Anyone else here into Bitcoin?

Discussion in 'Random Thoughts' started by Bloom, Sep 14, 2019.

  1. Bloom

    Bloom MOT: Bloom Audio

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    I've been going deep down the Bitcoin rabbit hole for about 2 years now. Aside from audio (which is my job too), reading about and listening to Bitcoin podcasts is easily where I spend most of my free time. I'm extremely bullish. Anyone else here into it?
     
  2. elmoe

    elmoe Friend

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    I'm not anymore but back when it started over 15 years ago I was actively farming. I sold everything ~5 years ago and made out like a bandit.

    Now it fluctuates so much that I wouldn't touch it, but if you're careful and stay on top of the market I have no doubt it can be hell of rewarding.
     
  3. Zhanming057

    Zhanming057 Friend

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    There's no evidence in favor of or against bullishness. The coins have no inherent value beyond energy costs. Historically prices have collapsed from four to two digits in a matter of hours.

    I was a part of a few policy focus groups on bitcoin and I know some of the big pump and dumpers operating out of China. I would not invest more than what I can't afford to lose.
     
  4. crenca

    crenca Friend

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    I don't get it either. As a "currency" it is a historical novelty I think. I understand the Hudson Bay and British East India companies created their own currency, and bitcoin appears to be this kind of novel situation. How long will real states and pseudo-states (such as the EU) tolerate anything other than extremely minor competition to their currency and (most importantly) tax structures? Short of somehow obtaining real land, people, armies, taxmen and jails what chance does a pseudo-currency have in the long run?

    Speculation however is certainly a way to make real money. Why is Tesla valued like it is? Why do people pay 4 or more figures for "audiophile" digital cables and grounding boxes? Why do fools fall in love?
     
  5. Merrick

    Merrick A lidless ear

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    I found out about it too late, people were already setting up dedicated GPUs just to farm, it wasn’t worth it to try and get into it. I remember reading that the energy costs it would take to farm on a regular computer would outweigh whatever meager amount you were able to get.

    As far as trading, I loathe financial speculating.
     
  6. Bloom

    Bloom MOT: Bloom Audio

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  7. Zhanming057

    Zhanming057 Friend

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    This analysis is flawed for several reasons. Here's a quick rundown of the problems with his argument:

    1. He's right that fiat money isn't fundamentally backed by anything physical. But countries have sovereignty. They have tanks and fighter jets and are capable of defending their citizens and their economic system. If someone tries to disrupt the dollar system, they can arrest you or carpet bomb you, and if someone tries to refuse the dollar (cash vs. cards not withstanding) as a method of payment, you can sue them and have your day in court. If your financial institution robbed your savings account, the FDIC will have a field day and you will, after some time, get your money back. You might not like it, but that's just how it works. Bitcoin has nothing backing it aside from energy costs and speculation. The ledger is meaningless as an actual guarantee of value. It's just a bunch of numbers.

    2. Trust is not so valuable as to resort to a painfully slow, tremendously inefficient payment method. Are people concerned with taking Paypal or Venmo or bank wire when they sell their headphones? Are you worried personally that your checking account might be cleared out? We don't need trustlessness because in a practical sense, trust is a solved problem. Unless you want to move drug money, there are a hundred ways of moving, storing and investing your money that doesn't involve hours for transactions to clear, hyper-fluctuating values, and the non-trivial likelihood of theft.

    3. Regardless of what advancements are promised, there is simply no way to meet energy demands for bitcoin if it were to become a global payment system. Every bitcoin transaction is something like a million times more computationally-complex than a bank payment. You can map whatever number to the total number of bitcoins that you want - but at the end of the day, real financial transactions are cheap, fast and simple, and most people are 100% happy with that system.

    I was very early to the bitcoin scene and still owns a bit of it (mostly for buying things with a crypto discount). But these days the institutional traders are not bullish, and the people with real mining power behind them are committed not to persistent growth in value but to pump and dump strategies where engineering crashes are integral to their profits. I don't see how any good could come out of that.
     
  8. penguins

    penguins Friend, formerly known as fp627

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    Was into back when it first came out and it was <$1 per coin for many reasons, from political to personal to a small degree lack of understanding / knowledge in the world financial system.

    Why I was kind of into it:
    Biggest issue with most central currencies was the fact that fiat money isn't backed by or pegged to anything and people could just print money. It's too arbitrary. As a matter of fact, I still don't fundamentally understand why money (or copper, nickel, gold, platinum, etc.) has any fundamental intrinsic value (I get metals can at least be used for things). No I'm not a communist or socialist. I also don't like the controls on money (ex in the US get flagged if you withdraw over $10k cash, hard to move money between countries in an anon manner, it's all in a computer and theoretically someone could just waltz in and shut your stuff down, etc). Also don't like how it's not really anonymous anymore, etc. (in before penguin avatar guy is 3rd world slum lord, drug traffics, and money laundrys with tide pods).

    Why I never got that into it:
    However, after boiling it down as I got older, more understanding of financial systems and models, economies, taxes, etc., the biggest problem with bitcoin or really anything similiar is that with bitcoin, while the supply is actually limited in this case, it isn't really fundamentally "anything" either. It's not fundamentally different than you comping up with a fixed ledger of 1M "Bloom Dollars" and declaring that they have value. It's just as arbitrary as fiat money.
    There is also the practical issue that IMO it was too easy to mine at first and too unevenly distributed for practical use by a large % of the world's population - there just isn't "enough" of it to really "go around". Lastly, for those who liked BTC from a "but my gubbamints will collapse" standpoint - well, money that only exists in an electronic financial ledger that exists on tons of computers that run off a largely central network of ISPs is going to collapse as fast as any gubbamin will in a SHTF scenario. Really it only solves the anonymity issue, and even then BTC can be traced with enough effort. That and what Zhanming says - I can't pay the IRS every year in BTC. I can refuse, I can have a day in court, I could ask even cite the borderline conspiracy quotes, videos, sources, etc. that say IRS is unconstitutional and there isn't actually anything that says we have to pay a central income tax, but guaranteed they will kick my ass and put me prison so... If this weren't the case, people much richer and more powerful than me would have found a direct way to do it already *keyword direct*.

    My only mistake was not getting more at the beginning and selling it when it broke the $10k barrier. To this day I'm still amazed it ever got past $100/per.

    With all of this being said, the fundamental issues with our world currencies now, unlimited fiat printing, exploitative financial systems, etc. still all exist and IMO things like bitcoin are symptoms of the issue, not solutions. Until these issues get solved we are going to continue to see all kinds of symptoms arise ranging from alternative sources of wealth (like btc) and things like social upheaval, etc etc etc that one can see anywhere in the news now days. But that is all a different conversation that I don't want to have on SBAF and would probably be in violation of the "try to avoid politics guideline" here as well.
     
    Last edited: Sep 16, 2019
  9. Bloom

    Bloom MOT: Bloom Audio

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    Haha...this thread definitely didn't go as I thought it would. Earned my first dislikes. :D

    Great thoughts, Zhanming057 and fp627. I want to think through a good response, but can't do so at the moment. But those posts are the kind of great discussion I love having about Bitcoin.
     
  10. Andrewfhunt

    Andrewfhunt New

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    Everyone is watching Bitcoin, but has anyone seen ETH rise this month? I think it's likely that Eth will gain more ground ahead of Bitcoin and become the second strong cryptocurrency and high value that many people will ask and used for. I'm wondering to what value Bitcoin will actually get, and whether the statistics will be real or not. This cryptocurrency market is very volatile, and it's risky. I personally tried to buy several cryptocurrencies on [Mod Edit: Link Removed] and there's already an extra $ 200 within a few weeks, all thanks to Eth and dogecoin))
     
    Last edited by a moderator: May 16, 2021
  11. StandUp713

    StandUp713 Friend

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    The real deal is with the Chia hard drive spinners! Hash rate is SOOOO last week.
     
  12. Drifterxny

    Drifterxny Friend

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    Likely a scam post and link, please delete
     
  13. Metro

    Metro Friend

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  14. OJneg

    OJneg The Most Insufferable

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    I find it very amusing to see people express their opinions oh-so-confidently about topics that they obviously don't understand in the least.

    For the record, the bitcoin exchange rate was around $10,000/1BTC in Sept 2019.
     
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  15. penguins

    penguins Friend, formerly known as fp627

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    And what is your take on it all?
     
  16. OJneg

    OJneg The Most Insufferable

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    It's hard to explain the economics or mechanics of BTC when talking to otherwise intelligent people (more knowledge = more baggage and preconceived notions), so let's try this:

    As of Sept 2019 you seemed to think that $10k was not a good price to buy into BTC going forward. Assuming you don't have assets that are growing better than 500% in 2 years, what BTC price would a broker need to promise you in 2 years to make you buy now?

    I think you already understand where I am going, and it also sounds like you have an inkling as to the causes. So maybe you have other reasons to be skeptical? Or maybe you could explain why you think BTC is a symptom of the financial institutions and not the solution.
     
  17. wormcycle

    wormcycle Friend

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    Almost everyone here described bitcoin as a currency which it is not. It is not and should never become a payment method. For the purpose of taxations it is counted as commodity, the same way as gold, Which I think is smart and forward looking. because that's exactly the position of bitcoin may one day occupy in the layered money system. We are years if not tens of years from this moment. To understand why BTC is uniquely positioned for that is not obvious, it was not obvious for me.

    The book https://www.amazon.com/Layered-Money-Dollars-Bitcoin-Currencies-ebook/dp/B08PS293NT is a great introduction to understanding the bitcoin position.

    The idea of buying coffee using bitcoin, entertained by some economy professors at Columbia, as a proof that bitcoin cannot work, is not smarter than the idea of buying a pizza with gold nuggets.
    Precisely because:
    . That is correct and that's why the example of first bitcoin based currency is Lighting network. Contracts that created and settled out of blockchain can be as fast and are as fast as Visa transactions with the same amount of energy.

    Now the question of trust: it is not about trust in my next transaction on Paypal, I want to buy and sell in $CAD or $US, with Visa or Paypal even if or when bitcoin would become ever the final settlement instrument. And, irrespective if Columbia professors understand it or not, bitcoin and Lighting developers understand it very well. The proper money for wide circulation should and probably will always originate originate from the banks balance sheets. But if your trust in using fiat currency for simple transactions extends to storing wealth in fiat, well good luck.

    That is just a tip of the iceberg in terms of getting into bitcoin, the book I mentioned is short very well written.
    And by the way that is entirely independent from bitcoin as a investment, short or long term.
    That's a bit different knowledge.
     
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  18. crenca

    crenca Friend

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    This is actually a useful description - it's a kind of Gnostic currency. In reality it's a "commodity" only in the sense of perceived value (so more fiat than fiat currency), unlike bacon and beer, which can actually fill your tummy.
    :pirate07:
     
  19. purr1n

    purr1n Desire for betterer is endless.

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    Musk suddenly says Tesla will not take bitcoin for the time being, supposedly because of their mining by thousands and thousands of RTX 3060s being powered by coal burning power plants in China. Very bad for environment.

    Or maybe Musk doesn't want to accept currency which he ran up and thinks the value will go down. Probably not a good time right now for speculating.

    Will wait until Musk tells me the day before he will buy another billion Bitcoin, or when Barra tells me in advance that GM will accept it.
     
  20. penguins

    penguins Friend, formerly known as fp627

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    Completely agree with point 1 and I suspect we've all seen it happen too much. If I come of as "knowing it all" above, it wasn't supposed to sound that way - I tried to make it sound like I was only voicing a not that entrenched opinion and why I feel that way but maybe it didn't come through right. I also bet against my own opinion and did get back on the train but more as a small scale / small time trader at one point in the last 1.5 years FWIW, not too long after I made the post actually (although I will admit a lot of it is b/c it was in a very obvious bull market).

    Will blather about some of why I think it's a symptom and not a cure later on when I don't have a headache "if anyone even cares later".

    I will also admit that yes, maybe I wrongly looked at it as a form of currency or a "valuable" commodity (such as precious metal). Not sure if I view it as a "gold alternative" but I can already think of so many arguments against this.

    Also, I know it's still many years out, but I do think it will happen sometime before I retire - what happens to existing cryptos when quantum computing becomes more wide spread?
     

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