I suppose I should first state that I know nothing about bitcoin, sure, I am an intelligent guy with a background in IT and I am aware of the broad principles, crypto, mining, blockchain, etc.
But I don’t “get” it any more than I “get” some of the more zany apps / startups / kickstarters out there, for example I do not “get” Uber, I don’t see why anyone would choose an uber ride over a taxi or public transport or anything else, and I don’t see why anyone would put themselves and their vehicles up to be an uber taxi, as opposed to joining a local cab firm or starting your own private hire.
The current “exchange rates” for bitcoin <> fiat currency underline my issue perfectly, it’s like a bunch of weird role playing gamers at a convention saying that one fantasy world currency is worth 10,000 of another fantasy world currency, what’s next, would the Enterprise beat a Star Destroyer? Or is the ratio 2 to 1?
I can see some kind of sense in tying a currency to a barrel of oil, the barrel of oil has the same calorific value so it’s a way of measuring the currency vs kWh, yeah man, this illudium one zoltar coin is worth 100 kWh, you can sort of reach out and touch that.
But the whole bitcoin / crypto currency thing always left me feeling it was either a nerdy joke, or a complete fucking scam.
Let me explain. Paypal, it acted in many ways just like a bank, but it was extremely careful to always make sure that it was not a bank, in law, which meant it could do things that would be illegal for a bank to do.
Crypto-currencies have always stuck me the same way, they are not real fiat currencies (sic) and because they are not real fiat currencies it is not treason to print H^H^H^ “mine” them, (not the use of the meme mine, as in precious metal mining, for something that isn’t even remotely related to mining) because as far as I know it is treason in every country on the planet to print the state issued fiat currency…. consider yourself lucky you are *only* facing a counterfeiting charge and 25 years.
And yet here we are “exchanging” them for real fiat currency, but it’s OK because I can exchange the crops in my field for real fiat currency.
I don’t see that it takes X computational cycles to compute the next bitcoin (where X rises every time) as being any indicator of value, 13 is a prime number, here is bitcoin 13, nobody else can have bitcoin 13, there can be only one bitcoin 13, but it has the exact same value as bitcoin “ten millionth prime”, of which there can also be only one.
Apparently the great attraction is to create more you have to indulge in ever more lengthy computational effort, as opposed to just issuing more fiat, ok…. I don’t get how that is an improvement.
So… the limited edition yoda figurine is worth more than the ewok figurine because the yoda one is limited edition and the ewok ain’t… yes, I can see the point you’re trying to make, but I personally do not see the VALUE in either one, I wouldn’t trade anything of value for either one.
Sure, my nationally enforced legal currency is millennium falcons, but I don’t stockpile it, I don’t value it, I earn as much as I can so I can trade it as fast as possible for things of value, like tools and physical assets and premises and so on.
So your computationally mined on a GPU is limited edition same as a Dali painting, the scam is you basically created a new art form (I do not get why a rembrandt is worth millions, and a perfect print is worth 50 cents) and gained enough acceptance that people are going to trade it for fiat.
Shares in the south sea (bubble) company and tulip futures comes to mind, or rich twats “investing” in rare cars, or patek philippe watches that tell the time as well as a 10 dollar casio.
I DO NOT “GET” IT, and I do not accept that I do not get it because I have no soul or no wit or no vision, that is emperor’s clothes stuff, I’m an engineer, I’ve got more soul and vision than most people, you just see a stream at the bottom of your garden you can mebbe fish in, I see a source of hydro.
I DO however get the problem with crypto, and the problem is it gets real hard to defend fiat and dismiss crypto, because the fact is in 2017 AD they are both virtual electronic creations with no physical presence of any kind, except a fake one in the case of fiat, where the fake paper fiat is accepted as something that can be converted into digital fiat by the vendor when I walk into their shop and pay cash.. it’s fungible by nature.
I do not actually know for a fact if bitcoin / crypto differentiates between “prime coins” for identity purposes, I know they do not for value so they are essentially fungible.
And once shit like crypto makes you start to look, you can find all sorts of other similar methods of paypal still not a bank banking, and not a central bank fiat currency issuing, so it ain’t treason or counterfeiting, but you can trade it all for real virtual fiat so what’s the difference.
Bonds and stocks, everything bitcoin has going for it, apple shares have going for them, so bitcoin replacing the mighty dollah well, why not just trade the fucking apple shares directly, who needs the bitcoin or the dollar, just trade in AAPL.
Note I’m going going anywhere near capital gains tax or securities and exchanges or anything else, I’m talking medium of exchange, what can be made to work.
Can I walk into an Apple store with no money and just some apple shares, and walk out with no apple shares and a iphone x?
Officially the answer is probably no, but I’d bet my life I could do it in any apple store anywhere, nobody easier to trade an apple share to than a fanboi employee.
Nota Bene not saying I’d get a 1:1 on nominal dollar value of the share v iphone x list price, but I might, I might beat it.
And at that point the AAPL share is as valid as the dollah or the bitcoin.
======================================
Much has been said about Rothschilds and joo bankers and so on, control issuance of currency and you control the country, and I am sure that was 100% true and factual up until around 1960.
Now in late 2017 the virtual digital fiat US Dollar is a different beast, not because Nixon abandoned the gold standard and went fiat, (maybe that was the first line in the song, but that’s all) but because it went electronic and digital, because IT FUCKING HAD TO, because stock markets were already going digital and electronic, (BBC Horizon chips are down 1977) and so every national fiat currency everywhere had to jump on the same train or be utterly destroyed within a few years.
It was that or ban electronic trading of stocks and shares, and I don’t think anyone had the authority or power to do that.
As soon as you have created an electronic digital stocks and shares trading platform, you have just done the paypal like a bank but not a bank and bitcoin like a fiat currency but not a fiat currency thing, you have thing B that does the same thing as thing A, so the utility is there, but it is also legally different to thing A, so the legal constrictions are not there.
I can start a company tomorrow, for 100 bucks, fuck your bitcoin, on formation it only has 64 shares, that’s rare as shit right away, I could call it the tesla model 2020 roadster deposit handling and futures company and we could trade exclusively in holding and managing deposits on the tesla model 2020 roadster.
==========================================
I think the truth is actually very simple, and very reasonable, because it’s easy to put yourself back in 1970 and be as expert as you like at anything, and accept that there was no way in hell for anyone to even predict 1% of what digital electronics had in store.
When you have the top man in the top computer company on the planet saying things like I can see a demand for as many as five computers worldwide in the next few years you can take one of two perspectives, either he was a fucking loser, or he wasn’t, and if he wasn’t, and that was the best prediction a man at the head of his field could come up with…. how would you have fared?
One world computer, multivac, like asimov?
I think the truth is that around 1975 fiat currencies went to digital electronic fiat currencies, and the digital electronic platforms that precipitated that move also opened up whole new vistas and territories in which you could play, and nobody was ready for it, and nobody understood it, and nobody can actually control it any more.
An incompetent or corrupt or joo world order controlled central banking system is hugely preferential for 99.999% of people to a central banking system that is the tail on the dog, a tail that has no ability to wag the dog, or influence it in any way.
A tail whose only purpose is PR.
I think the real danger in bitcoin and other crypto is not that it is not as valid as fiat, I think the real danger is it becomes just as valid as fiat to the man in the street….
“Two hamburgers please”
“That’ll be 4 bucks 75”
“How much is that in bitcoin?”
“we don’t take bitcoin mate, the fees for the machine are too high, but it’s one yoda and 75 ewoks if you wanna pay in forcecoin”
Because then the house of cards collapses, because effectively you are asking a guy to compare the 100 bucks he just withdrew from the hole in the wall machine with toy monopoly money, with the knowledge that the stores value both equally.
We have stories in the press of people selling assets, houses and cars, in bitcoin, only accepting bitcoin, and I have long been saying “how fucking much” when I see houses that should be and were 25k on the market for 295k, I see a bubble but the bubble, is it real or not, that people argue about is the bubble in the price of the HOUSE, they are not arguing about the value of the CURRENCY.
Once you start saying 295k or 59 bitcoin, you risk people arguing about the value of the CURRENCY.
And here is the issue.
1980 house is on market for 30k
2017 house is on the market for 295k,house was seen as a wise investment.
house next door goes on market for 60 bitcoin, houses, eg ASSETS start to be seen as a refuge and safe store of value from old currency, which devalues, because it has to, because nobody can see any difference between virtual electronic crypto and virtual electronic fiat.
value of fiat collapses
house is now on the market for 100 newbux, house next door is still on the market for 60 bitcoin
bitcoin collapses
house is on the market for 75 newbux, owner is desperate to sell because new robust virtual electronic fiat is valued and trusted and accepted, old fiat wiped out, so 200k mortgage in old money value of the old money is wiped out BUT DEBT REMAINS.
Debt is retroactively revalued in newbux by;
1/ person holding the debt
2/ person owing the debt
prace bets now.
Like I said, just an engineer, do not “get” crypto, but can’t see it as anything but a canary with a 20 a day habit and a zippo in a coalmine full of methane and oxygen, the mere fact that the canary exists should scare you.
When the smoking crater appears slowly out of the aftermath, the blame game starts, it’s not the coal, or the mine, or the methane, or the mine owners, or the workers, or anything else, it was the canary, and who could object to a canary in a coal mine, and who knew the bastard has a 20 a day habit, the canary never mentioned that, he was a yellow digital bird that detected oxygen loss contamination before human workers get affected, just a tiny little thing, who knew, who could know, and of course the fucker is dead now… conveniently…
It’s doesn’t even matter if “Marlboro Bird” was deliberately introduced to the coal mine, or if it was all just Half Life style unintended consequences, the end result is the same.
US$ is not wealth, it is just one way of measuring the value in an asset, provided you retain the asset, you retain the wealth.
If the fiat vanishes and you owed a debt based in it, you debt will not vanish, it will just be revalued in something else.
If the fiat vanishes and you are owed a debt based in it, the debt will not vanish, it will just be revalued in something else.
Two questions remain;
1/ who will preside over the revaluation?
2/ do you care? (you do not if you hold assets)
Suddenly remembering where you had a boating accident and “lost” several kilos of phyzz after such a revaluation won’t help you, because you won’t be in group 1, deciding on the value of your phyzz in terms of new bux
Final thoughts.
US$ market is not the big boy on the block, AAPL or tesla is just as big, stocks and bonds and futures are far far far bigger, forex dwarfs even that.
Forex is the head of the dog, 1 bitcoin = 10,000,000 US$ kills the US$, but stocks and bonds and futures are the guts of the dog, and if it eats too much grass or something poisonous, the tail which is the fed / US$ isn’t going to have any influence.
Crypto isn’t just a threat to US$.
There is a guy in the netherlands who has cashed out everything he has and moved into a tent on a campsite and he is 100% into bitcoin, he is either a genius or a lunatic, I don’t know which, and only time will tell, most likely the timing of when he cashes out of bitcoin and gets back into tangible assets.
Pricing a house as being worth either UK£295,000 OR 60 bitcoin, and having everyone from the state and the tax office onboard with how to do this and stay legal and pay capital gains etc, is not good for bitcoin or pounds sterling or housing.
All that is missing is a price in Yodas / Ewoks / Forecoin.