Bitcoins/Litecoins/Virtual Currencies

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Deathwing

Deathwing

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Flobee said:
Good question. I believe that one potential outcome from increased regulation could be the reduction of 'paper' Bitcoin being traded. FTX had something like $1.4billion in BTC liabilities and no actual Bitcoin backing that up. So thats $1.4 billion in fake Bitcoin that was being traded. If you expand that discovery across the space I think its reasonable to believe that :

a) paper Bitcoin suppressed this bull market top
b) Bitcoin supply in the market is likely much lower than it appears

If this is the case and regulation swings in the way of forcing exchanges to confirm and prove that they hold the assets they have liabilities for (questionable that this will happen), then you could see number-go-up by a LOT. In that case I would argue that Bitcoin is going to suck a ton of value from everywhere else and as a result get the attention it deserves as a haven from debasing currencies world wide. Attention brings educators and the work will do itself over time.

The other side of the coin IMO is that regulators continue to try to cripple Bitcoin by allowing scammers to run roughshod over retail and as you said, poison the well. In that case I think we're in for a slow painful transition. I tend to believe that Bitcoin is nearly inevitable because even if retail doesn't understand why it is valuable, there are plenty of powerful people that do.

The current system is only useful to those in proximity to the printer. In the current state of the world that is those aligned with the US. That appears to be an ever shrinking group as the Fed's tightening policy is squeezing ally and enemy alike increasing the incentive to move away from this system. Likewise USD exports its inflation to other currencies during loose monetary policy. By all appearances anyone not benefitting from the cantillion effect have an incentive to either push for their own monetary system where they control the printer, or support a system that is fair for all participants. I tend to believe that BRICS will fail and it will be in these country's interest to support Bitcoin. Game theory would suggest that once one group gets on board and reaps the benefits, others will follow. Eventually the cost of not adopting Bitcoin will be similar to the cost of not adopting Gold that China suffered (they chose to use silver instead and got financially wiped out as a result).

Bitcoin really shines as a system to allow for enemies to trade fairly without trusting one another. It removes the politics from the monetary system and I suspect the value in that won't be disregarded.
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Thanks for the reply. I'll have to read up on this some more as I thought the consensus mechanism was still abusable when one actor on the blockchain becomes quite large relative to the rest.
 
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Flobee

Flobee

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Creslin said:
This is pure delusion. Why would China adopt bitcoin of all things. Why not go back to actual gold in that case.

control of currency and monetary policy is a major pillar of any governments legitimacy and power, second only to their monopoly on violence. You crypto lovers keep thinking they will give it up easily. Even while they promise to regulate you into oblivion.
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It doesn't start with a country like China, obviously. It starts someplace like El Salvador, Nigeria, Zimbabwe, Argentina, etc. Countries that do not have a stable currency of their own, and are hurt the most by Fed policy decisions because they're generally using USD but get none of the benefits of being the US. The countries that adopt Bitcoin first will see outsized returns on that decision (Assuming the thesis is correct and plays out of course).

Other countries will see the results and need to weigh for themselves what is best for them. Weaker countries will likely go first, then countries sanctioned by the west will follow. A country like China or the US are obviously going to be among the last to adopt... because they benefit the most from the current system and have the most to lose. No government would willingly relinquish the power to control the currency, so it is going to start with countries that already don't have that power.

RE: Gold. The world left that system for a reason. War is expensive and due to the physical properties of Gold (Heavy, expensive to store, protect, and move) it tends to be centralized. As a result paper gold made sense. At first redeemable 1 to 1 for actual gold, then later debased multiple times until in 1971 the redemption mechanism was revoked entirely and we entered the fiat era. We won't return to Gold for the same reasons we left it in the first place. The modern world can't run on Gold. Bitcoin has all the same scarcity features that make Gold valuable with the additional benefit of being digital, able to be secured and protected nearly for free using cryptography and some paper at its simplest, and transfers finalize nearly instantly and can be cryptographically proven to have been moved so trust is not required. No truckloads of Gold, no security guards, no decoy convoys. Gold is simply too expensive to actually use.

Sidenote - Removal of the Gold backed monetary system actually made forever wars possible due to infinite debt issuance. War used to end when one side ran out of gold. By returning to a hard money system via Bitcoin we will also likely end forever war. Due to the qualities listed above, paper Bitcoin would not be acceptable for financing conflict, thus real money would need to exist. War more or less stops under a Bitcoin standard
 
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Flobee

Flobee

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Arden said:
Tell me you are clueless about human nature without telling me you are clueless about human nature
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It doesn't stop people from killing each other. It stops endless funding for killing each other. Go read up on your history. Generally wars were lost by the side that ran out of gold first. Today's landscape is very different due to fiat financing.
 
Arden

Arden

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Flobee said:
It doesn't stop people from killing each other. It stops endless funding for killing each other. Go read up on your history. Generally wars were lost by the side that ran out of gold first. Today's landscape is very different due to fiat financing.
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I think you need to read up on your history amigo. Wars were fought long before the invention of paid professional armies.
 
Mist

Mist

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This is just reinventing central banking with extra steps:

1668552226530.jpeg
 
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U

Unidin

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Flobee said:
It doesn't start with a country like China, obviously. It starts someplace like El Salvador, Nigeria, Zimbabwe, Argentina, etc. Countries that do not have a stable currency of their own, and are hurt the most by Fed policy decisions because they're generally using USD but get none of the benefits of being the US. The countries that adopt Bitcoin first will see outsized returns on that decision (Assuming the thesis is correct and plays out of course).

Other countries will see the results and need to weigh for themselves what is best for them. Weaker countries will likely go first, then countries sanctioned by the west will follow. A country like China or the US are obviously going to be among the last to adopt... because they benefit the most from the current system and have the most to lose. No government would willingly relinquish the power to control the currency, so it is going to start with countries that already don't have that power.

RE: Gold. The world left that system for a reason. War is expensive and due to the physical properties of Gold (Heavy, expensive to store, protect, and move) it tends to be centralized. As a result paper gold made sense. At first redeemable 1 to 1 for actual gold, then later debased multiple times until in 1971 the redemption mechanism was revoked entirely and we entered the fiat era. We won't return to Gold for the same reasons we left it in the first place. The modern world can't run on Gold. Bitcoin has all the same scarcity features that make Gold valuable with the additional benefit of being digital, able to be secured and protected nearly for free using cryptography and some paper at its simplest, and transfers finalize nearly instantly and can be cryptographically proven to have been moved so trust is not required. No truckloads of Gold, no security guards, no decoy convoys. Gold is simply too expensive to actually use.

Sidenote - Removal of the Gold backed monetary system actually made forever wars possible due to infinite debt issuance. War used to end when one side ran out of gold. By returning to a hard money system via Bitcoin we will also likely end forever war. Due to the qualities listed above, paper Bitcoin would not be acceptable for financing conflict, thus real money would need to exist. War more or less stops under a Bitcoin standard
Click to expand...
You mention El Salvador. They've taken a beating since declaring Bitcoin a currency.
www.theguardian.com

China circles El Salvador’s economy as country edges toward crypto plunge

President Nayib Bukele bet on bitcoin and its tumbling value has put the Central American country in a financially precarious spot
www.theguardian.com www.theguardian.com

What makes you think other countries are going to follow that lead?
 
Flobee

Flobee

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Unidin said:
What makes you think other countries are going to follow that lead?
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I would take a wait and see approach on El Salvador. This isn't played out yet and there have been plenty of FUD articles written about them. Probably a good idea for any other country that takes this approach to not publicly announce every purchase and buy the entire way down at the beginning of a bear market. I don't think it will matter longterm, but it could have been done much more strategically.
 
Sanrith Descartes

Sanrith Descartes

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reavor said:
Another week another exchange

Click to expand...

A house of cards is never just one card. Once one fails the systemic shit that has been holding them all together goes poof. With the exception of probably Gemini, none of the others can handle any type of serious withdrawals. I only mention them because they are regulated by the state of NY. Not that its a lock, because by and large NY is corrupt AF, but I trusted Gemini more than any other to not be a total Ponzi scheme.
 
Flobee

Flobee

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Sanrith Descartes said:
A house of cards is never just one card. Once one fails the systemic shit that has been holding them all together goes poof. With the exception of probably Gemini, none of the others can handle any type of serious withdrawals. I only mention them because they are regulated by the state of NY. Not that its a lock, because by and large NY is corrupt AF, but I trusted Gemini more than any other to not be a total Ponzi scheme.
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Gemini had a yield product tied to their deposits. It was opt in, so I doubt they'll go down completely but some of the creditors to that yield product may have lost their pants. Most likely platforms that don't provide yield on deposits will be alright, so I would apply that to Kraken and for sure all of the Bitcoin only exchanges as they shouldn't have any exposure.
 
Sanrith Descartes

Sanrith Descartes

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Flobee said:
Gemini had a yield product tied to their deposits. It was opt in, so I doubt they'll go down completely but some of the creditors to that yield product may have lost their pants. Most likely platforms that don't provide yield on deposits will be alright, so I would apply that to Kraken and for sure all of the Bitcoin only exchanges as they shouldn't have any exposure.
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Yeash this isnt a Gemini thing. Gemini is one of the few that might be fully backed and not floating numbers.
 
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Flobee

Flobee

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Gunna be sad if the GBTC in my 401k gets nuked. Feelsbadman. Not your keys, not your coins though

TLDR - The 'final boss' of crypto yield is pausing withdrawals and is potentially insolvent. Owned by same holding group as Grayscale.



EDIT: I guess Grayscale is alright, we'll see how this unwinds though. Heard that line before
 
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