BitCoin

Moderators: Elvis, DrVolin, Jeff

Re: BitCoin

Postby Belligerent Savant » Sun Aug 14, 2022 12:40 pm

.
Not so much about Bitcoin but certainly related to digital assets topics in the news recently (particularly, govt overreach). The important take-aways are related to the overblown perception of illicit activity running rampant, which is actually NOT the case when assessing percentages and comparing against FIAT-related illicit activities.

The speculation here is that the average consumer is being primed to believe 'cryptocurrencies' and related transactions are the equivalent of the Wild West, with robbers and thieves at every corner aiming to raid your wallets, and therefore the solution is tighter/more regulation and eventually outlawing anything bespoke and decentralized, opening the door for wider adoption of Centralized Digital Currency.

https://newsletter.banklesshq.com/p/tor ... li-testnet

US Treasury Sanctions Tornado Cash

Here’s a recap of the biggest crypto news in the second week of August.

Tornado Cash sanctions
Tornado Cash is a cryptocurrency mixer that lets users make transactions privately with zk-SNARK technology. Here’s how it works:

1. I want to send you ETH privately

2. I connect my wallet to Tornado Cash, and the platform standardizes all deposit transaction amounts for anonymity (e.g. 1, 10, or 100 ETH)

3. I decide to deposit 10 ETH which goes into Tornado’s shared pool

4. Upon deposit, Tornado gives me a key with a secret hash (called a “private note”) for later withdrawal

5. I send you my private note

6. You wait a day, then withdraw the 10 ETH with the private note to your wallet address

7. A “relayer” charges you a small fee to send the 10 ETH to your wallet, then initiates the withdrawal pays the gas fee on your behalf

8. You receive 10 ETH from me, and there is no on-chain link between both our wallets. Our transaction is completely private.

Tornado Cash is really useful if you value your privacy… or if you’re trying to conduct illegal (but not necessarily immoral) transactions.

For the latter reason, the US Treasury is slapping sanctions on Tornado Cash this week.

Actually, that’s not technically true. “Tornado Cash” is merely a bunch of open-source smart contracts running on a public blockchain. So the logic of sanctioning a smart contract is akin to sanctioning, say, a pool of water.

Our language obscures where the prohibitive burden of the sanction is falling on - it is individuals that are being forbidden from interacting with Tornado Cash, namely privacy-seeking Americans. If you mess with that smart contract, if you dip your toes in that water, you violate our political sanctions and go to jail, says the US Treasury.

In response, a swath of platforms are quickly insulating themselves politically:

Circle, the issuer of USDC, has moved to blacklist wallet addresses that interacted with the Tornado Cash contract. This is prompting discussions in the Maker community to reduce DAI’s reliance on USDC, and depeg the stablecoin altogether from the dollar.

Github has removed Tornado Cash’s source code and banned source contributors (hence the need for decentralized alternatives like Radicle).

Infura and Alchemy, centralized service providers that provide access to on-chain data, have blocked RPC requests to Tornado’s frontend. Even its decentralized alternative Pocket Network has similarly blocked the sanctioned list of wallet addresses from accessing its frontend Portal.

dYdX are also blocking users whose wallet funds have directly interacted with Tornado.

The list (will) goes on.

The US Treasury points to illegal money laundering for slapping sanctions on Tornado Cash, citing the North Korean linked Lazarus Group hackers that has laundered about ~$561M through Tornado.

These numbers look so bad for Tornado when viewed in absolute terms. But can we have some context please? When we zoom in on Tornado’s activity since its launch in 2019, only a minority 10.5% of all its transactional volumes were tied to stolen funds.

Image

If you think 10.5% (~$700M+) is a lot, it isn’t. Chainalysis research shows that a minuscule 0.15% of total cryptocurrency volumes in the whole of 2021 (a boom market nonetheless) were tagged to “illicit” transactions. That’s how little crypto is used in criminal activity.

Image

And that is a drop in the ocean compared to the amount of fiat that is laundered annually, which according to the UN, ranges between $800B-$2T.

If governments are worried about illegal money laundering, there are much bigger problems to worry about than a mixer like Tornado. Sound public policy is targeted at the median, not the margin, and illegal money laundering in Tornado is the result of bad apples at the fringe, rather than the norm. So the impetus for sanctioning a crypto mixer because it abets crime is a pretty flimsy justification.

As I write this, a 29-year-old developer of the Tornado Cash protocol has also apparently been arrested in Amsterdam. Jeez.

One way to respond to this shitshow is of course, to mock it. If any wallet receiving money via Tornado Cash is liable to violate sanctions, what happens when you use the platform to mass send crypto to thousands of recipients?

@josephdelong
Someone is out dusting a bunch of wallets from Tornado with 0.1 ETH lmaaaaooooo
https://etherscan.io/txsInternal?a=0x12 ... 16b8fc&p=1
Image


That is all fun and games and a good exercise in pointing out the sheer illogic of it all, but realistically, the US Treasury is not going to deploy the troops against Jimmy Fallon or anyone using Tornado for an ETH. Remember that while Tornado Cash’s frontend site can be taken down, those with the technical know-how can still access its protocol under the hood, and its code can (and probably will) be forked.

Neeraj K. Agrawal
@NeerajKA

In today's impromptu presentation on the Tornado Cash sanctions, @valkenburgh lays out the case that this is an unconstitutional restriction on freedom of speech.

"We are looking right at the chilling effect"

You can watch the whole thing here:

https://youtube.com/watch?v=XpTrCA3tEKM&t=7s

User avatar
Belligerent Savant
 
Posts: 5214
Joined: Mon Oct 05, 2009 11:58 pm
Location: North Atlantic.
Blog: View Blog (0)

Re: BitCoin

Postby Elvis » Sun Aug 14, 2022 4:44 pm

"Reminder: the monetary system is a tool for directing real outcomes." —Warren Mosler

Crypto enthusiasts don't know this.
“The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.” ― Joan Robinson
User avatar
Elvis
 
Posts: 7411
Joined: Fri Apr 11, 2008 7:24 pm
Blog: View Blog (0)

Re: BitCoin

Postby Belligerent Savant » Sun Aug 14, 2022 4:55 pm

.

Not tracking this. Is this to suggest there are no 'real outcomes' with cryptocurrency?
Certainly, there are. But this also depends on how one defines 'real outcomes'. I mean, are transactions, profits and loss 'real outcomes'? Because cryptocurrencies provide this, and more.
User avatar
Belligerent Savant
 
Posts: 5214
Joined: Mon Oct 05, 2009 11:58 pm
Location: North Atlantic.
Blog: View Blog (0)

Re: BitCoin

Postby Belligerent Savant » Tue Oct 18, 2022 4:31 pm

.
Related to the broad topic of digital currency, privacy, and regulation.

Anessa Allen Santos, JD
Hacker of regulatory obstacles for blockchain entrepreneurs

In response to the #tornadocash sanctions, it was asked whether laws protecting #privacy create a vehicle for crime.

This is a compelling question, and one that I have uniquely struggled with as both a criminal defense attorney and as a corporate attorney for emerging tech companies. The way I have this settled in my mind is to ask the question in reverse – “Which of our laws have worked to meaningfully prevent crime?”

The answer, I think, is fundamentally, none. I am neither a psychologist nor a philosopher, but in my former role as a public defender, I learned that the mindset of serious criminals cares not for lawfulness. Instead, they focus on how to get away with what they have determined to do in spite of laws that forbid such activity.

Consequently, I think the real purpose of laws are generally to:

(1) Provide a reliable set of rules by which well intended folks can govern their communities and their transactions; and

(2) Provide an agreed upon framework by which law abiding folks who appreciate living in civilized societies can have a reasonable expectation of governance

The right of privacy is useful in that offers an environment for people to explore and innovate without fear of reprisal. It is the value of "the marketplace of ideas" that made the idea of America so compelling. When I was a child, privacy was much more protected, and we experienced significantly less crime, but I don’t know if there is a positive correlation between those two points. In contrast, the forced transparency of beneficial ownership and financial transactions has resulted not in less crime, but more government and, ironically, more corruption centralized in transnational enterprises that owe no allegiance to any jurisdiction. As a point of comparison, Europe and the UK have implemented the most strict privacy laws worldwide via the General Data Protection Regulation (GDPR), and yet they don’t suffer any additional crime over America.

When I ask who benefits from the burden of compliance with these mandates for open registries, it is these very same transnational enterprises who have been repeatedly caught participating in the funding of global cartels for human trafficking and other egregious behavior. Yet, when brought before Congress to answer for their overt criminal behavior, they throw up the construction possession defense - they all point the finger at the other person in executive management. They are never held jointly responsible as they should. This is largely due to the proliferation of political campaigns which are funded by these same responsible transnational enterprises.

In conclusion, I stand with what’s best for the people and not for the government.
The government is who benefits from these regulations, and so I generally hold firm against them. Crime has always been, and crime will forever be, but a just society should never burden the backs of the innocent for the sake of the criminals.

#blockchain #crypto #fintech #defi

https://www.linkedin.com/posts/anessaal ... er_desktop
User avatar
Belligerent Savant
 
Posts: 5214
Joined: Mon Oct 05, 2009 11:58 pm
Location: North Atlantic.
Blog: View Blog (0)

Re: BitCoin

Postby Elvis » Fri Jan 20, 2023 5:23 am

"Reminder: the monetary system is a tool for directing real outcomes." —Warren Mosler

Crypto enthusiasts don't know this.




It means that money was invented by governments to organize & mobilize resources to achieve desired outcomes. To this end, money is always issued as a promise with a redemption. Cryptocurrencies promise nothing, they carry no redemption.


Please forgive my delay in response!—circumstances intervened.
“The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.” ― Joan Robinson
User avatar
Elvis
 
Posts: 7411
Joined: Fri Apr 11, 2008 7:24 pm
Blog: View Blog (0)

Re: BitCoin

Postby Belligerent Savant » Tue Jan 24, 2023 2:59 am

When you type, "Cryptocurrencies promise nothing, they carry no redemption."

-- what does this mean, in simple terms? If you had to explain that sentence to a grade-school kid, how would you do it?

My interpretation of "redemption" is that you get something back, right? If that's what you mean, then that's simply not true, that there is 'no redemption'.

While there are certainly plenty of scam digital currencies out there, specific to Bitcoin, I've purchased other digital currencies, and also converted my Bitcoin to cash, using Bitcoin. I've also used Bitcoin to make purchases. In other words, it was utilized -- in these examples -- as any other currency.

As I mentioned upthread:

Belligerent Savant » Sun Aug 14, 2022 3:55 pm wrote:
...are transactions, profits and loss 'real outcomes'? Because cryptocurrencies provide this, and more.


Of course, it can also be used as an investment option. Similar to days past when banks had decent/notable interest rates in consumer Savings accounts, and therefore by placing one's earned currency into a savings account that accrues decent interest, the total value of the account will rise, so too there is the potential -- albeit markedly more volatile -- to invest in Bitcoin and have good (and sometimes great) returns on the investment. As well as deep losses. Depending on initial buy-in and cash-out, as with any investment.

The current price of Bitcoin, and its trajectory over the last ~30 days:

Image

I've discussed at length my reservations with digital currencies, especially centralized currency/CBDCs (and related social credit/digital ID/smart contract implementations as means for social control, etc), but Bitcoin -- while it remains possible it's been an intel op from the onset, and if so, the chance for 'good' is minimal/none -- has plenty of decentralized potential that can arguably act as effective counters to Empire's plans. Certainly more so than FIAT, unless "good guys" somehow take over the System (ha!).

But as more time passes I increase my tendency to believe the one option that has the greatest potential to avoid the grips of draconian probabilities of the future is purely analog: localized small-ish communities with agrarian/barter-type systems, sharing resources and labor.
User avatar
Belligerent Savant
 
Posts: 5214
Joined: Mon Oct 05, 2009 11:58 pm
Location: North Atlantic.
Blog: View Blog (0)

Re: BitCoin

Postby Elvis » Tue Jan 24, 2023 6:47 am

Belligerent Savant wrote:When you type, "Cryptocurrencies promise nothing, they carry no redemption."

-- what does this mean, in simple terms?

The issuer promises to accept back its liability to extinguish an obligation—namely the tax obligation, or obligation to repay a bank loan. In either case, the liability is created upon issue and destroyed upon redemption.

As I said, bitcoin does none of this. It has no mechanism for universal adoption. It's just a digital "thing" priced in the states' unit of account.


Belligerent Savant wrote:Of course, it can also be used as an investment option. Similar to days past when banks had decent/notable interest rates in consumer Savings accounts

Bitcoin price is extremely volatile—hardly a reliable investment. Early adopters may enjoy the early gains of any Ponzi scheme.

Interest income begs the question of whether anyone is owed an income just for having money; my feeling is "no." Why would anyone expect a free income just for owning bitcoin?
“The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.” ― Joan Robinson
User avatar
Elvis
 
Posts: 7411
Joined: Fri Apr 11, 2008 7:24 pm
Blog: View Blog (0)

Re: BitCoin

Postby drstrangelove » Tue Jan 24, 2023 3:27 pm

yeah price stability is the big reason if you look past the glaringly obvious obstacle of currency needing to be based upon an authority people throughout an economy all recognize. hence the imprint of a monarch's effigy on gold or silver, instead of just the gold or silver itself.

i've also come to believe price stability, as opposed to currency reset via hyper inflation, could also be what is used as a mandate for the use of CBDC once the infrastructure is in place. jpow and the fatman at the bis have been putting quite an emphasis on price stability as of late

decentralized currency could be possible if we ever get a truly decentralized energy grid. though i suspect for this reason and many others that won't happen.
User avatar
drstrangelove
 
Posts: 981
Joined: Sat May 22, 2021 10:43 am
Blog: View Blog (0)

Re: BitCoin

Postby Elvis » Tue Jan 24, 2023 5:34 pm

drstrangelove wrote: jpow and the fatman at the bis have been putting quite an emphasis on price stability as of late

Newsflash: Price stability is at all times the central bankers' explicit legal mandate. It's their job.

Whether or not the Fed's tools & methods are the right ones for the job is certainly debatable, but price stability is always the Fed's responsibility mandated by law. So I don't see why anyone would be surprised by that emphasis least of all during an episode of inflation.

Greenspan explains:
That all of these claims on government are readily accepted reflects the fact that a government cannot become insolvent with respect to obligations in its own currency. A fiat money system, like the ones we have today, can produce such claims without limit. To be sure, if a central bank produces too many, inflation will inexorably rise as will interest rates, and economic activity will inevitably be constrained by the misallocation of resources induced by inflation. If it produces too few, the economy's expansion also will presumably be constrained by a shortage of the necessary lubricant for transactions. Authorities must struggle continuously to find the proper balance.




WRT private money systems, they never work; they invariably get overextended and bailed out by the sovereign. Highly recommend Felix Martin's book, Money: The Unauthorized Biography – From Coinage to Cryptocurrencies for details.
“The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.” ― Joan Robinson
User avatar
Elvis
 
Posts: 7411
Joined: Fri Apr 11, 2008 7:24 pm
Blog: View Blog (0)

Re: BitCoin

Postby DrEvil » Tue Jan 24, 2023 5:40 pm

Decentralization in general is a threat to the current power structures, and very much so when it comes to currency, which is the one thing the Bitbugs always ignore. They just assume everyone will eventually start using it and libertarian techbro Nirvana will commence. What will really happen is the second it becomes an actual threat it will be utterly destroyed or co-opted into the prevailing structures and become just another currency with none of the supposed benefits and all the downsides.
"I only read American. I want my fantasy pure." - Dave
User avatar
DrEvil
 
Posts: 3971
Joined: Mon Mar 22, 2010 1:37 pm
Blog: View Blog (0)

"The Fair Price of a Bitcoin is Zero"

Postby Elvis » Tue Jan 24, 2023 10:09 pm

FWIW...sorry about the algebra :starz:

...
Monetary instruments are financial instruments. Like all financial instruments, monetary instruments have an issuer who promises to do something in the future. There are one or two common promises embedded in monetary instruments. One is that they are convertible into something else, another is that the issuer will accept them as final means of payment from his debtors. Bank accounts contain both promises (conversion into cash on demand, and one can pay debts due to banks by using funds in a bank account). Federal Reserve notes currently only contain one promise, the government will take them in payment at anytime (either directly or through the banking system in case tractability and security of payments are required). Some Federal Reserve notes were convertible into gold coins in the past. Gold coins are also monetary instruments that contain only one promise, that of being accepted back by the issuer to settle debts due to him (usually a government). Gold coins have an extra feature, they are collateralized by the value of the gold content. Note that the gold content of the coin is not a monetary instrument, and it is not what makes the coin a monetary instrument. Gold bullions were never financial instruments (they contain no promise), they are real assets, i.e. commodities (payments made with them are payments in-kind).

Given the nature of monetary instruments, they have also other characteristics common to all financial instruments. First, all financial instruments are accounting creatures. They are the asset of the bearer and the liability of the issuer. Gold coins were the liability of, e.g., the King, Federal Reserve notes are liability of the Federal Reserve, and coins are the liability of the Treasury. Currency is their liability because they (at least) promise to take their currency from bearers in payments at any time; issuers owe that to the bearers. That is partly how their scarcity is controlled. Second, all financial instruments have a fair value that is defined as the discount value of future streams of monetary payments.

bitcoin valu.png

Where the subscript t indicates the present time, Pt is the current fair value, Yn is the income at a future time n, FVN is the face value that will prevail at maturity, Et indicates current expectations about income and face value, dt is the current discount rate imposed by bearers, N is the time lapse until maturity (n = 0 is the issuance time). There is a wide variety of financial instruments using that formula. On one extreme are modern monetary instruments that, provide no income (Y = 0), have an instantaneous maturity (N = 0), and are widely expected to be taken back by their issuers at their initial face value at any time, Pt = FV0. On the other extreme are stocks and consols that have a positive expected income and an infinite maturity, Pt = Et(Y)/dt.

Given that bitcoins are supposed to be monetary instruments, they must follow the preceding basic rules of finance. We clearly know who the bearers are (the lucky Easter egg hunters and the persons to whom they get sold) but who is the issuer? In other words who put the eggs in the forest and is willing to accept them in payments due to him or her. I can tell you the answer for Easter eggs: none of the persons who put them in the forest promised to accept them in payments. Therefore, they are not a liability, therefore they are not a financial asset, and therefore, they are not monetary instruments. They are real assets, commodities. The same applies to bitcoins. [...]

We just established that bitcoins are not financial instrument, but let us, for the sake of argument, continue to assume that they are. This means that they must have a fair value. Now what is the fair value of a bitcoin? It does not provide any income (Y = 0), it has no maturity given that it is not a financial instrument. For the sake of argument, we might assume that their maturity is infinite because we are stuck with them forever once they are created. So their fair value as financial instrument is…A BIG FAT ZERO (you can use whatever unit of account you want). A BTC 1 coin should circulate at a 100% discount (BTC 0) if it was a monetary instrument, which means of course that it would not pass hands.


from: The Fair Price of a Bitcoin is Zero
You do not have the required permissions to view the files attached to this post.
“The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.” ― Joan Robinson
User avatar
Elvis
 
Posts: 7411
Joined: Fri Apr 11, 2008 7:24 pm
Blog: View Blog (0)

Re: BitCoin

Postby Elvis » Tue Jan 24, 2023 10:45 pm

https://theconversation.com/one-year-on ... ure-190229

One year on, El Salvador’s Bitcoin experiment has proven a spectacular failure
Published: September 11, 2022

A year ago, El Salvador became the first country to make Bitcoin legal tender – alongside the US dollar, which the Central American country adopted in 2001 to replace its own currency, the colón.

President Nayib Bukele, a cryptocurrency enthusiast, promoted the initiative as one that would deliver multiple economic benefits.

Making Bitcoin legal tender, he said, would attract foreign investment, generate jobs and help “push humanity at least a tiny bit into the right direction”.

His ambitions extended to building an entire “Bitcoin city” – a tax-free haven funded by issuing US$1 billion in government bonds. The plan was to spend half the bond revenue on the city, and the other half on buying Bitcoin, with assumed profits then being used to repay the bondholders.

Now, a year on, there’s more than enough evidence to conclude Bukele – who has also called himself “the world’s coolest dictator” in response to criticisms of his creeping authoritarianism – had no idea what he was doing.

This bold financial experiment has proven to be an almost complete failure.


Making Bitcoin legal tender

Making Bitcoin legal tender meant much more than allowing Bitcoin to be used for transactions. That was already possible, as it is in most (but far from all) countries.

If a Salvadoran wanted to pay for something in bitcoins, and the recipient was willing to accept them, they could.

But Bukele wanted more. Making bitcoins legal tender meant a payee had to accept them. As the 2021 legislation stated, “every economic agent must accept Bitcoin as payment when offered to him by whoever acquires a good or service”.

Read more: Can Bitcoin be a real currency? What's wrong with El Salvador's plan

To encourage Bitcoin uptake, the government created an app called “Chivo Wallet” (“chivo” is slang for “cool”) to trade bitcoins for dollars without transaction fees. It also came preloaded with US$30 as a bonus (the median weekly income is about US$360).

Yet despite the law and these incentives, Bitcoin has not been embraced.


Greeted with little enthusiasm

A nationally representative survey of 1,800 Salvadoran households in February indicated just 20% of the population was using Chivo Wallet for Bitcoin transactions. More than double that number downloaded the app, but only to claim the US$30.

Among respondents who identified as business owners, just 20% said they were accepting bitcoins as payment. These were typically large companies (among the top 10% of companies by size).

Business acceptance of Bitcoin in El Salvador
Image

A survey for the El Salvador Chamber of Commerce in March found only 14% of businesses were transacting using Bitcoin.


Making huge losses

Fortunately for Salvadorans, nothing has come of the US$1 billion Bitcoin bonds scheme. But the Bukele government has still spent more than US$100 million buying bitcoins – which are now worth less than US$50 million.

When Bukele announced his plans in July 2021, Bitcoin’s value was about US$35,000. By the time the legislation came into effect, on September 7 2021, it was about US$45,000. Two months later, it peaked at US$64,400.

Now it is trading at around US$20,000.

Bukele has made self-congratulatory tweets about “buying the dip” but almost all the bitcoins bought by the government have been for more than US$30,000, at an average price of more than US$40,000.

A year ago, Bukele was urging his citizens to hold their money in bitcoins. For anyone who did, the losses would be devastating.


Flawed analyses

Bukele’s misunderstanding of Bitcoin – and economics more generally – has been demonstrated repeatedly.

In June 2021 he tweeted: “Bitcoin has a market cap of US$680 billion. If 1% of it is invested in El Salvador, that would increase our GDP by 25%.”

This suggests he seemed to think Bitcoin was some sort of investment fund. It also showed he did not understand GDP. Foreign investment is not a component of GDP. There has been no surge in foreign investment nor GDP.

In a January 2022 tweet he argued a “gigantic price increase is just a matter of time” because there will only ever be 21 million bitcoins while there are 50 million millionaires in the world. “Imagine when each one of them decides they should own at least ONE #Bitcoin,” he proclaimed. Bitcoin’s value has since halved.


The rest of the world is not impressed

The Bitcoin plan has adversely affected El Salvador’s credit rating and relations with the International Monetary Fund. With investors more wary of lending to the country, local borrowers have had to offer higher interest rates.

In January the IMF urged El Salvador to reverse Bitcoin’s legal lender status because of the “large risks for financial and market integrity, financial stability and consumer protection”. Bitcoin is notorious for its use in scams and other illegal activities, as well as its volatility.

Bukele tweeted a dismissive response involving a Simpsons-themed meme.

This seems particularly rash, given El Salvador has been seeking a loan of more than $1 billion from the IMF.

International credit rating agencies Fitch has downgraded El Salvador’s credit rating this year, citing concerns about its Bitcoin policies.

Read more: Cryptocurrencies are great for gambling – but lousy at liberating our money from big central banks

No other country with its own currency, not even ones such as Zimbabwe and Venezuela with discredited currencies, has followed suit and made Bitcoin legal tender.

Given El Salvador’s record, it is is unikely any ever will.
“The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.” ― Joan Robinson
User avatar
Elvis
 
Posts: 7411
Joined: Fri Apr 11, 2008 7:24 pm
Blog: View Blog (0)

Re: BitCoin

Postby Belligerent Savant » Tue Jan 24, 2023 10:52 pm

Elvis » Tue Jan 24, 2023 5:47 am wrote:
Belligerent Savant wrote:When you type, "Cryptocurrencies promise nothing, they carry no redemption."

-- what does this mean, in simple terms?

The issuer promises to accept back its liability to extinguish an obligation—namely the tax obligation, or obligation to repay a bank loan. In either case, the liability is created upon issue and destroyed upon redemption.

As I said, bitcoin does none of this. It has no mechanism for universal adoption. It's just a digital "thing" priced in the states' unit of account.


Belligerent Savant wrote:Of course, it can also be used as an investment option. Similar to days past when banks had decent/notable interest rates in consumer Savings accounts

Bitcoin price is extremely volatile—hardly a reliable investment. Early adopters may enjoy the early gains of any Ponzi scheme.

Interest income begs the question of whether anyone is owed an income just for having money; my feeling is "no." Why would anyone expect a free income just for owning bitcoin?


This is clearly wonky topic for you, but I remain unclear on how you can be certain of your position on this. How does Bitcoin have no mechanism for universal adoption if it's already adopted worldwide by institutions, governments, and individuals? Regulatory frameworks are currently underway. How is this NOT adoption? Bitcoin is less volatile, relatively speaking, than it has been prior to ~2020. In any event, a person that invested in Bitcoin in 2017, when Bitcoin was at about $3K per coin, would be at a considerable profit margin right now, despite the volatility over the last several years (this applies even moreso to anyone that invested prior to 2017).

The dollar -- and other FIAT currencies -- have arguably been quite volatile as well over the same timespan.

You typed:
Interest income begs the question of whether anyone is owed an income just for having money; my feeling is "no." Why would anyone expect a free income just for owning bitcoin?

Interest is one of the key mechanisms for most loans, historically, for FIAT currencies, needless to say. Why shouldn't an individual benefit as a bank does?
This notion of applying a negative connotation towards accruing interest is perplexing to me.
Last edited by Belligerent Savant on Tue Jan 24, 2023 11:03 pm, edited 1 time in total.
User avatar
Belligerent Savant
 
Posts: 5214
Joined: Mon Oct 05, 2009 11:58 pm
Location: North Atlantic.
Blog: View Blog (0)

Re: BitCoin

Postby Elvis » Tue Jan 24, 2023 10:58 pm

bitcoin fixes el salvador.jpg
You do not have the required permissions to view the files attached to this post.
“The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.” ― Joan Robinson
User avatar
Elvis
 
Posts: 7411
Joined: Fri Apr 11, 2008 7:24 pm
Blog: View Blog (0)

Re: BitCoin

Postby Belligerent Savant » Tue Jan 24, 2023 10:59 pm

DrEvil » Tue Jan 24, 2023 4:40 pm wrote:Decentralization in general is a threat to the current power structures, and very much so when it comes to currency, which is the one thing the Bitbugs always ignore. They just assume everyone will eventually start using it and libertarian techbro Nirvana will commence. What will really happen is the second it becomes an actual threat it will be utterly destroyed or co-opted into the prevailing structures and become just another currency with none of the supposed benefits and all the downsides.


Extracting snippets from the above:

Decentralization in general is a threat to the current power structures, and very much so when it comes to currency, which is the one thing the Bitbugs always ignore.


What's a "Bitbug"? If you mean a proponent of Bitcoin, then you're largely incorrect. To the contrary, they are acutely aware of the State's opposition to decentralization. It's one of the core reasons many adopt Bitcoin as a concept, minimally. Where did you get this notion of yours? It has no bearing on the sentiment of those interested in this space.

They just assume everyone will eventually start using it and libertarian techbro Nirvana will commence.

This is really little more than a broad brush over-generalization and misrepresentation. You are ascribing what may apply to a minority to an entire class of individuals that encompass myriad politics, forms and amount of income, and philosophies on money, government, and way of life.

If one doesn't have first-hand, extended exposure into the factors and individuals involved in this space, generalizations like the above may be a common misconception.

[removed unnecessary editorial]
Last edited by Belligerent Savant on Tue Jan 24, 2023 11:22 pm, edited 2 times in total.
User avatar
Belligerent Savant
 
Posts: 5214
Joined: Mon Oct 05, 2009 11:58 pm
Location: North Atlantic.
Blog: View Blog (0)

PreviousNext

Return to General Discussion

Who is online

Users browsing this forum: No registered users and 27 guests