington?"

Answer: those with the million-pound incomes to service them.
Especially with today’s near-zero interest rates, it is those who have accrued only modest capital who are especially screwed by a currency that evaporates. The rich can afford to play games with their wealth. For the frugal working and middle classes with small savings on which they depend for retirement, not only is it difficult to make gains hand over fist; without putting precious nest eggs at risk of getting smashed — in equities, for example — it is impossible even to keep what they already have.
A rather pointless spiel without considering why there's such low rates of interest to begin with. Has it not been the case that such rates have persisted since the 2008 GFC? And might those "frugal working and middle classes with small savings" be far more concerned with their current incomes and avoidance of a depression - which whether you accept it or not is the main reason for jacking up supply - than their meagre savings?

It's a trade-off.

Government is too self-interested to be trusted to maintain a currency that sustains its value. The blockchain experiment may not be the answer. (Check out Hashgraph — faster, requiring minimal energy, and more capable of scaling up.) But I hope the renegade entrepreneurs keep trying. For on the face of it, any currency that costs nothing to multiply, when its manufacturer actively benefits from running the presses, will inexorably fritter to confetti. Citizens in any income stratum should have a right to expect that a pound in their pocket today will buy a pound’s worth of goods or services tomorrow. But apparently that’s pie-in-the-sky. What was do-able in 1797 we can’t, or won’t, do now.

Hilariously, even the Bank of England is now considering generating its own digital currency — which Mark Carney would prefer to use only for transfers between central banks, but which many of the governor’s colleagues would like to market directly to consumers. I say ‘hilariously’, because a Bank of England Bitcoin would be linked to the value of the pound. Great. Can’t wait.
That first paragraph is a mix of hyperbole and the previously mentioned obsession/fetishisation. But more than that, it betrays a remarkable ignorance of history. Governments or States as issuers of currency either directly, or indirectly through the creation of a private monopoly bank - which is how the Bank of England first started - goes back a lot further than 1797. The idea of a circulating, widely accepted currency is as much a matter of trust and confidence. Do you trust the state? Do we all trust European state power when we use the Euro? Or US state power when we utilise dollars? I think the answer to that is obviously, yes.

We live in states - mostly democracies so we have some say in how they're run - and we pay our taxes in the state issued medium of exchange. We're all supposed to benefit from this "manufacture" and in a large part we do. So the criticisms of the author are either born out of a latent anarchism or betray the sort of schizo-dissonance of what I'm guessing his worldview happens to be. States aren't going away and neither is their ability to regulate their societies - just as Ross Ulbrict found to his considerable cost.

Imagine a secure international cryptocurrency whose steady value was not subjected to deliberate, systematic decay, whose supply was strictly limited, whose coin was universally accepted, and whose production was beyond the control of the state. Even if the investment couldn’t be expected to appreciate in the slightest, I’d put my every last farthing in such a currency in a heartbeat.
Yes imagine this fantasy world. Would its value be steady if its supply was strictly limited? Steady enough for everyday commerce? Would it avoid Gresham's Law? Will it be used to pay our taxes? Will states exist?

I'm going to say No, No, No and another No and Yes.

I see Seneca was banging on about the South Sea Bubble earlier in the thread. What I don't think was mentioned was that around the same time as that venture, there was another one known as the Darien Scheme. This was a case were one of the founders of the Bank of England (a Scot) came up with the idea of a private corporation representing Scottish investors, which would have a trading monopoly between Scotland, bits of Africa and an overland trade link between the Atlantic and Pacific on the Panama isthmus. A Scottish colony in Central America!

Anyway, it ended up bankrupting almost everyone in the Scottish Lowlands and precipitated the 1707 Act of Union. Like the South Sea Company, the Darien Scheme studiously ignored and fobbed off the notion that the Spanish Empire might not take too kindly to the idea; step in, and smash them. Well, that's ultimately what happened.

States react. They can be slow to do so. But when they do, it can be really nasty.

A cautionary tale.

Anyway, semi-drunken ramble, over.
That, Sir, is a well constructed and evidently educated rebuttal of Shriver's article. I've learnt, and will learn, and awful lot from it. I'd happily tip a couple of satoshi's, please send your address.

On the broader question of cryptocurrency, we're rapidly moving into a more virtual world allied to the current physical one where a medium of exchange is needed allied to existing ones. Surely, cryptocurrencies fit this bill? For example, a virtual knife or firearm in COD (or fashion etc in Second Life) can costs hundreds of dollars. The internet needs it's own form of money.

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Sun Jan 07, 2018 9:13 am
by Santa
Conservative Eddie wrote:

Why cryptocurrency is the answer
The impulse behind them is revolutionary: to take the control of money away from government

Lionel Shriver
I haven't noticed any other replies to this article so I'd be curious to read what others think of it. I think this can be taken as an issue - one of history, philosophy and world-views - somewhat removed (though really it's all intertwined on some level) from the other discussions on here and elsewhere about price action, the underlying blockchain tech, is it a bubble/isn't it a bubble etc...

Anyway, as a sort of preface: I've read quite a few books and articles recently - well over the last few years - on economic history (my academic background is in science - biology - so this amounts to a hobby interest at best); Reinert, Graeber, Tooze, Scott etc...all very interesting and worth reading.

Some recurring themes do emerge from this and one of them chimes very closely with what's going on here, which paint these current "revolutionary impulses" as not at all novel; in fact a re-hash of prior attempts at "preserving the store of value" - gold and silver, typically- and is yet another manifestation of the schizophrenic relationship that exists in the classical liberal/libertarian mind between their capital and "rights" and its uneasy yet necessary dependence on state power.

So Locke and Hayek et al have been dug up and reanimated: a political project to create apolitical money!
The craze for cryptocurrency can be explained by a host of factors: the allure of getting rich quick; the attraction of off-the-grid accountancy for malefactors like tax evaders and drug dealers (though Bitcoin is traceable); the glamour of the new. Despite blockchain currencies’ wild volatility thus far, I’d still posit that the more underlying attraction is to a reliable store of value. Bitcoin investors may not recognise their motivation as such, but the impulse behind computer-generated currency is revolutionary: to take the production and control of money away from government.
Firstly, Bitcoin and the rest of these cryptos aren't currencies. They don't function as such. They don't operate as widely used mediums of exchange or units of account. That is what currencies or money have typically been - historically. The idea of money operating as a store of value appears to be far less important and significant historically, and even now, than its day-to-day use - as a medium of exchange and unit of account - and the trust and confidence the great mass of the population have in it as such.

The one relatively small-scale and consistent use of crypto - and Bitcoin in particular - as currency that I can recall was during the operation of Silk Road on the darkweb. In that instance it functioned as a discrete medium of exchange and actual unit of account. This is important as it being the unit of account mirrors how money was/is mainly used - money as credit or debt which dwarfs money in any other form hinges on this concept. Money as more of an abstraction than that of a hard currency.

So crypto as a currency greasing the wheels of a computer generated market for drugs (amongst other things), created by libertarian Ross Ulbricht who, when he wasn't bemoaning the burdensome and coercive state and quoting Von Mises, was collecting a tidy profit as facilitator of this new world "...creating an economic simulation to give people a first-hand experience of what it would be like to live in a world without the systemic use of force".

The State stepped in and now Ross Ulbricht is serving life without parole. Libertarian fantasy over.

But he did get a crypto to actually work as a currency - in a limited sense - and I've yet to see another example as "successful".

Now that we live in a world of 100 per cent fiat currencies — backed by nothing — governments can print their hearts out, and they do. The rounds of quantitative easing since 2008 — money-printing on Red Bull — may not seem to have produced the inflation many a conservative economist predicted. But they have. Asset bubbles like London and New York property markets, fine art, collectibles, equities — hitting historic highs — and Bitcoin itself are all evidences of inflation. There’s too much money in the world right now, sloshing from investment to investment and bloating every bolt hole one can think of to stash with capital (an unholy proportion of which is founded on debt). Because it costs central banks nothing to turn on the pumps.
Well, I guess if you simply re-define the term "inflation" then it can be whatever you want it to be. Central banks obsess over inflation - it's pretty much the raison d'être of the ECB - and the main ones, by and large, have stuck to their task and largely stayed within the targets they set. There's also a peculiarly monetarist-esque obsession here about the money supply and inflation. One could as easily argue that increasing the money supply is necessary if you want economic growth - apart from making that argument, that is in fact what actually happens.

Also this conception of fiat money and it being "backed by nothing" - this is an old and tired argument - yet it is backed by something. The State! That's something - OK, it's a social construct but then so is money!

What makes the likes of Bitcoin extraordinary is that the currency is limited in quantity, thus functioning more like precious metals. Producing a single Bitcoin requires so much computing power that environmentalists have criticised the process as cataclysmically wasteful of energy. Further, every Bitcoin mined requires more computing power than the one before, meaning that the total coinage in circulation rapidly approaches an absolute mathematical limit.
This is classic Locke. The idea of money as being tangible; durable; limited and determined by natural laws - like precious metals. What is described as "extraordinary" about Bitcoin - its limited supply - is its achilles heel. It's why it and any other similarly constrained crypto will never function as a currency - i.e. a medium of exchange and unit of account - at scale. It won't happen. Money is far too abstract and intangible- specifically its form as credit - for this not to end in disaster if actually attempted amongst the mass population.

The Lockean example of this occured in the 1690s when he opposed a recall and reissue of silver coinage at a lower weighting, which would have had the effect of stabilising the price and increasing the supply. He won the day and its value was restruck as before. Disaster ensued, Gresham's Law set in and coinage in circulation collapsed. Deflation, a price collapse, hunger and unrest...
Contrast that with fiat currencies. The smallest little child knows that keeping your capital in cash is a mug’s game. For years central banks have cheerfully informed us that they aim for an inflation rate of 2 per cent. (Mind, at only 3 per cent — which the UK’s CPI currently exceeds — inflation will halve the value of your money in a mere 23 years.) The public has grown inured to the notion that a functional economy mysteriously requires their currency to rot like meat. This is a lie. One British pound in 1797 was worth about exactly the same amount in 1914 — bouncing up and down a bit, but averaging no inflation whatsoever for 117 years. The Industrial Revolution would qualify as economically functional. Enlarge the picture, and the pound took 164 years between 1750 and 1914 to roughly halve in value. Yet in the century since the first world war? The pound has plunged to the penny.
I don't have the figures at hand - his or anyone else's - inflation, interest, economic growth or otherwise. So I can't be sure about these claims. However, the focus is again on the idea of money as some store of value rather than its far more functional and important attributes. I think the long-run - and by that I mean over several centuries - interest rate in England is about 1%, which leads me to think that inflation isn't nearly the bugbear he's making it out to be.

The ‘almighty dollar’ is no different. One dollar today is worth one cent of a century ago. Although classically one primary purpose of a currency is to act as a store of value, modern currencies are no longer intended to do so. The dollar retains its coveted status only because other currencies are corrupting even faster. The only real check on inflation, every other country is also playing the printing-press game, competing over whose money is the more worthless.
No. Currencies both modern and ancient are not "intended" to do so. This isn't a modern phenonmenon. What's the relative purchasing power of your modern v century-old dollar? What's the difference between size of the US economy now versus 100 years ago?

The US dollar retains its coveted status because it's the world's reserve currency; of the world's largest economy and only superpower. Backed up by unprecedented levels of force. Nothing to do with a silly moralising word play - corrupting? - and everything to do with the reality of geo-politics.

The purposeful inflation of fiat currencies, the very measure of which is rigged to underestimate the degradation of a people’s savings (imagine, in Britain, that the statistic excludes the cost of housing), amounts to a steady, deliberate usurpation of a nation’s wealth, and constitutes the ultimate stealth tax. Deficit-dependent governments love inflation, because they can repay loans of more valuable money with crap money.

I had a ferocious argument with a left-leaning journalist not long ago, who jeered that ‘sound money’ was a fetish of the rich, to the detriment of the poor. I differed. Although monetary decay favours debtors over savers, these days the wealthy are as apt to rely on debt as the impoverished, and on a much grander scale. Who takes out multi–million-pound mortgages in Kensington? Not the exiled residents of Grenfell Tower.
What do you know, in the great creditor v debtor debate he's on the side of the creditor. He should have listened to the "left-leaning journalist". One could broaden the argument a little further and consider much of the libertarian/classical liberal world-view as a fetishisation of the idea of the "deserving rich" (whose wealth must be preserved) and the "deserving poor" (whose circumstances are of their own making and thus deserving of no assistance at all).

"Who takes out multi–million-pound mortgages in Kensington?"

Answer: those with the million-pound incomes to service them.
Especially with today’s near-zero interest rates, it is those who have accrued only modest capital who are especially screwed by a currency that evaporates. The rich can afford to play games with their wealth. For the frugal working and middle classes with small savings on which they depend for retirement, not only is it difficult to make gains hand over fist; without putting precious nest eggs at risk of getting smashed — in equities, for example — it is impossible even to keep what they already have.
A rather pointless spiel without considering why there's such low rates of interest to begin with. Has it not been the case that such rates have persisted since the 2008 GFC? And might those "frugal working and middle classes with small savings" be far more concerned with their current incomes and avoidance of a depression - which whether you accept it or not is the main reason for jacking up supply - than their meagre savings?

It's a trade-off.

Government is too self-interested to be trusted to maintain a currency that sustains its value. The blockchain experiment may not be the answer. (Check out Hashgraph — faster, requiring minimal energy, and more capable of scaling up.) But I hope the renegade entrepreneurs keep trying. For on the face of it, any currency that costs nothing to multiply, when its manufacturer actively benefits from running the presses, will inexorably fritter to confetti. Citizens in any income stratum should have a right to expect that a pound in their pocket today will buy a pound’s worth of goods or services tomorrow. But apparently that’s pie-in-the-sky. What was do-able in 1797 we can’t, or won’t, do now.

Hilariously, even the Bank of England is now considering generating its own digital currency — which Mark Carney would prefer to use only for transfers between central banks, but which many of the governor’s colleagues would like to market directly to consumers. I say ‘hilariously’, because a Bank of England Bitcoin would be linked to the value of the pound. Great. Can’t wait.
That first paragraph is a mix of hyperbole and the previously mentioned obsession/fetishisation. But more than that, it betrays a remarkable ignorance of history. Governments or States as issuers of currency either directly, or indirectly through the creation of a private monopoly bank - which is how the Bank of England first started - goes back a lot further than 1797. The idea of a circulating, widely accepted currency is as much a matter of trust and confidence. Do you trust the state? Do we all trust European state power when we use the Euro? Or US state power when we utilise dollars? I think the answer to that is obviously, yes.

We live in states - mostly democracies so we have some say in how they're run - and we pay our taxes in the state issued medium of exchange. We're all supposed to benefit from this "manufacture" and in a large part we do. So the criticisms of the author are either born out of a latent anarchism or betray the sort of schizo-dissonance of what I'm guessing his worldview happens to be. States aren't going away and neither is their ability to regulate their societies - just as Ross Ulbrict found to his considerable cost.

Imagine a secure international cryptocurrency whose steady value was not subjected to deliberate, systematic decay, whose supply was strictly limited, whose coin was universally accepted, and whose production was beyond the control of the state. Even if the investment couldn’t be expected to appreciate in the slightest, I’d put my every last farthing in such a currency in a heartbeat.
Yes imagine this fantasy world. Would its value be steady if its supply was strictly limited? Steady enough for everyday commerce? Would it avoid Gresham's Law? Will it be used to pay our taxes? Will states exist?

I'm going to say No, No, No and another No and Yes.

I see Seneca was banging on about the South Sea Bubble earlier in the thread. What I don't think was mentioned was that around the same time as that venture, there was another one known as the Darien Scheme. This was a case were one of the founders of the Bank of England (a Scot) came up with the idea of a private corporation representing Scottish investors, which would have a trading monopoly between Scotland, bits of Africa and an overland trade link between the Atlantic and Pacific on the Panama isthmus. A Scottish colony in Central America!

Anyway, it ended up bankrupting almost everyone in the Scottish Lowlands and precipitated the 1707 Act of Union. Like the South Sea Company, the Darien Scheme studiously ignored and fobbed off the notion that the Spanish Empire might not take too kindly to the idea; step in, and smash them. Well, that's ultimately what happened.

States react. They can be slow to do so. But when they do, it can be really nasty.

A cautionary tale.

Anyway, semi-drunken ramble, over.
Good summary of what a lot of us have been saying.

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Sun Jan 07, 2018 9:19 am
by sorCrer
Santa wrote:Good summary of what a lot of us have been saying.
You didn't read it, did you?

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Sun Jan 07, 2018 9:20 am
by Santa
sorCrer wrote:
Santa wrote:Good summary of what a lot of us have been saying.
You didn't read it, did you?
I did. I'm not sure that you understood it though since you made that comment.

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Sun Jan 07, 2018 9:41 am
by Harveys
Did that really need to be quoted three f**king times.

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Sun Jan 07, 2018 9:44 am
by Santa
Harveys wrote:Did that really need to be quoted three f**king times.
Need? No.

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Sun Jan 07, 2018 9:48 am
by sorCrer
Santa wrote:
sorCrer wrote:
Santa wrote:Good summary of what a lot of us have been saying.
You didn't read it, did you?
I did. I'm not sure that you understood it though since you made that comment.
Well nobody has really been saying much of that at all. Regardless, crypto-currencies in one form or another are here to stay.

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Sun Jan 07, 2018 7:14 pm
by CrazyIslander
Should/can bitcoin be divided into smaller units for the purpose of buying online? Eg 1btc = £20k = 20,000 mini btc £1 each?

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Sun Jan 07, 2018 7:35 pm
by toocoldhere
CrazyIslander wrote:Should/can bitcoin be divided into smaller units for the purpose of buying online? Eg 1btc = £20k = 20,000 mini btc £1 each?
Yes, you can purchase fractions of one

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Sun Jan 07, 2018 7:46 pm
by Santa
Seneca of the Night wrote:Good point about the fiat money fallacy. It is not backed by nothing. It is backed by a monopoly capacity to raise funds by taxation, at the point of a gun. Markets have long memories for this sort of stuff too; the more effective your tax raising capacity the more secure your currency and the better position you have in the bond market. UK strong currency; Greece shithouse one (notwithstanding that they theoretically not have one).
It's a cash flow thing. Value derives from the ability of the thing to generate cash flow.

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Sun Jan 07, 2018 7:49 pm
by goeagles
CrazyIslander wrote:Should/can bitcoin be divided into smaller units for the purpose of buying online? Eg 1btc = £20k = 20,000 mini btc £1 each?
Up to 8 decimals. 0.00000001 BTC is called a "satoshi", or a "sat" for short.

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Mon Jan 08, 2018 2:56 am
by dam0
ETH turn for a bit of a run. Diversification is your best friend.

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Mon Jan 08, 2018 5:30 am
by Rumham
sorCrer wrote:On the broader question of cryptocurrency, we're rapidly moving into a more virtual world allied to the current physical one where a medium of exchange is needed allied to existing ones. Surely, cryptocurrencies fit this bill? For example, a virtual knife or firearm in COD (or fashion etc in Second Life) can costs hundreds of dollars. The internet needs it's own form of money.
I was in China recently and withdrew some cash at the airport. Over the next week I'm not sure I saw one person use cash to pay for anything. My friends don't carry wallets anymore as it is all done on wechat pay over their phones. That is where this is going to remove physical cash but the currency remains. Cryptocurrencies are nonsense.

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Mon Jan 08, 2018 6:39 am
by RuggaBugga
Rumham wrote:
sorCrer wrote:On the broader question of cryptocurrency, we're rapidly moving into a more virtual world allied to the current physical one where a medium of exchange is needed allied to existing ones. Surely, cryptocurrencies fit this bill? For example, a virtual knife or firearm in COD (or fashion etc in Second Life) can costs hundreds of dollars. The internet needs it's own form of money.
I was in China recently and withdrew some cash at the airport. Over the next week I'm not sure I saw one person use cash to pay for anything. My friends don't carry wallets anymore as it is all done on wechat pay over their phones. That is where this is going to remove physical cash but the currency remains. Cryptocurrencies are nonsense.
:? I've barely used cash to pay for anything for 20 years or more.

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Mon Jan 08, 2018 7:45 am
by kiwinoz
My view is the current debt based system is in for a reset of significance that will mean that the current "system" will be in chaos for some time. Not just shares but the end of the 35 year bull market in bonds and the nearly $300T of debt having its day of reckoning. Cryptos like gold and silver are the only money type assets that can be held safely out of the system. Think Greece, Cyprus and Venezuela but on a much bigger scale. I could be wrong but I am very happy with my returns and my safety net.

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Mon Jan 08, 2018 7:51 am
by Rumham
RuggaBugga wrote:
Rumham wrote:
sorCrer wrote:On the broader question of cryptocurrency, we're rapidly moving into a more virtual world allied to the current physical one where a medium of exchange is needed allied to existing ones. Surely, cryptocurrencies fit this bill? For example, a virtual knife or firearm in COD (or fashion etc in Second Life) can costs hundreds of dollars. The internet needs it's own form of money.
I was in China recently and withdrew some cash at the airport. Over the next week I'm not sure I saw one person use cash to pay for anything. My friends don't carry wallets anymore as it is all done on wechat pay over their phones. That is where this is going to remove physical cash but the currency remains. Cryptocurrencies are nonsense.
:? I've barely used cash to pay for anything for 20 years or more.
Congratulations.

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Mon Jan 08, 2018 8:13 am
by sorCrer
Rumham wrote:
sorCrer wrote:On the broader question of cryptocurrency, we're rapidly moving into a more virtual world allied to the current physical one where a medium of exchange is needed allied to existing ones. Surely, cryptocurrencies fit this bill? For example, a virtual knife or firearm in COD (or fashion etc in Second Life) can costs hundreds of dollars. The internet needs it's own form of money.
I was in China recently and withdrew some cash at the airport. Over the next week I'm not sure I saw one person use cash to pay for anything. My friends don't carry wallets anymore as it is all done on wechat pay over their phones. That is where this is going to remove physical cash but the currency remains. Cryptocurrencies are nonsense.
Except we don't want to pay a fee to 3rd party for the transaction or at very least want to be able to reduce this fee. I haven't used cash much myself for years however the majority of people in my country use it daily and some 30% of adults don't even have bank accounts.

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Mon Jan 08, 2018 8:42 am
by Rumham
sorCrer wrote:
Rumham wrote:
sorCrer wrote:On the broader question of cryptocurrency, we're rapidly moving into a more virtual world allied to the current physical one where a medium of exchange is needed allied to existing ones. Surely, cryptocurrencies fit this bill? For example, a virtual knife or firearm in COD (or fashion etc in Second Life) can costs hundreds of dollars. The internet needs it's own form of money.
I was in China recently and withdrew some cash at the airport. Over the next week I'm not sure I saw one person use cash to pay for anything. My friends don't carry wallets anymore as it is all done on wechat pay over their phones. That is where this is going to remove physical cash but the currency remains. Cryptocurrencies are nonsense.
Except we don't want to pay a fee to 3rd party for the transaction or at very least want to be able to reduce this fee. I haven't used cash much myself for years however the majority of people in my country use it daily and some 30% of adults don't even have bank accounts.
But you don't pay a fee. If you buy a burger and beer for 20 USD and pay by wechat then it will charge you 20 USD. The fee is minuscule and charged to the vendor. Their game is mass volume and it doesn't affect you in anyway.

I was sitting at a table of 10 and maybe 3 people had wallets plus myself as the dinosaur with cash. The rest just had their phone. No cash, no credit cards. People swapping money between themselves over their phones and nobody even wanted my cash other than to tip the staff. Think mpesa on steroids.

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Mon Jan 08, 2018 9:06 am
by bimboman
sorCrer wrote:
Rumham wrote:
sorCrer wrote:On the broader question of cryptocurrency, we're rapidly moving into a more virtual world allied to the current physical one where a medium of exchange is needed allied to existing ones. Surely, cryptocurrencies fit this bill? For example, a virtual knife or firearm in COD (or fashion etc in Second Life) can costs hundreds of dollars. The internet needs it's own form of money.
I was in China recently and withdrew some cash at the airport. Over the next week I'm not sure I saw one person use cash to pay for anything. My friends don't carry wallets anymore as it is all done on wechat pay over their phones. That is where this is going to remove physical cash but the currency remains. Cryptocurrencies are nonsense.
Except we don't want to pay a fee to 3rd party for the transaction or at very least want to be able to reduce this fee. I haven't used cash much myself for years however the majority of people in my country use it daily and some 30% of adults don't even have bank accounts.
You pay 6% to coin exchanges. Are you really agnostic to fees

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Mon Jan 08, 2018 9:14 am
by sorCrer
bimboman wrote:
sorCrer wrote:
Rumham wrote:
sorCrer wrote:On the broader question of cryptocurrency, we're rapidly moving into a more virtual world allied to the current physical one where a medium of exchange is needed allied to existing ones. Surely, cryptocurrencies fit this bill? For example, a virtual knife or firearm in COD (or fashion etc in Second Life) can costs hundreds of dollars. The internet needs it's own form of money.
I was in China recently and withdrew some cash at the airport. Over the next week I'm not sure I saw one person use cash to pay for anything. My friends don't carry wallets anymore as it is all done on wechat pay over their phones. That is where this is going to remove physical cash but the currency remains. Cryptocurrencies are nonsense.
Except we don't want to pay a fee to 3rd party for the transaction or at very least want to be able to reduce this fee. I haven't used cash much myself for years however the majority of people in my country use it daily and some 30% of adults don't even have bank accounts.
You pay 6% to coin exchanges. Are you really agnostic to fees
I don't pay 6% on local exchanges. Taker pays 1%, maker 0.

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Mon Jan 08, 2018 10:02 am
by Rumham
sorCrer wrote:
bimboman wrote:
sorCrer wrote:
Rumham wrote:
sorCrer wrote:On the broader question of cryptocurrency, we're rapidly moving into a more virtual world allied to the current physical one where a medium of exchange is needed allied to existing ones. Surely, cryptocurrencies fit this bill? For example, a virtual knife or firearm in COD (or fashion etc in Second Life) can costs hundreds of dollars. The internet needs it's own form of money.
I was in China recently and withdrew some cash at the airport. Over the next week I'm not sure I saw one person use cash to pay for anything. My friends don't carry wallets anymore as it is all done on wechat pay over their phones. That is where this is going to remove physical cash but the currency remains. Cryptocurrencies are nonsense.
Except we don't want to pay a fee to 3rd party for the transaction or at very least want to be able to reduce this fee. I haven't used cash much myself for years however the majority of people in my country use it daily and some 30% of adults don't even have bank accounts.
You pay 6% to coin exchanges. Are you really agnostic to fees
I don't pay 6% on local exchanges. Taker pays 1%, maker 0.
So a fee if paid. What is the advantage to this then?

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Mon Jan 08, 2018 10:11 am
by bimboman
What’s the credit card loading fee?

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Mon Jan 08, 2018 10:15 am
by sorCrer
bimboman wrote:What’s the credit card loading fee?
I use EFT's to get money in and out of Luno.

Buying on Bitstamp (foreign exchange) would cost 5% plus forex charges. Although the arbitrage until recently was in the region of 15 - 20% .

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Mon Jan 08, 2018 4:13 pm
by TranceNRG
Ripple down close to 30%! :( Any negative news relating to Ripple?

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Mon Jan 08, 2018 5:29 pm
by sorCrer
TranceNRG wrote:Ripple down close to 30%! :( Any negative news relating to Ripple?
Everything was down. Back up again.

Microsoft not taking BTC payments. China talking about shutting down mining operations. Coinmarket Cap removing Korean exchanges from price calculations.

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Mon Jan 08, 2018 6:43 pm
by goeagles
Old video but pretty cool use case (the demo starts at 6:25) for Factom: https://vimeo.com/154918515

One thing that is interesting is that for a lot of these tokens, there are multiple entities with the same name. For example, there is Factom the company, Factom the protocol and Factom (FCT, also known as Factoids) the cryptoasset. Factom the company goes and drums up business for its layer on top of the Factom protocol, while Factoids are required to be burned every time the Factom protocol is used, based on the amount of data required (currently .001 USD per kb).

Ripple has a similar structure, with Ripple the company, Ripple the protocol and Ripple (XRP) the cryptoasset. I have a lot of problems with XRP, not the least of which it isn't actually required to use the Ripple protocol. So many seem to think they are investing in Ripple, who has developed relationships with major banks, or the protocol but are actually investing in a token that isn't even required to use the protocol and is unlikely to be used by those banks. I think there are likely a lot of similar situations out there that will end up with a bubble pop for these types at some point.

Re: €100 of Bitcoin in 2010 = €70m today

Posted: Mon Jan 08, 2018 6:45 pm
by goeagles
YOYO wrote:
sorCrer wrote:
TranceNRG wrote:Ripple down close to 30%! :( Any negative news relating to Ripple?
Everything was down. Back up again.

Microsoft not taking BTC payments. China talking about shutting down mining operations. Coinmarket Cap removing Korean exchanges from price calculations.
So what does all that mean for the long term future of crypto coin trading?
1. Not sure.
2. They're looking for new homes, such as Canada.
3. Nothing. Korean prices were basically 30% higher across the board. The big Korean exchanges like Bithumb are no fee, so there is a lot of fake volume there. Fake volume meant that they were more heavily weighted than other exchanges than they should have been.