OT: Ray, how's your Bitcoin investment going?

[verticaldoug]

Originally Posted by verticaldoug

True, but if I own my house outright, the value went up on paper because of prices increases driven by people borrowing money who had no chance to repay. When they went bust, the value of my house went down. I was able to live in my house so still had some utility, I fail to see any utility in crypto.

I think bitcoin and other cryptos are like this because of stablecoins. If Tether is indeed being issued versus commercial paper with no dollars ever changing hands, it really isn't a dollar peg. It's more like the 1830's Era of Free Banking in the United States when you did not need a charter, and you could set up your own bank in a state and issue scrip. The Scrip was supposedly backed by some asset, but often wasn't leading to confusion and busts. This is precisely why the banking market was regulated at the national level and individual scrip banned.

I actually think the unregulated nature of crypto is a step backward into the era of robber barons.

All that is needed now is for tether to go....
I also want to see which roads lead back to FTX.

If this leads to regulation of the ecosytem, it will be a good thing.

[azrider]

Apparently this recent downturn is "different this time"

There’s Something Different About This Bitcoin Drawdown

• Bitcoin is on the verge of wiping out its halving gain

• A drop below $19,511 could damage the investment case

https://www.bloomberg.com/news/artic...mium#xj4y7vzkg

[Michael D]

Originally Posted by azrider

Apparently this recent downturn is "different this time"

There’s Something Different About This Bitcoin Drawdown

• Bitcoin is on the verge of wiping out its halving gain

• A drop below $19,511 could damage the investment case

https://www.bloomberg.com/news/artic...mium#xj4y7vzkg

I think certain people confused bitcoin for an investment (unintentionally) and ruined it as a currency.

A more cynical take... The entire point of cryptocurrency is deregulation. If I were part of the global financial hegemony and wanted to prevent a decentralized exchange/market the first thing I'd do is tie bitcoin to a fiat, F with it, and cause your average investor to run away forever after stupidly losing a bunch of money.

[verticaldoug]

Originally Posted by Michael D

I think certain people confused bitcoin for an investment (unintentionally) and ruined it as a currency.

A more cynical take... The entire point of cryptocurrency is deregulation. If I were part of the global financial hegemony and wanted to prevent a decentralized exchange/market the first thing I'd do is tie bitcoin to a fiat, F with it, and cause your average investor to run away forever after stupidly losing a bunch of money.

But there have always been products that are 'new' which are not regulated which can exploit the global financial hegemony for insiders / first movers to make a lot of money until broader adoption caused a meltdown which leads to regulation. There is nothing new here. And I do not see the use case as a currency.

[Michael D]

Originally Posted by verticaldoug

And I do not see the use case as a currency.

It's crypto ... currency ...

Do you not understand how or why it can be used as a currency or do you just think it's a poor currency or doesn't make sense for some reason?

[goonster]

Originally Posted by Michael D

I think certain people confused bitcoin for an investment (unintentionally)

When hordes of retail investors plowed their money into it, watched the daily fluctuations like hawks, and mocked normies to “stop being poor” … which part of that was (checks notes) unintentional?

Originally Posted by Michael D

Do you not understand how or why it can be used as a currency

That’s a good one. All snark aside, he has made his case in this thread.

[unterhausen]

Originally Posted by Michael D

Do you not understand how or why it can be used as a currency or do you just think it's a poor currency or doesn't make sense for some reason?

Isn't it a poor currency in that it doesn't transfer right away? To me, just the energy usage alone makes it a poor currency. But it seems like the practical uses are not great.

I think cryptography in general and some sort of crypto exchange might be a good thing, but using it as a currency doesn't make sense to me long-term

[Michael D]

Originally Posted by unterhausen

Isn't it a poor currency in that it doesn't transfer right away? To me, just the energy usage alone makes it a poor currency. But it seems like the practical uses are not great.

I think cryptography in general and some sort of crypto exchange might be a good thing, but using it as a currency doesn't make sense to me long-term

I think all in all it’s a good if imperfect currency for the digital age. I would consider ethereum interchangeable for bitcoin for discussing the currency aspect. It requires energy and sometimes fees but you could argue that there’s a cost that can be attributed to other currency like the USD, and also depending who you are there are huge disadvantages to using USD over crypto.

To me the confusing part is that crypto is mostly seen as a speculative asset. Why would you spend it if you think it’s going up. Why would buy it then spend it if it’s going down.

I jokingly said to my friend that a bit coin is still worth the same amount but the dollar has lost value.

[Michael D]

Originally Posted by goonster

That’s a good one. All snark aside, he has made his case in this thread.

I’m not being snarky, I’m curious. My opinion about crypto can change. I will say it’s strange for someone to say they don’t understand the use case when there are examples of people using it to be found.

[ripvanrando]

Crypto challenges the sovereign and therefore is too risky for me.

Alternatively, they are just Dutch Tulips.

[Louis]

I'm no economist, but IMO it's pretty simple - crypto has become a vehicle for speculation. By definition anything being used for speculation is likely to be too volatile for use as currency.

[thegunner]

Originally Posted by Michael D

I would consider ethereum interchangeable for bitcoin for discussing the currency aspect.

this is a bad take.

[RobJ]

Ask Michael Saylor and MicroStrategy what he thinks of Bitcoin right now.

25% drop stock drop today because the stock is based on their Bitcoin investment.


Sent from my iPhone using Tapatalk

[goonster]

Originally Posted by Michael D

I’m not being snarky, I’m curious. My opinion about crypto can change. I will say it’s strange for someone to say they don’t understand the use case when there are examples of people using it to be found.

I was being snarky.

The currency use case boils down to:
- Somebody makes you (e.g. to buy this NFT it has to be with ETH)
- Evasion of law & regulation

Yes, we know you can buy lots of things with cryptocurrency, but why would you want to? There are also people who trade conch shells, or barter labor for livestock.

The technology remains a brilliant solution in search of the right problem.

[verticaldoug]

Originally Posted by Michael D

To me the confusing part is that crypto is mostly seen as a speculative asset. Why would you spend it if you think it’s going up. Why would buy it then spend it if it’s going down.

I jokingly said to my friend that a bit coin is still worth the same amount but the dollar has lost value.

If your 'currency' is volatile, it just introduces more volatility into the economic system. If you think about the economy long term, people want a relatively stable system so they can plan and make rational decisions.

With a volatile currency, this becomes impossible. It's why currency crisis are so destructive to economies.

All you have to do is watch the El Salvador experiment with crypto, and you realize what a unmitigated disaster this is. You layered a volatile speculative currency over a country with economic problems and incinerated it.