Bitcoin, crypto generally, Central Banks Digital Currencies, System Resets, Wealth Preservation, controversies

[Erewhon888]

There was a suggestion that a distinct thread on this emerging debate might appeal to some and could be removed from consideration by those uninterested and who don't want to see the primary assets and economy thread derailed.

Here are two starting points for those interested. If no-one is interested, the thread will waste away in the usual fashion.

Raoul Pal's push on Bitcoin

Michael Saylor's arguments against gold and in favour of Bitcoin specifically rather than any other crypto

[reformed nice guy]

I think that there could be a bait and switch going on.

The (classic) value of crypto currencies is the "proof of work" procedure that goes on aka the mining. (There are some that dont use proof of work).

Ignoring any one person/org having control of >50% of the mining, it means that no one can interfere with it. There is a fixed amount, transactions cant be blocked or rolled back.

The bait and switch would be governments/central banks releasing something that is completely under their control and calling it a crypto currency, pretending that it has all of the benefits of crypto

[goldbug9999]

10 hours ago, reformed nice guy said:

The bait and switch would be governments/central banks releasing something that is completely under their control and calling it a crypto currency, pretending that it has all of the benefits of crypto

They can call it whatever they like, noone who wants a non debaseable censorship resistant currency is going to buy it.

[Harley]

Good thread idea if it can get beyond kids japping on only about Bitcoin.  You're probably going to lose long term if you start down there on the totem pole. 

Choosing an allocation across asset classes first is key.  And that begs a review of the validity of that approach.  Not that it's incorrect but I think we keep the diversity idea under constant review in terms of which classes still offer true diversification and the trends therein. 

I've been really challenged over asset allocation models, questioning their validity for today and tomorrow and looking for tweaks.  What are the true/future correlations?  So I have a "Hard Assets" class which is meant to go beyond PMs but what other assets?  Commodities?  Hard.  So buy the producers.  But isn't that equity?  But maybe I'm being a hostage to the finance system and should be thinking outside that system with woodlands, etc.  And what about bonds?  And so on. 

Regarding crypto versus PMs, you don't buy just the one equity share, so why do the same here?  Such religious silliness.   The real question, the harder one requiring some real thought so not one for the kids, is how much in relation to everything else?

Final thought, I focus on wealth preservation, everything else in the thread title are subordinate and just a series of examples.  Wealth preservation has many aspects, such as not investing like an idiot but then also preserving the wealth accumulated that way and that goes beyond pure £investing.

 

 

 

 

[Green Devil]

The biggest advantage of bitcoin as I see it is zero counterparty risk. Your coin is yours and your responsibility alone. Once we see banks going under and your funds in danger of confiscation, then the demand for a ZCR asset will increase. 

[Erewhon888]

1 hour ago, Harley said:

Good thread idea if it can get beyond kids japping on only about Bitcoin.  You're probably going to lose long term if you start down there on the totem pole. 

Choosing an allocation across asset classes first is key.  And that begs a review of the validity of that approach.  Not that it's incorrect but I think we keep the diversity idea under constant review in terms of which classes still offer true diversification and the trends therein. 

I've been really challenged over asset allocation models, questioning their validity for today and tomorrow and looking for tweaks.  What are the true/future correlations?  So I have a "Hard Assets" class which is meant to go beyond PMs but what other assets?  Commodities?  Hard.  So buy the producers.  But isn't that equity?  But maybe I'm being a hostage to the finance system and should be thinking outside that system with woodlands, etc.  And what about bonds?  And so on. 

Regarding crypto versus PMs, you don't buy just the one equity share, so why do the same here?  Such religious silliness.   The real question, the harder one requiring some real thought so not one for the kids, is how much in relation to everything else?

Final thought, I focus on wealth preservation, everything else in the thread title are subordinate and just a series of examples.  Wealth preservation has many aspects, such as not investing like an idiot but then also preserving the wealth accumulated that way and that goes beyond pure £investing.

 

 

 

 

Strongly agree with all these points and (as a long retired person) very interested in any findings you have on the key issues you mention. "Wealth preservation" wouldn't be as good clickbait  but hopefully will be the main focus of discussion.

[jamtomorrow]

1 hour ago, Green Devil said:

The biggest advantage of bitcoin as I see it is zero counterparty risk. Your coin is yours and your responsibility alone. Once we see banks going under and your funds in danger of confiscation, then the demand for a ZCR asset will increase. 

I don't see it as zero - the network is my counterparty. Which means I need to consider:

- entire internet goes down to sabotage/CME/EMP-war/political-backlash one day, and never comes back

- a single entity or cartel of entities corners the hash rate 

- I personally can't access the network for an extended period (authoritarian/censorship risk)

There are probably others. But at least two of these aren't close enough enough to zero to be considered "practically" or "almost" zero in my book.

All that said, BTC is still waaaay better than fiat or any CBDC they might come up with.

And BTC does have one distinct advantage over gold in my book: it can't be found during a search at a border, and it can't be confiscated.

So me, I'm a "why not both" kinda guy.

[sancho panza]

is there anywhere someone coulkd recoomend a really basic laymens expalanation of bitcoin,how its traded,held etc.

 

and when I say laymens,I mean laymens.

[reformed nice guy]

12 hours ago, goldbug9999 said:

They can call it whatever they like, noone who wants a non debaseable censorship resistant currency is going to buy it.

I agree but for the average man on the street there are plenty that might not understand the difference.

The final step would be that you have to pay your taxes using their new "Fedcoin", "DigitalPound" or whatever it is called

[goldbug9999]

19 minutes ago, reformed nice guy said:

I agree but for the average man on the street there are plenty that might not understand the difference.

The final step would be that you have to pay your taxes using their new "Fedcoin", "DigitalPound" or whatever it is called

If someone wants an inflation hedge they already understand the difference. If they dont then it doesnt matter as they were never going to be in the market for bitcoin in the first place.

Point is that we already have "DigitalPound" - what do you think credit cards and paypal (or even just a plain old bank account) are ?.

Meanwhile ... https://www.coindesk.com/uk-listed-firm-mode-putting-10-of-cash-reserves-into-bitcoin

Quote

Mode Global Holdings PLC, a London Stock Exchange-listed company, has announced plans to make a “significant purchase” of bitcoin as part of its treasury investment strategy.

 

Edited October 21, 2020 by goldbug9999

[goldbug9999]

Just to add ... calling a currency "digital" "virtual" or "crypto" is like calling a drug oral or intravenous - its just the delivery mechanism. Noone is buying bitcoin just because it is digital/virtual/crypto, these are necessary but not defining characteristics. The defining characteristic is the lack of control vested in any one entity, something that is inherently impossible for a bank or government to replicate.

The BoE IMF Fed etc can blabber on about creating cypto currency all they like (and have been doing for many years now) , noone cares. Its like farmers trying to sell "a nutritious substitute for your vegetarian sausage using real meat", it completely missed the point.

Edited October 21, 2020 by goldbug9999

[Erewhon888]

Two enthusiasts/evangelists - Raoul Pal and Mike Saylor

Now outside the Realvision paywall.

[jamtomorrow]

19 hours ago, sancho panza said:

is there anywhere someone coulkd recoomend a really basic laymens expalanation of bitcoin,how its traded,held etc.

 

and when I say laymens,I mean laymens.

I hesitated to reply @sancho panzabecause I'm not layman enough to offer the right perspective, but FWIW I'd tackle it by peeling the onion if I was a layman i.e. learn *just* enough to try using it.

And by "using it" I mean pushing your own transactions through the network - that will force you to learn about addresses (and their public/private keys), transaction pricing, validation, and an app or two.

You don't need to put much at stake to do it like this - just make sure you're playing with, say, a good chunk more than current transaction costs. £30 is probably plenty for now.

At this stage I wouldn't worry about how the blockchain works - that can come later once you've got some usage under your belt and thoughts turn to putting up a more significant stake.

Concrete steps for this plan:

- sign up for Coinbase and buy some BTC : this is probably the easiest way to get into BTC from fiat. *But* the exchange holds purchased BTC on your behalf, they're not yours until you send them to an address you control. So ...

- ... get Electrum on your phone, create a wallet. Then back in Coinbase send BTC to an address generated from your wallet; then back in Electrum watch it arrive and go through validation; then try sending it back to Coinbase, or to a mate etc etc

Electrum is arguably more stripped down and "hardcore" than other wallet software, but that's a good thing - it lets you "see" some of the inner workings.

You *definitely* need to generally understand public/private key cryptography for this part to understand what an "address" is. Other than that, I'd just play.

Things that can definitely wait until later: what a wallet is (it's just an address generator); what mempool is; how transaction pricing works; what is proof of work; what is hashrate; why the blockchain can be trusted; what is a node; what is mining; what is a full node; what is "unspent transaction output"; how do I secure/backup my wallet; what is BIP39; should I use Trezor or Ledger

 

[Green Devil]

On 21/10/2020 at 10:59, sancho panza said:

is there anywhere someone coulkd recoomend a really basic laymens expalanation of bitcoin,how its traded,held etc.

 

and when I say laymens,I mean laymens.

Send £50 to coinbase and buy some. It's easy peasy. That'll get you 1 whole litecoin 😁 after you've bought it you can research wallets and take it out to you wallet just by withdrawing like a bank. Simples. 

[Errol]

I personally have no issue with Bitcoin and can see at least in some way how it can be useful.

However, I don't think it is a competitor for gold or even in the same asset class section as gold. The two things are not mutually exclusive and unrelated.

I find it very strange and slightly suspicious that so many of the Bitcoin types appear to push the Bitcoin v Gold case, or even spend much of their time on twitter talking down gold. Why would they bother? The true gold bugs aren't bothered by Bitcoin at all so why are so many of the Bitcoin crowd concerned with gold?

China, Russia et al are accumulating gold at massive rates. Not so much bitcoin. So if I had to choose one asset to hold currently, it would be gold.

But I can still see the merits of bitcoin and have no issue with others buying it. Indeed, I think there will be a meshing of gold and Bitcoin in the future, with gold underpinning electronic currencies.

[Errol]

One of the key issues I do have with Bitcoin is in fact what others say is one of the main selling points - the ledger.

The fact that Bitcoin is not truly anonymous and every single transaction is logged and recorded. Further, there are clearly ways to determine who has carried out the transactions etc and who owns what - as evidenced by FBI, NSA and other Intelligence investigations.

At least with gold, I can take a coin (or coins - you can hold £1 million or more in a shoebox) to an unknown location, exchange them with an unknown person and then leave. Nothing is recorded. Nobody knows where the gold is or who has it now. And even if some gold is later discovered, they can't prove that it was my gold or the same gold transacted earlier.

Gold can be genuinely moved, exchanged and utilised in an entirely anonymous and unrecorded manner. 

For me, at least, this is a critical difference.

Edited October 22, 2020 by Errol

[Green Devil]

3 hours ago, Errol said:

One of the key issues I do have with Bitcoin is in fact what others say is one of the main selling points - the ledger.

The fact that Bitcoin is not truly anonymous and every single transaction is logged and recorded. Further, there are clearly ways to determine who has carried out the transactions etc and who owns what - as evidenced by FBI, NSA and other Intelligence investigations.

At least with gold, I can take a coin (or coins - you can hold £1 million or more in a shoebox) to an unknown location, exchange them with an unknown person and then leave. Nothing is recorded. Nobody knows where the gold is or who has it now. And even if some gold is later discovered, they can't prove that it was my gold or the same gold transacted earlier.

Gold can be genuinely moved, exchanged and utilised in an entirely anonymous and unrecorded manner. 

For me, at least, this is a critical difference.

Look up monero. It's a truly anonymous coin, that the fbi has even offered a substantial bounty to anyone that can crack its privacy. They're scared. Unlike gold you don't even need to own it under your floorboards. Just remember a 10  digit password. 

[Lightscribe]

3 hours ago, Green Devil said:

Look up monero. It's a truly anonymous coin, that the fbi has even offered a substantial bounty to anyone that can crack its privacy. They're scared. Unlike gold you don't even need to own it under your floorboards. Just remember a 10  digit password. 

The danger with Monero that the government could make exchanges drop privacy crypto like XMR to continue operating in their countries. Just like they introduced legislation for accounts to be verified with identity in order to trade so they could monitor taxing crypto gains.

Great if your trading for drugs on the darkweb, different if your a regular user trading at exchanges, as you may find it difficult (or high fees) to convert/cash out if the government decides to act.

Edited October 23, 2020 by Sideysid

[nirvana]

GRAPHS.......show me some graphs that Bitcoin and/or other crypto is massively outperforming the stock markets or whatever......

I think you'll find they track the Nasdaq now....generally....YMMV

NB Yeah OK they get an occasional rocket boost from 'Paypal interest' etc but Paypal are one of the shittest companies on the planet; good at robbing numpties  

Edited October 23, 2020 by 5min OCD speculator

[Green Devil]

5 hours ago, Sideysid said:

The danger with Monero that the government could make exchanges drop privacy crypto like XMR to continue operating in their countries. Just like they introduced legislation for accounts to be verified with identity in order to trade so they could monitor taxing crypto gains.

Great if your trading for drugs on the darkweb, different if your a regular user trading at exchanges, as you may find it difficult (or high fees) to convert/cash out if the government decides to act.

You make the assumption that the aim of crypto is the convert to fiat at a later date and spend in the UK. 

If you aim is to buy an island in Panama then I'm sure your monero would be great fully received 😁

[goldbug9999]

5 hours ago, 5min OCD speculator said:

GRAPHS.......show me some graphs that Bitcoin and/or other crypto is massively outperforming the stock markets or whatever......

I think you'll find they track the Nasdaq now....generally....YMMV

NB Yeah OK they get an occasional rocket boost from 'Paypal interest' etc but Paypal are one of the shittest companies on the planet; good at robbing numpties  

The current price boost is due to various big corporations putting treasury reserves into bitcoin, not really anything to do with paypal.

[goldbug9999]

15 hours ago, Errol said:

I think there will be a meshing of gold and Bitcoin in the future, with gold underpinning electronic currencies.

A cyrpto backed by gold is another example of vegetarian sausage substitutes made with real meat - i.e. misses the point completely. You cannot do this without vesting trust in a single entity thus obviating the point of a decentralised currency. 

Edited October 23, 2020 by goldbug9999

[Errol]

21 hours ago, goldbug9999 said:

A cyrpto backed by gold is another example of vegetarian sausage substitutes made with real meat - i.e. misses the point completely. You cannot do this without vesting trust in a single entity thus obviating the point of a decentralised currency. 

I don't disagree with this. It's why I personally would stick to gold - zero counter-party risk, no trust required in anyone or anything and entirely anonymous and unrecorded.

I could certainly see bitcoin being used fore smaller, daily transactions, with gold being used to store wealth and trade between nations.

Edited October 24, 2020 by Errol

[Heart's Ease]

 

Haven't listened to this yet so posting to keep it from getting lost.

[goldbug9999]

11 hours ago, Errol said:

I could certainly see bitcoin being used fore smaller, daily transactions, with gold being used to store wealth and trade between nations.

The common use of bitcoin at the moment is store of value for wealthy individuals and corporations so there is overlap between this and gold. Over time I expect bitcoin to further erode the use of gold in this area, probably never completely replacing it but even supplanting the use of gold by 10% is a 5 fold increase for bitcoin.

Edited October 24, 2020 by goldbug9999