That's what she said !

Go take a look at r/bitcoin if you want to see tulip mania

in action.

Seems exhilerating.

Boy are they going to be suicidal when the price crashes

Or maybe the rest of us will be like COME ON WTF if the price holds forever and becomes the new normal and we have to cope with all of these schmucks posting pics of their new houses and sports cars.
Permalink Wabi-sabi 
December 7th, 2017 10:19am
In a way, our money is like vaporware. However it works because we all agree on the game. If the US gov goes away tomorrow, the dollar is useless like toilet paper.
Permalink BibimbapClinton 
December 7th, 2017 10:22am
Well, not entirely useless. You can wipe your butt with it.
Permalink BibimbapClinton 
December 7th, 2017 10:22am
Gold?  To me it looks like a centuries long bubble.  It has some intrinsic value but $1200/ounce?  Sounds like a crypto currency.

*shrug* humans
Permalink Wabi-sabi 
December 7th, 2017 10:24am
BTC is currently clocking in at less than 4 transactions per second:
http://hashingit.com/analysis/33-7-transactions-per-second

I'm not sure of the significance of this but doesn't this kind of call into question its effectiveness as money?

Stupid question from a tech dinosaur (me): When you buy BTC from a site like coinbase.com, is that actually getting recorded in the distributed ledger? Or is the exchange keeping its own ledger? Because with the above limitation, I'm not sure how it hasn't collapsed already.
Permalink NPR 
December 7th, 2017 10:25am
Diamonds have less intrinsic value than gold.

And are manipulated as a cartel.
Permalink Zaq 
December 7th, 2017 10:26am
Also, one of the theories of why the USD has any value is the taxing authority of the US government backs it.

Since BTC has no state, its value must come from something else (besides willingness to suspend disbelief).
Permalink NPR 
December 7th, 2017 10:27am
> If the US gov goes away tomorrow, the dollar is useless like toilet paper.

The US government has stealth bombers, aircraft carriers, nukes, and an army of police to make sure that doesn't happen.

What does bitcoin have?
Permalink MobyDobie 
December 7th, 2017 10:28am
Everything in financial market depends on liquidity.  You can't sell your stocks if there is no buyer. That's why market makers justify their existence. They buy/sell when there isn't buyers.


You can't say that about bitcoin.
Permalink BibimbapClinton 
December 7th, 2017 10:28am
You can't?

There has to be a market if I want to sell right?

That must be why the price is so volatile: BTC is thinly traded.
Permalink NPR 
December 7th, 2017 10:30am
Try to take all your bitcoin and converts to dollar and see what happen. Do you get offer for 50% of its value? 30%? 10%? What is it?  I can sell all my stocks right now and get out in micro seconds.
Permalink BibimbapClinton 
December 7th, 2017 10:31am
1 tonne old = $40m

Total gold = 187,000 tonnes

All the gold in the world ever mined in  history = 40% of one year's gdp in the USA.

It's a lot, but it's not ridiculously a lot.
Permalink MobyDobie 
December 7th, 2017 10:32am
1 tonne old = $40m

Total gold = 187,000 tonnes

All the gold in the world ever mined in  history = 40% of one year's gdp in the USA.

It's a lot, but it's not ridiculously a lot.
Permalink MobyDobie 
December 7th, 2017 10:32am
I thought the transaction fees kept it going...
Permalink tulipoman 
December 7th, 2017 10:33am
> I'm not sure of the significance of this but doesn't this kind of call into question its effectiveness as money?

In the early days people were hoping to use BTC for small purchases like buying a cup of coffee.  The cost of verifying your transaction with miners was tiny.

Nowadays the cost of verifying a given BTC transaction is something like $4 (because there's so much demand and the protocol doesn't allow that many transactions per block), and miners may still not verify you all that quickly.

So its utility as a thing to replace credit cards has faded.  BTC's utility as a method to move large amounts of money between countries bypassing banks seems to be what's holding it up these days.

There are attempted BTC forks to try to turn it back into an end user point of sale style function.  "Bitcoin Cash" is an unpopular, poorly supported fork along that line.

> Stupid question from a tech dinosaur (me): When you buy BTC from a site like coinbase.com, is that actually getting recorded in the distributed ledger? Or is the exchange keeping its own ledger? Because with the above limitation, I'm not sure how it hasn't collapsed already.

A lot of this stuff avoids the blockchain if they can help it because of the lag and expense mentioned above.  AFAICT the exchanges only put your transaction on the blockchain if people deposit or withdraw BTC.
Permalink Wabi-sabi 
December 7th, 2017 10:35am
> That must be why the price is so volatile: BTC is thinly traded.

I think it's so volatile because there isn't a strong derivatives market yet.  CME's recent announcement to start getting involved may change that.

Or it may still be a dumpster fire that explodes tulips that people are mortgaging their houses to buy.

Nothing makes sense anymore.
Permalink Wabi-sabi 
December 7th, 2017 10:39am
"BTC's utility as a method to move large amounts of money between countries bypassing banks seems to be what's holding it up these days."

Putting "large" amounts of money into an unproven and volatile currency like bitcoin seems nutty to me. But I'm sure "large" is a relative term and for some this is quite a bit of fun.
Permalink NPR 
December 7th, 2017 10:43am
Yeah, creating derivatives for it will make it more liquid. It also guarantees an even bigger bubble.
Permalink NPR 
December 7th, 2017 10:45am
*shrug*

If you're one of those diehard people on r/bitcoin convinced it's the pure honest future of money then putting value in anything *but* bitcoin seems like the risky thing.
Permalink Wabi-sabi 
December 7th, 2017 10:58am
A single bitcoin transaction has hit over $20 to get processed. It has completely failed as a low-cost banking alternative.

Liquidity remains close to non-existent. The whole tether thing was held as the saving grace that allowed you to sort of liquidate, only it turned out to be a big fucking sham as well.

Bitcoin is an enormous scam, and doesn't even have the credibility of tulip mania. It is going to crash extremely hard, and the only hope is that it doesn't take the future of cryptocurrencies (and better approaches like proof of stake) with it.
Permalink Simulacrum 
December 7th, 2017 11:42am
Could you explain why is Bitcoin a scam but other cryptocurrencies aren't?

I'd also like more information on your fascinating claim that BTC liquidity is non-existent.
Permalink Wabi-sabi 
December 7th, 2017 12:04pm
Gold is the original cryptocurrency. It has very little use, except that people value it highly.
Permalink Shylock 
December 7th, 2017 1:12pm
In Africa they never got around to rolling out telephone lines, power lines, or establishing banks, identification, or credit systems.

Then cheap chinese cell phones arrived with pay as you go by the minute cards, texting, and limited net access for facebook. People throughout the continent living in mud, dung and grass huts ALL have solar panels now charging their cell phones which they use to check the market price on goat meat or tapioca root to see if it's worth their while to bring a goat to market today or if they should wait a few days.

Currency is now based on cell phone minutes and there are apps to wirelessly transfer your cell phone minutes as payment when you buy things.

There's no infrastructure except the occassional cell repeater out on the savannah powered by a rack of solar panels.

They are running on a total digital currency system which has no encryption, no transaction fees, no taxes, and no tracking, and it's all arisen ad hoc without any state support at all.
Permalink Reality Check 
December 7th, 2017 1:18pm
Interesting. Link?
Permalink Shylock 
December 7th, 2017 1:32pm
Let me tell you about gold...

At the end of Vietnam war when the communists came into the South, gold was the only thing people would accept for a while.

Same thing happened with boat people who used gold to purchase food and goods while staying in camps in the Philippine, Malaysia, or in Thailand.
Permalink BibimbapClinton 
December 7th, 2017 1:40pm
Yes, people all over the world value it highly for some reason.

It has few uses, and anything it could be used for it is too expensive for.

It makes the best wiring.
Permalink Shylock 
December 7th, 2017 1:51pm
> It has few uses, and anything it could be used for it is too expensive for. 

Gold gets you pussy

It's also non toxic, relatively inert,  and has interesting and useful electromagnetic and chemical properties.
Permalink MobyDobie 
December 7th, 2017 2:48pm
Because there is a finite supply of Bitcoin and new Bitcoins are getting harder and harder to mine as by design, it’s easy to call Bitcoin “digital gold.” Gold has had value since the dawn of mankind and it’s been used as a form of currency up until the last century. As gold today is no longer pegged to the dollar, its fundamental value should be questioned as well, as I detailed in this article. However, gold has proven itself to be a useful commodity because it is truly unique. It is also viewed as a safe haven assets because in times of chaos, gold will maintain its purchasing power while fiat currencies could become worthless. To be more specific, any real asset will serve the same purpose, but gold is the universal standard given its liquidity.

Bitcoin cannot be equated to gold because as I stated in the previous section, Bitcoin and Bitcoin alternatives can be easily created with blockchain technology. On the other hand, gold is truly finite. There is no other element that holds the same characteristics as gold. One common argument I come across is that while there are many altcoins, there is only one Bitcoin. The problem with that argument is that Bitcoin’s main differentiation is really its name, all cryptocurrencies are the same in the general sense in that the underlying technology is identical. If I mark a gold bar with an X, it doesn’t change the fact that it’s a gold bar. Similarly, a cryptocurrency by any other name is still cryptocurrency. Remember that blockchain technology allows us to create literally infinite versions of cryptocurrencies, as such, the parallel to gold doesn’t hold up.

Bitcoin will also fail to hold its value in times of crises. The integrity of Bitcoin depends on a network of decentralized nodes, which themselves require civil stability. Without a government to provide law and order and the necessary infrastructure to keep the network running, Bitcoin itself will collapse. It goes without saying that gold has no such problems.
Permalink MobyDobie 
December 7th, 2017 2:50pm
I'm not saying bitcoin is a scam and the others aren't. *Many* of them are scams. ICOs on Ether are almost universally scams. Bitcoin, however, has gone big so if it collapses before some legitimacy arises, it could prevent the future.

As to liquidity, this may have been resolved somewhat with a few more players arguably offering options to actually convert BTC to USD. Of the companies that actually do this, BTC is notorious for magical holdups that prevent services from ever actually converting BTC to dollars. Deals where people with any volume have done fractional private deals just to unload. GDAX seems legitimate, so maybe that was resolved.
Permalink Simulacrum 
December 7th, 2017 2:52pm
>Gold gets you pussy

True. It makes very nice jewelry.

>It's also non toxic, relatively inert,  and has interesting and useful electromagnetic and chemical properties.

Certainly. But its ridiculous overvaluation prevents it from being used for any of those interesting and useful properties.
Permalink Shylock 
December 7th, 2017 2:56pm
Not true at all.  It's used for that stuff... if you need it badly enough.

It makes sense to gold plated an astronaut helmet or a cockpit window.    It doesn't make sense to gold plate a motorcycle helmet or a mass produced car windscreen.
Permalink MobyDobie 
December 7th, 2017 2:58pm
Let say you are in a war torn country. Enemies with guns are all over the place looking for you. You have to find an escape route. Here is a guy with private air plane or boat. You approach him and say get me out of here and I pay you in gold. Bitcoin? What do you do when there is no electricity and everything is shut down?
Permalink BibimbapClinton 
December 7th, 2017 2:59pm
Btw if you think gold is ridiculous over valued, you do not know how rare it is.

Annual steel production is 1600 million tons.  In 1 year,we produce 10,000x as much steel as we have produced gold in ALL of  human history.

Annual copper production is 16 million tons.  In 1 year,  we produce 100x as much copper as we have produced gold in ALL of human history.

That's why gold is reserved for high value uses.
Permalink MobyDobie 
December 7th, 2017 3:09pm
Interesting read from Seeking Alpha.

Also interesting to see the comments and people attacking the author's "ignorance."
Permalink NPR 
December 7th, 2017 3:13pm
Gold is very rare. The day of easy gold mining is over.
Permalink BibimbapClinton 
December 7th, 2017 3:18pm
You have to dig 7-91 ton of dirt to get 1 ounce of gold if you find it.
Permalink BibimbapClinton 
December 7th, 2017 3:20pm
Until we retrieve a suitable asteroid, then the price will plummet.
Permalink Go Musk 
December 7th, 2017 3:22pm
Hey Mr. Musk, can you come up with a way to fuse atoms together to make gold? You will be Centillionaire!
Permalink BibimbapClinton 
December 7th, 2017 3:25pm
No but I  can turn unused cycles on your  computer into gold
Permalink Satoshi Nakamoto 
December 7th, 2017 3:27pm
No but I  can turn unused cycles on your  computer into gold
Permalink Satoshi Nakamoto 
December 7th, 2017 3:27pm
Fusion to produce gold is completely feasible...

...just very very expensive due to the energy required.

Simple physics really.

A lot cheaper/easier to go find some that already exists

At least for now
Permalink Go Musk 
December 7th, 2017 3:28pm
Mr Satoshi,

It is easy to create gold. Please follow my recipe to the exact details:

Make two city-sized neutron stars colliding at one third the speed of light.
Permalink BibimbapClinton 
December 7th, 2017 3:30pm
Yes but think of the wasted energy with your solution. More than a type 2 civilisation.

Mine solution only requires a type 1 civilisation,  and even that, not until 2020.
Permalink Satoshi Nakamoto 
December 7th, 2017 3:34pm
I have a step relative who was one of those airmen that piloted the helicopters to take Vietnamese citizens out at the last minute - to the US.

He swears that every single one of those motherfuckers had duffle bags full of solid gold coins and bars. And nothing else but the clothes on their backs.

These were business people, running shops and services. If they tried to get their money out in South Vietnamese currency - why? It was useless as that country was gone.

Gold actually works. It has a huge value to weight ratio, and can be readily procured.

If your currency or banking system might not let you get your money, why wouldn't you be storing everything in gold.
Permalink Reality Check 
December 7th, 2017 5:10pm
Hear hear, RC. You are always the voice of reason among CoT wilderness.
Permalink BibimbapClinton 
December 7th, 2017 5:14pm
> These were business people, running shops and services. If they tried to get their money out in South Vietnamese currency - why? It was useless as that country was gone.

What did they exchange for the gold? Business assets? real estate?
Permalink X 
December 7th, 2017 5:18pm
I believe a seat on the helicopter! lol
Permalink BibimbapClinton 
December 7th, 2017 5:19pm
Or a taxi ride to the US embassy...or a seat on a ship to sea.
Permalink BibimbapClinton 
December 7th, 2017 5:19pm
If you live in that kind of country, you'd have been quietly saving gold for years, and stashing in a secret hiding place.
Permalink MobyDobie 
December 7th, 2017 5:20pm
I would be nervous as hell having my life's savings in gold coins, because of the possibility of theft. But for them, it was the only way to get their wealth out intact.
Permalink NPR 
December 7th, 2017 5:37pm
> I believe a seat on the helicopter!

To get the gold in the first place
Permalink X 
December 7th, 2017 7:28pm
I've heard lots of stories of Holocaust survivor descendants that lived because they carried gold.

If the situation is that fucked, yes, gold is a good option.

But in normal times, it's just about the worst investment you can buy.
Permalink Shylock 
December 7th, 2017 8:18pm
Pretty obvious what they did with the gold. They used it to buy shops and opened Pho and Bun restaurants.
Permalink Reality Check 
December 7th, 2017 9:31pm
Iranians also brought gold. They used to pay for their kids to go to college.

Sunni muslims don't come with gold though. They show up, sign up for welfare, and stay there ... permanently. While having 13 kids with each of their 4 wives. That's their plan. Eat welfare and repro.
Permalink Reality Check 
December 7th, 2017 9:33pm
Nah, stockpile drugs.  High value and portable.

Everyone always wants to get high, especially when SHTF.
Permalink Wabi-sabi 
December 7th, 2017 10:00pm

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