Winklevoss Twins on Bitcoin

[Dave Rishar]

It's may be a good idea in theory, but it's backed by nothing. You can't just make up a currency and then state that it's worth 20 grand a bitcoin.

No central committee decides that a BTC is worth $20k. That's simply what people were willing to pay for one at some point. The market collectively decided (and continues to decide) what a given crypto currency is worth in fiat, which is why the value swings all over the place, and why no one uses gold-backed currency anymore.

But I can certainly make up a currency and state that it's worth $20k per unit. The question is, would anyone give me $20k for one of them? What would they give me? That's what it's actually worth. It doesn't matter what I think it's worth, but what everyone else thinks it's worth certainly matters.

Has to be backed by gold or a government that will honor the currency.

It doesn't have to be backed by anything. It only has to be something that we agree has value. Have you ever traded an item for another item with someone? That was not backed by gold or the government. But that was a physical asset and this makes it an apples to oranges comparison, right? Not really. Have you ever done someone a favor with the understanding that they would do a favor for you later? Sure you have. We all have. Again, not backed by gold or the government, but we agreed that it had value. What gave it value? Our time. Our effort. Our labor. And what is currency, other than a convenient way for us to store and trade labor? We could go back to doing things the hard way...I grow potatoes, and I trade my excess potatoes to the guy that makes shoes in order for a new pair of shoes, etc, but most societies have settled on trading labor for money and then trading that money for labor again, as that frees me from trying to find a guy that makes shoes and needs potatoes when I'm a potato grower that needs shoes. Instead, I simply swap my potatoes for money with whoever needs potatoes and has money, and then I swap that money for shoes with whoever makes (or just sells) shoes.

This system is theoretically less efficient but it's far, far more convenient than the system it replaced. Granted, that was before the internet and cheap and easy global communications, but that's a separate topic.

So no, we don't need gold or a government guarantee. We both just have to agree on how much labor whatever it is that we'll be trading for it is worth, with the understanding that the thing that we'll be trading need not have any worth of its own, as it's merely a placeholder.

Venezuela is a perfect example of what will go wrong when a currency isn't backed by a government. They are devaluing their currency whenever they feel like it, which has destroyed their currency's value. You have to have someone or something that guarantees that a currency will hold it's value or it's just a scam...

Microsoft does not guarantee BTC, but they'll accept it. Think about that for a moment.

Who can you go to if Bitcoin suddenly decides to keep your money and not let you withdraw or sell it? Who's controlling it? Bob, the stoner from UCLA? Fred, the drug dealer in Mexico? Does anyone really know who's manning the ledgers? It is very easy to scam people when there's no transparency regarding the ledgers. Just my take on it...

Replace "Bitcoin" with "smiley emoji that requires significant computing power to generate." Smiley emoji is not a company. It has no staff. It does not decide what you keep or spend. It's simply a collection of ones and zeroes on the internet. There are no shares in smiley emoji. Smiley emoji has no worth other than whatever arbitrary worth that you and I decide upon. If you want, you can burn smiley emoji onto physical memory and remove it from the internet entirely, as the ledger system in play will reflect that. Should you decide to bring your smiley emoji back onto the internet later...well, you can do that too.

Everyone maintains the ledgers...at least, everyone that's mining, in the case of BTC. It works differently for different cryptos, but the general purpose of the blockchain is basically to ensure that everyone has the ledger, so there can be no disagreement about how the smiley emojis circulate.

 

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[Johnnybravo300]

Nor is inflation a hidden tax. If it is, increase the value of my house 5% per year or my wages 3% per year and see if I cry about it.

None of that is inflation. If your wages go up 3 percent but the cost of living increases by 10 percent, that's inflation. Has nothing to do with wages or house value.
The money you spend that your wages don't keep up with is the hidden tax. Anyone that was making $20 an hour 20 years ago sees this everywhere today, groceries, fuel costs, everyday expenditures. The purchasing power of a dollar has been inflated away.

 

[Johnnybravo300]

And what is currency, other than a convenient way for us to store and trade labor?

Currency doesn't store labor, it loses purchasing power. This is why they want us in a digital currency instead of physical cash. With negative interest rates they can force you to spend by eroding the principle and they can control it in many ways, mainly because it will only exist in the ether.
Remember, we are consumer based now and they don't want anyone saving. They need the fiat dollars flowing freely.
Cryptos were invented almost to the day that the last reset happened and that's the way they are taking us now. Coincidence? I think not. There's no added benefits when the money controllers can change the 1's and 0's to nothing but 0's. None of it is for our benefit.

 

[Johnnybravo300]

I read that it costs on average $8038 to mine a Bitcoin and that it's becoming unprofitable for many. The prices really need to go up to keep that going it seems.

 

[Dave Rishar]

Currency doesn't store labor...

That's exactly what it does.

...it loses purchasing power.

It often does this as well. The two are not mutually exclusive.

This is why they want us in a digital currency instead of physical cash.

How many businesses pay their employees in cash? How many businesses do not have a bank account? Our currency is already digital.

Who are "they"?

Cryptos were invented almost to the day that the last reset happened and that's the way they are taking us now. Coincidence? I think not. There's no added benefits when the money controllers can change the 1's and 0's to nothing but 0's. None of it is for our benefit.

Or it may be that someone took a look at what we're doing wrong with our current system and took a crack at fixing it. BTC is not that fix, but it got people looking in another direction. It's certainly worked as a proof of concept. It's also an interesting example of a digital currency that can't simply be converted from ones and zeroes to just zeroes by money controllers, as there are no money controllers in this case. I would argue that this is to our benefit.

But yeah, I suppose that it may be a conspiracy to trick us all into using digital currency when we already are. I'm just not sure who would benefit from it, other than perhaps the people that would use it. It would not benefit the government. It could benefit banks, but only if they all agreed to use it. (Which may be in the works with Ripple, but they seem to have no interest in other forms of crypto.) Is there anyone else that could be behind it?

 

[Johnnybravo300]

You can keep cash in the bank and see if it buys as much in 20 years...but it doesn't. Everyone knows this.
They is the central banks, easy enough to figure out. They want our money purely digital because it's easier to control the spending and interest.
Cryptos won't help our money problems in america. Our problem is that we spend trillions we don't have and our currency is diluted. A crypto won't help if they just pull the money out of nowhere and we still spend beyond our means just like the tax cuts won't help if we don't cut spending. It's all connected. Not hard to understand.
Most businesses don't pay in cash and most do have a bank account so what's your point. I'm referring to having no cash accessible, not whether we have bank accounts.

I'm saying I don't trust the feds enough to let them keep my money safe in the internet world while I only have a card. I'd rather have my cash in hand.
The reset will probably fix all this long before we go all digital anyway.
In the meantime gold has gone up over 2400x in Venezuela. Cheap land for sale hehe.

 

[Dave Rishar]

You can keep cash in the bank and see if it buys as much in 20 years...but it doesn't. Everyone knows this.

Agreed, but this problem is not inherent to digital currency.

They is the central banks, easy enough to figure out. They want our money purely digital because it's easier to control the spending and interest.

Those are the very same banks that would be threatened by a decentralized currency. I doubt that they're responsible for the idea. Note that the crypto that they seem to be interested in, Ripple, is not decentralized. It's very much centralized. The reason why they're interested is that it's easier and faster to transmit electronically than dollars, and it's arguably more secure. It would be beneficial to their customers but more importantly, it would also be beneficial to the banks themselves.

Cryptos won't help our money problems in america. Our problem is that we spend trillions we don't have and our currency is diluted. A crypto won't help if they just pull the money out of nowhere and we still spend beyond our means just like the tax cuts won't help if we don't cut spending. It's all connected. Not hard to understand.

That's one existing problem that crypto certainly can fix. If there is no central bank to print more money, no more money will be printed. Limiting a currency supply to a fixed amount is potentially tricky, but there are a number of strategies to address this.

Most businesses don't pay in cash and most do have a bank account so what's your point. I'm referring to having no cash accessible, not whether we have bank accounts.

You seemed concerned about the adoption of a digital currency. For all intents and purposes, we already use one. If you're paid by check or direct deposit, you're paid digitally. If your employer has a bank account, you're paid digitally. If you have a bank account, you're paid digitally. It's actually rather hard to escape from when you think about it. That was my point.

I'm saying I don't trust the feds enough to let them keep my money safe in the internet world while I only have a card. I'd rather have my cash in hand.

You're actually making a very good point for the utility decentralized digital currencies. A decentralized crypto (pretty much all of them) cuts the feds completely out of the picture. You no longer have to worry about their interest rate adjustment and quantitative easing and all of that other crap, as it simply wouldn't apply to you and your savings - you'd be buying and selling with something else. Are you sure that you think that crypto is a bad idea?

 

[Kansas_Jayhawk]

WF ... yes a bit corrupt

WF is a bank whose internal culture is not honest.

 

[Honest Samuel]

You can hold gold in yours hands, Bitcoin not so much.

 

[Honest Samuel]

I agree with # 266.

 

[Dave Rishar]

You can hold gold in yours hands, Bitcoin not so much.

What can you buy with gold?

Can you hold your bank account in your hands? What about your credit line? I have a packet of paper that I received when I bought my house that explains my mortgage, but I'm not sure that that's the same as being able to hold my mortgage in my hands. I certainly don't pay it with something that I can hold in my hands. I'm not even paid with something that I can hold in my hands.

I agree with # 266.

There is not yet a #266 in this thread.

 

[FreeBirdTim]

The number of cryptocurrencies available over the internet as of 7 January 2018 is over 1384 and growing

I got the above quote from Wikipedia.

So a store is supposed to accept 1,384 different cryptos and know their current "value"? Get real. The only way cryptocurrency will work is if there are one or two, not 1.384 (and growing)!

I'll bet 90% of these currencies will go belly up in the next year. That's a lot of money to lose. Sorry, but I still think it's all one big Ponzi scheme...

 

[1320]

I got the above quote from Wikipedia.

So a store is supposed to accept 1,384 different cryptos and know their current "value"? Get real. The only way cryptocurrency will work is if there are one or two, not 1.384 (and growing)!

I'll bet 90% of these currencies will go belly up in the next year. That's a lot of money to lose. Sorry, but I still think it's all one big Ponzi scheme...

How many fiat currencies exist? The 1,384 cryptos aren’t exclusive to the US....

 

[Dave Rishar]

I'll bet 90% of these currencies will go belly up in the next year.

Extend that timeline to five years and I'd say that 99.9% of those currencies will be...well, not gone, but not worth anything except perhaps to collectors. What I'm curious about are the one or two that will survive, and how they will change commerce.

 

[FreeBirdTim]

That would be the best solution. Have one or two survive and the rest bite the dust. Then it might be a viable alternative.

 

[1320]

The train is about to leave the station....all aboard! For you haters, just skip to the last paragraph as I'm sure anything above it is just tulips and ponzi.

Bitcoin futures volume reached an all-time high on Wednesday, peaking near a combined $670 million between regulated US exchanges CME and CBOE. On Chicago exchange CME, traders exchange more than 11,000 contracts, worth an equivalent 56,010 BTC. According to CME’s Bitcoin Reference Rate (BRR) for April 25, those contracts equate to more than $497 million in single-day volume.

The exchange also noted that average daily volume has increased by 250 percent since it listed its Bitcoin futures product in December, indicating that the spike is more than just a single-day fluke. April’s average daily volume is 3,716 contracts, equivalent to 18,580 BTC. That’s a 44 percent increase since March.

Fellow Chicago-based exchange CBOE — the first regulated US platform to list Bitcoin futures — saw 19,000 contracts (each worth 1 BTC) traded on its platform on Wednesday, which works out to roughly $168 million according to the BRR. This was not only a record for CBOE but was also triple the exchange’s average daily volume for this product.

Futures are primarily (though not exclusively) traded by institutional investors, so rising volumes for these products could be an indication that institutions are beginning to take a more active role in the cryptoasset space.

Abra CEO Bill Barhydt recently said that “all hell will break loose” once institutional investors begin to allocate meaningful capital to investments in the industry, and numerous insiders believe their presence will drive the Bitcoin price to record levels.