You know you can buy any asset with traditional currency and create the exact same scenario ��
This argument only would work if people’s only option for cash was to spend on disposable goods and services or hold as cash
There is also literally an entire industry around currency trading that does exactly this - moving their funds into currencies they thing will appreciate
forex trading though is predicated on constant bets on relatively tiny increases, those value fluctuations rarely register with the general population or affect their activity.
And yes Governments do constantly monitor the money supply to check deflation, they will print a ton of money to balance it out if it starts to occur, something that you cant do with a pegged currency, whether you peg it to gold or some arbitary digital rule.
Imagine if Canada used bitcoin right now instead of a centrally controlled dollar, there would be no covid relief, the Government literally wouldnt have any money to give out, the streets would be full of the recently evicted unemployed on soup kitchen lines, you know like 1929.
forex trading though is predicated on constant bets on relatively tiny increases, those value fluctuations rarely register with the general population or affect their activity.
And yes Governments do constantly monitor the money supply to check deflation, they will print a ton of money to balance it out if it starts to occur, something that you cant do with a pegged currency, whether you peg it to gold or some arbitary digital rule.
Imagine if Canada used bitcoin right now instead of a centrally controlled dollar, there would be no covid relief, the Government literally wouldnt have any money to give out, the streets would be full of the recently evicted unemployed on soup kitchen lines, you know like 1929.
I’m not arguing Bitcoin should replace CAD or USD today or anytime soon
Should every car be replaced by a Tesla tomorrow ? Lots of logistical problems
Again- if you’re in the UK , Canada , US or Euro region you have good stable ( but very expensive ) banking
Crypto can reduce costs to merchants, and provide an easily liquid and accessible currency
It is literally easier to buy crypto then USD in a lot of countries
I don't think btc behaves like a currency at this point, and I don't think it has to. It has traits of more than one asset class now, and its place in the markets and role in financial systems is still evolving.
What position a person takes on btc will relate to their understanding and analysis of many different factors, from global macro trends to the underlying tech and mathematics to the political and regulatory trends. I don't think anyone worth listening to on the topic lacks curiosity and an open mind to the possibility of being wrong, because it's a piece in a very complex and still-emerging puzzle. That applies whether you're a supporter or detractor. The global financial and economic landscape is in a period of significant change. Many chips are yet to fall and people at this point just need to make their own bets based on the best knowledge and analysis they've got.
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Exp:
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Originally Posted by Jason14h
I never said said anything about Bitcoin being anti-inflationary as a key argument for its usefulness..
I never said you did say that, I said that you claimed deflation of bitcoin (aka increase in value of each coin) is the same as inflation of a fiat currency (printing more American dollars). Here, again, is where you make that false claim:
Quote:
Originally Posted by Jason14h
The increase in value/market cap is the same as 'printing' more cash and increasing the USD total world 'market cap' of USD.
Inflation is a core feature of our current financial system, you cannot just swap it out for deflation and tinker around a bit to fix the systemic issues that would arise. Just one example is loans - if I loan you a bitcoin at 5% interest, next year you owe me 1.05 bitcoins. If the future bitcoin has appreciated 20% in value that year, you now owe me the equivalent of 1.26 bitcoins, for a real interest rate of 26%. You would need to charge negative interest rates to make loans attractive to borrowers in that case, and why would a bank do that when they could just keep the money for a year and make 20%?
This is but one reason why the idea of subdividing bitcoins smaller and smaller over time, aka deflation, is not workable. Another is that, unlike fiat money supply which is controlled by governments, there is going to be no central authority which will be able to control the rate at which deflation occurs. This is not a strength of bitcoin, but a weakness - how will it deflate? Do you think human beings willingly will take a yearly salary cut? Merchants will charge less and less bitcoin for their goods just because? Where is the incentive, and what market force will cause that to happen?
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Originally Posted by Jason14h
You ignored the entire rest of my post. I argued cost is a key that blockchain can massively disrupt.
Not with the blockchain bitcoin uses. Maybe some better-designed crypto might do that, but bitcoin is extremely inefficient at recording transactions. A cursory search shows that the btr transaction fee on October 29th of this year was $11.66. That is hardly disruptive, other than negatively. https://www.coindesk.com/bitcoin-tra...-fees-hashrate
I don't really care enough to go through every single thing you assert and check it. Explain how deflation would work, with concrete examples, and I'll be happy to debate that, though.
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Inflation is a core feature of our current financial system, you cannot just swap it out for deflation and tinker around a bit to fix the systemic issues that would arise. Just one example is loans - if I loan you a bitcoin at 5% interest, next year you owe me 1.05 bitcoins. If the future bitcoin has appreciated 20% in value that year, you now owe me the equivalent of 1.26 bitcoins, for a real interest rate of 26%. You would need to charge negative interest rates to make loans attractive to borrowers in that case, and why would a bank do that when they could just keep the money for a year and make 20%?
How is that any different then if I lend you 1.00 CAD dollars and then price of CAD $ relative to USD has appreciated 20%. You have lost USD purchasing power.
If the argument is Canadian goods and services purchase price is more stable to the Canadian $$$ then it would be for Bitcoin, Well, Maybe. Unless you need good that come from the states and the cost of those goods has gone up, thus making you real purchasing power go down. This is already how the world economy runs. Different currencies have different values based on their demand and supply of the currency.
Now in North American and Western Europe where prices are stable and the government does a relatively good job of controlling inflation this is a lot lower of a risk, but in many economies holding the local currency results in less purchasing power every day.
You need to convert your purchasing power into a portable means that holds value. Cryptocurrencies make that very easy.
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This is but one reason why the idea of subdividing bitcoins smaller and smaller over time, aka deflation, is not workable. Another is that, unlike fiat money supply which is controlled by governments, there is going to be no central authority which will be able to control the rate at which deflation occurs. This is not a strength of bitcoin, but a weakness - how will it deflate? Do you think human beings willingly will take a yearly salary cut? Merchants will charge less and less bitcoin for their goods just because? Where is the incentive, and what market force will cause that to happen?
Supply and Demand currently dictate the value of a currency. As the government prints more money, if global demand for that currency doesn't follow the new supple, the currency will devalue relative to other currencies.
The US government can print as much USD as they want because there is a massive global demand for USD.
What would happen to the price of a USD if the US government stopped printing more AND demand stayed the same GLOBALLY? It would go through the roof in markets that want to exchange their local currency for the stable purchasing power a USD gives.
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Not with the blockchain bitcoin uses. Maybe some better-designed crypto might do that, but bitcoin is extremely inefficient at recording transactions. A cursory search shows that the btr transaction fee on October 29th of this year was $11.66. That is hardly disruptive, other than negatively. https://www.coindesk.com/bitcoin-tra...-fees-hashrate
Agreed. I am more talking about crypto in general. I have repeated many time Bitcoin may not be the winner. It is still early tech and adoption. It needs to get more scalable and cheaper.
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I don't really care enough to go through every single thing you assert and check it. Explain how deflation would work, with concrete examples, and I'll be happy to debate that, though.
The entire premise of Bitcoin is it doesn't deflate on 'debt' as the traditional monetary systems do, but as the economy as a whole grows.
Your argument isn't anything new/insightful. It has been the argument since the start of fixed supply crypto (It's also why non fixed Crypto currencies have been created/tried/experimented with)
I don't think anyone here (Or at least not me) is arguing Bitcoin will be the only and only world currency, that all other currencies will fall and that governments will only operate on Bitcoin.
At the end up the day Bitcoin may end up better classified as a completely liquid and portable digital asset then a monetary setting currency. However, in reality, all currencies are essentially tied to the USD already and priced accordingly.
When the majority of the world prefers not to hold their local economies currency or lives in a country where the government has strict currency controls that are not for the benefit of their citizens, something will/needs to change. Crypto is the first step in disrupting this system and were starting to see big corporations, governments, banks, and credit instruments all get involved.
One big argument against BTC is that about 20% of the coins are unrecoverable. More than likely they are sitting in wallets on a computer somewhere or the harddrive has been destroyed.
The other interesting aspect of the argument is the cost to business of accepting credit cards, or any other form of payment.
Right now credit cards are around 2.5% in Canada if you get good rates. Can blockchain technology lower that? Can BTC lower that? We are heading that direction, which is great.
I think some people need to sit back and watch it happen. Is BTC going to be the best crypto currency? Who knows. It has some positives and negatives. Most people pumping its tires are probably sitting on quite a few and it benefits them if they price sky rockets.
But the bigger idea at play here is a more decentralized currency system, block chain technology, and lower cost to the consumer and emerging countries to do business.
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China has already introduced it's own digital currency and started paying some government employees with it earlier this year. The ECB has hinted at interest in that future too.
I don't think btc is going to be what works for the nation states or that it's a replacement for the USD, but it doesn't have to be. Being a fungible, divisible, deflationary, liquid asset with supply that's not regulated by a central bank, isn't under ownership or control of a single entity and is easily transported across borders and outside the traditional banking system has value in itself. It's filling a niche in the global financial system. I think that niche is growing, particularly with the growth of emerging market wealth and decreasing confidence in the dollar standard.
Arguments that it doesn't have value because it's not the USD or it's not gold are silly, because it obviously isn't, but it doesn't have to be. There is plenty of space in the world financial markets for differentiation and niche use cases. Niche use cases can still have enormous market caps.
The value probably won't last forever, but nothing does. That doesn't mean it has no value now. That doesn't make owning it or using it now purely speculation either. Companies that were at the top of the Fortune 100 no longer exist and aluminum used to be precious like gold before becoming something we wrap old food with and throw in the trash. They were smart things to own in their time though, as were a million more niche assets that filled demand in their times.
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China has already introduced it's own digital currency and started paying some government employees with it earlier this year. The ECB has hinted at interest in that future too.
I don't think btc is going to be what works for the nation states or that it's a replacement for the USD, but it doesn't have to be. Being a fungible, divisible, deflationary, liquid asset with supply that's not regulated by a central bank, isn't under ownership or control of a single entity and is easily transported across borders and outside the traditional banking system has value in itself. It's filling a niche in the global financial system. I think that niche is growing, particularly with the growth of emerging market wealth and decreasing confidence in the dollar standard.
Arguments that it doesn't have value because it's not the USD or it's not gold are silly, because it obviously isn't, but it doesn't have to be. There is plenty of space in the world financial markets for differentiation and niche use cases. Niche use cases can still have enormous market caps.
The value probably won't last forever, but nothing does. That doesn't mean it has no value now. That doesn't make owning it or using it now purely speculation either. Companies that were at the top of the Fortune 100 no longer exist and aluminum used to be precious like gold before becoming something we wrap old food with and throw in the trash. They were smart things to own in their time though, as were a million more niche assets that filled demand in their times.
So it sounds like a matter of WHEN Bitcoin busts, not iF.
The technology and other competitors may change the world but Bitcoin is the MySpace in this story.
I agree that investing in it can still be very lucrative and it still has upside value before that bust. But if everything is indicating an inevitable bust, how will you time your exit?
So it sounds like a matter of WHEN Bitcoin busts, not iF.
The technology and other competitors may change the world but Bitcoin is the MySpace in this story.
I agree that investing in it can still be very lucrative and it still has upside value before that bust. But if everything is indicating an inevitable bust, how will you time your exit?
Like everything else, to me it's a matter of trying to understand what's going on in the broader context and how what has value now fits into the way things are changing. For now, I think btc is still on the way up and may still be early its evolution. The growth of state-backed digital currency alternatives doesn't worry me, because I see btc as having value in being an alternative to those while the development of state-backed digital currencies is going to encourage broader adoption of digital currency generally.
I don't know what new thing is going to eat btc though. If I did, I'd be working on getting some money into that while continuing to use btc to meet my needs now. That thing may not emerge or become obvious for a long time yet and I'm pretty confident in btc for the foreseeable future. The best I can do in the meantime is continue learning, refining my expectations about where things are going and adapting.
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Its weird to be having a conversation about BTC and its value as a currency and then using this as a reason to see it as an investment, the two are wholly unconnected
Its weird to be having a conversation about BTC and its value as a currency and then using this as a reason to see it as an investment, the two are wholly unconnected
You keep banging this drum and I'm not sure why.
We don't know what BTC will become. Is it something to hold? Something to use as currency? We truly don't know.
A year ago nobody really looked at the idea of a Satoshi as being valued at anything. Now that might become a reality.
Again, this is something that is creating the market while its being pumped, while blockchain is being developed, while its primary use has been black market dealing, while financial institutions are deciding whether to jump on board, while there is a lot of speculation, etc, etc, etc.
I think you'd have to be pretty ignorant to not see the potential. Maybe not BTC, but the idea in general.
I feel like BTC is just the first mover, but the fact that 20% of the coins are unrecoverable is a big issue.
There are other cryptos as well. Ethereum has had a very good year as an example.
Would I bet my life savings on them? No, but I think if you can afford to invest a small bit of money you might get a comfortable return. Long-term however I don't know if it will be an everyday currency or something like gold.
Which is why I find the position you and jammies are taking on this pretty amusing. You're acting as if you KNOW what it won't be, while the rest of us say it could be this, could be that.....why not let it run and see? The overall benefit of what it COULD change is a massive positive for most of the world.
For someone like yourself who loves to rail against the evil USA and their evil empire that controls the world, it sure is strange that you don't jump all over the idea of a cryptocurrency to act as a hedge against the US dollar.
You stake their coin to get your credit, you get 50% credit to what you stake. You also get different tiers of cards/rewards depending on the stake. Its actually pretty neat concept I think, back CAD credit with cryptocurrency. Good for them as well because they get fees in real dollars for operational expenses and (I assume) pay out rewards in their cryptocurrency.
I have a question that perhaps may explain why crypto seems less sensical to me.... I have not seen any store I go to that mentions accepting bitcoin. I know no one that has ever used it to get paid or pay someone with. I know you guys have mentioned paying contractors from across the globe with it, so my question is, do you guys think because America is so dollar centric (understandably so) that crypto just isn't as widespread here?
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Originally Posted by New Era
This individual is not affluent and more of a member of that shrinking middle class. It is likely the individual does not have a high paying job, is limited on benefits, and has to make due with those benefits provided by employer.
I have a question that perhaps may explain why crypto seems less sensical to me.... I have not seen any store I go to that mentions accepting bitcoin. I know no one that has ever used it to get paid or pay someone with. I know you guys have mentioned paying contractors from across the globe with it, so my question is, do you guys think because America is so dollar centric (understandably so) that crypto just isn't as widespread here?
I think the simple answer is that not that many people are familiar or trusting of it yet and that all of the layers of the financial industry needed to make it consumer friendly are still pretty nascent, so it doesn't make sense for most people at this time. Barriers to adoption are still being worked out, and it doesn't happen overnight.
I've known people who were getting paid exclusively in btc, and running businesses that were paid exclusively in btc, with nothing shady about their work. They're obviously rare cases.
I'm fairly confident we'll see broader adoption in future though. The issue raised around the 55 minute mark in the video I shared above about central bank incentives to move towards digital currency may hint at how digital currencies are going to enter most people's lives. The combination of surveillance capitalism and programmable money under central bank control seems a future that is all too possible.
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Visa and MasterCard just suspended payments to Pornhub. If history tells us anything the porn industry is a leader in determining technology outcomes like blu-Ray and VHS, they already accept Bitcoin and Litecoin (according to google) this might be the start of a big push towards accepting Bitcoin as a standard for payments. Imagine being an outdated payment transaction form and refusing to take money. I think it’s a big mistake on their part.
Visa and MasterCard just suspended payments to Pornhub. If history tells us anything the porn industry is a leader in determining technology outcomes like blu-Ray and VHS, they already accept Bitcoin and Litecoin (according to google) this might be the start of a big push towards accepting Bitcoin as a standard for payments. Imagine being an outdated payment transaction form and refusing to take money. I think it’s a big mistake on their part.
Don't forget TRX! Hopefully it will make me a billionaire one day if I don't forget about it.
