Bitcoin and crypto currencies

Off_Field wrote:

Only a certain amount is protected by a bank.

Sure: But these 100k EUR in the EU, or 85k GBP in UK (guess it’s still the same post Brexit) or 250k USD in the US is more than sufficient for the vast majority of customers. Plus it is per bank so even if you have more than that on current accounts you can split amongst different banks to have the protection on each bank. Therefore …
Off_Field wrote:

How do you feel about bank “bail in”s ?

… extremely good! Compared to the hyperinflation we have seen in btc in the last months that theoretical (at least if you deal with EU banks) risk is completely negligible. Between April 13th and May 22nd (that is just 40 days) btc has seen a more than 40% crash of its value (compared to gold) – that is an inflation rate we have never seen in the US (as far as I know) and not seen in Europe since the war or very briefly thereafter. Venezuela comes to mind.
The only reason why this has not send shockwaves is, that too few people take btc seriously…

Off_Field wrote:

To be honest, I don’t really see why you would particularly want to change btc into fiat unless the person / company that you were intending to purchase from wouldn’t accept btc.

Because almost nobody accept btc. You simply have to.

Off_Field wrote:

equally if you do small amounts and take it out it’s an acceptable risk to me. It’s also possible a bank could go bust and you would lose your money.

You are contradicting yourself: As long as you define “small amount” as “being less than 100.000 EUR”, the risk at a traditional bank in the EU is exactly zero – it is not small and acceptable, it is non existent. Would you really transfer 100.000 EUR to a btc exchange because the risk is small?

Off_Field wrote:

using the lightning network without needing to change to dollars.

Once again: Lighning network is not bitcoin. It is a wire transfer network run by completely unregulated financial institutions that basically combines the disadvantages of bitcoin and traditional banking.
For that specific application it is basically a rich kids toy as (and you know that) you need to lock all the funds you want to use in transactions to one specific counterpart for the entire duration. So if you want to pay your next aircraft repair through “the lighting network” and really want to use the claimed benefits, first step is that you put the maximum amount possible for such a repair in a multi signed wallet – so in real money it would be that before the repair even starts you would give the maximum possible price to an escrow. And only after the repair the escrow gives you back the money that is not needed for the repair.
You need to be quite wealthy to be able to afford this with all your daily purchases…

And by the way: How much payment volume has really been done in bitcoin in bitcoin beach – it’s quite clear that poor people in El Salvador accept donation in anything, but the organizers are pretty “sparse” in communicating how much it is really used beyond receiving donations…

Malibuflyer wrote:

Compared to the hyperinflation we have seen in btc in the last months that theoretical (at least if you deal with EU banks) risk is completely negligible. Between April 13th and May 22nd (that is just 40 days) btc

Your arguments are extremely weak and disingenuous when you’re cherrypicking dates so blatanly. We know the inflation rate of bitcoin presently with the block production rate is about 1.7%

If you think the value of bitcoin is going down over the long term, then that’s a perfectly fine view to take. We don’t know the future. Historically though this hasn’t been the case.

Malibuflyer wrote:

You are contradicting yoursel

I’m not, I’m pointing out the use of the exchange to procure the btc then you transfer it out to your own wallet for security, . So you are not leaving money on the exchange unlike the case for the bank you are making.

I don’t know the payment volume for bitcoin beach and over the lightning network I don’t believe we will. I did read though that Strike are onboarding people at around 20k a day in the country. So we shall see. If it helps reduce bank fees for those outside of the country wanting to send money home it seems to me like an extremely good thing for the people of a relatively poor country.

Malibuflyer wrote:

because only criminals accept it as payment

Actually, the Thirsty Pigeon (pub) in Douglas accepted BTC for a while (I don’t know if it still does, because I’ve not been there in some time).

(I suspect this is past tense – BTC is simply too volatile today compared to GBP to use as a currency for the payment of a couple of pints of beer).

Off_Field wrote:

We know the inflation rate of bitcoin presently with the block production rate is about 1.7%

That is a complete misunderstanding (or perhaps just misrepresentation) of monetary markets if one claims that the inflation is the block production rate.

If we look at currencies, one could easily see that while those 2 indicators have some connection, it is far from simple to describe or even predict their relation: Let’s take the Eurozone as an example. In the last twenty years we have on average seen a core inflation of about 2% p.a. (actually actively managed by the ECB to get to this number) but an M3 increase of more like 6% in most times. But not in all – there have been also times where the M3 increase has actually been smaller than inflation.

Off_Field wrote:

Your arguments are extremely weak and disingenuous when you’re cherrypicking dates so blatanly. …
If you think the value of bitcoin is going down over the long term, then that’s a perfectly fine view to take. We don’t know the future. Historically though this hasn’t been the case.

I’m not cherrypicking dates and I’m not looking into the future. All I can comment on is the past. And the past is of the btc has shown that due to its volatility it doesn’t qualify as currency – exactly as Nassim explained it. It is not suitable for short term value transactions (as it takes too long and is too costly) and it is not suitable for even short term value storage. If we are not talking about a rich kids world, it is simply not suitable for an ordinary worker if they receive their monthly wage on the 20ieth that they don’t know if it will be 10% more or less at the 1st of next month when they have to pay the rent to the landlord.

(Full disclosure: My total holdings of bitcoin is significantly less than 0.01% of my total disposable assets and I do not hold any short positions in BTC. Neither am I invested in the bitcoin industry or other competing tokens. Therefore I have no measurable own financial gain or loss by telling good or bad stories about bitcoin.
I believe it’s fair that in a discussion on tradable assets everybody openly discloses on what change rate development they have a vested interest or not).

Malibuflyer wrote:

That is a complete misunderstanding (or perhaps just misrepresentation) of monetary markets if one claims that the inflation is the block production rate.

Inflation can be described as the rate at which new currency is created. that is what the 1.7% figure represents. DMalibuflyer wrote:

I’m not cherrypicking dates

OK then, let’s just look at the last year to date. Price today ~$34k. Price june last year ~$9k . Hardly hyperinflation of bitcoin which you try to imply with your carefully selected date window.

Malibuflyer wrote:

an ordinary worker if they receive their monthly wage on the 20ieth that they don’t know if it will be 10% more or less at the 1st of next month when they have to pay the rent to the landlord.

1 satoshi is still 1 satoshi. 1BTC is still 1BTC, if you receive your wage in BTC, pay your rent in BTC , etc then what does the fiat value matter?

I don’t see the point in bouncing it in and out of fiat.

I like the technology and I hold some bitcoin, it’s not a large amount. I’ve absolutely no issue with recognising genuine issues with crypto, but do think that a lot of incorrect FUD is flying around.

Off_Field wrote:

an be described as the rate at which new currency is created

Yes, and I can describe a whale as a fish, it leads to a correct result (it lives in water) but is not quite correct…

Described correctly, Bitcoin is inherently deflationary. The rate of creation is less than long term economic growth.

The transition to Bitcoin is also massively deflationary. If it were to replace the USD (there are several cryptocurrencies, so it won’t take over everything) it has to replace around 20 trillion USD, which means one Bitcoin would have the purchasing power of around 1 million, all other things being equal.

That would make one Satoshi worth around 1 US cent, BTW. Coincidence?

Off_Field wrote:

1 satoshi is still 1 satoshi. 1BTC is still 1BTC, if you receive your wage in BTC, pay your rent in BTC , etc then what does the fiat value matter?

As soon as I can get an employment contract in BTC or rental agreement in BTC, sure. Got one?

Off_Field wrote:

Inflation can be described as the rate at which new currency is created. that is what the 1.7% figure represents.

According to which definition? Nobody in economy uses the term “inflation” in this sense. In economy inflation is always linked to the price level.

But I understand your point: There has not been a Black Thursday 1929, no Black Monday 1987 or any similar stock exchange crash. As no new stocks have been printed on these days at all it is simply impossible that they loose value. One GM share was one GM share before and after that Monday so nothing happened.

But please don’t tell me but the people who lost their pension: “There is no problem at all – the only challenge is that you can not pay your rent with GM shares – but this is not the fault of the stock market”

Off_Field wrote:

OK then, let’s just look at the last year to date. Price today ~$34k. Price june last year ~$9k .

My point is: it doesn’t matter if it goes up or down – the volatility itself is the problem. And btw: For currencies deflation in the middle to long run is a much bigger problem than inflation!

Off_Field wrote:

if you receive your wage in BTC, pay your rent in BTC , etc then what does the fiat value matter?

It’s just the very same thing as with tulip-bulbs: Yes, if we would receive our wage in tulip bulbs and had to pay our rent in tulip bulbs there would have never been a bubble bursting. It just doesn’t happen.

Cobalt wrote:

BTW. Coincidence?

I don’t think so.

Cobalt wrote:

Got one?

I would be prepared to offer a rental agreement in BTC

Cobalt wrote:

Coincidence?

Off_Field wrote:

I don’t think so.

In this case Off-Field must be absolutely right! It is so obvious that bitcoin is in fact a direct infusion from something this is much larger than god itself!

When Nakamoto invented the bitcoin in 2008 – and therefore defined that the number of Satohis is limited to 2 quadrillion, obviously M3 of the US was still about 8 trillion, valuing one final satoshi in your calculation at 0.2 US cent.

But obviously Nakamoto was bigger than all of us so he die know that exactly at this point in time we will have exactly this discussion and the US M3 is at 20 trillion – leading,without any kind of coincidence, to a satoshi valuation in the replacement scenario of 1 US cent.

Finally we know the true identity of Nakamoto: It can only be Chuck Norris!