doomed Posted June 21, 2017 Share Posted June 21, 2017 22 minutes ago, dugsbody said: That isn't what I'm saying at all, and I'm surprised you both find it so easy to miss the point, particularly since the evidence shows my point is correct. People don't use bitcoin as a currency because it will be "worth more tomorrow". You ultimately believe this and I'd ask how many people on here are holders and how many are users. My bet is 99% of you, 99% of the time don't transact in bitcoin, you hoard it. And why will it be worth more tomorrow? Because there will be someone willing to buy it for more. And why would they buy it for more? Because they believe it'll be worth more tomorrow. And repeat. And why bitcoin, out of the infinite number of crypto currencies? Well, because it got their first. Just got to hope that sentiment holds until you can get out and get back to spending with real money. What you are describing is Gresham's law that states, "bad money will drive out good money". So yeah people will obviously get rid of their fiat toilet paper first. I fail to see how this is an argument against Bitcoin. Quote Link to comment Share on other sites More sharing options...
dugsbody Posted June 21, 2017 Share Posted June 21, 2017 Just now, doomed said: What you are describing is Gresham's law that states, "bad money will drive out good money". So yeah people will obviously get rid of their fiat toilet paper first. I fail to see how this is an argument against Bitcoin. Because essentially I'm trying to establish the value of bitcoin. I'm explaining that it isn't being used for the primary purpose, therefore any value it derives is entirely based on sentiment and nothing else whatsoever. When you buy gold, it is largely sentiment driven and we see this in the price fluctuations but you also know two other things. 1) Gold does indeed have practical uses. 2) There is currently a finite amount of gold. But for bitcoin: 1) Currently has almost no practical use because a currency which is worth more tomorrow will never truly be used as such (and evidence agrees). 2) There might be a finite amount of bitcoins but there is an infinite number of crypto currencies. But let's examine point 2 for gold. If transmutation was invented and we could cheaply transform (say) hydrogen into gold, what would happen to the price of gold. It would pretty much go to zero. And since there are an infinite number of crypto currencies / coins, where does the value derive from? Quote Link to comment Share on other sites More sharing options...
Bear Hug Posted June 21, 2017 Share Posted June 21, 2017 10 minutes ago, doomed said: What you are describing is Gresham's law that states, "bad money will drive out good money". So yeah people will obviously get rid of their fiat toilet paper first. I fail to see how this is an argument against Bitcoin. Doesn't bitcoin's ever-increasing value make it "good money" and therefore it is being driven out? Quote Link to comment Share on other sites More sharing options...
doomed Posted June 21, 2017 Share Posted June 21, 2017 Just now, dugsbody said: Because essentially I'm trying to establish the value of bitcoin. I'm explaining that it isn't being used for the primary purpose, therefore any value it derives is entirely based on sentiment and nothing else whatsoever. When you buy gold, it is largely sentiment driven and we see this in the price fluctuations but you also know two other things. 1) Gold does indeed have practical uses. 2) There is currently a finite amount of gold. But for bitcoin: 1) Currently has almost no practical use because a currency which is worth more tomorrow will never truly be used as such (and evidence agrees). 2) There might be a finite amount of bitcoins but there is an infinite number of crypto currencies. But let's examine point 2 for gold. If transmutation was invented and we could cheaply transform (say) hydrogen into gold, what would happen to the price of gold. It would pretty much go to zero. And since there are an infinite number of crypto currencies / coins, where does the value derive from? It will be network effect that picks the winner. I am sure there are many networks that could be improved upon if starting again from scratch. People expect Bitcoin to be a fully functional currency today ignoring the fact it has grown from zero in 8 years. There is still a long way to go but there will be a decentralised, probably anonymous, digital currency that is beyond the reach of government and corporations. It might not be Bitcoin that wins the race but there will be a dominant network that transfers value around the world that is decentralised. Quote Link to comment Share on other sites More sharing options...
miggy Posted June 21, 2017 Share Posted June 21, 2017 (edited) >And since there are an infinite number of crypto currencies / coins, where does the value derive from? There's a large number of chemicals (and elements) with finite supply. Mostly the value is derived from utility but with gold in particular it's from a social agreement that it has an additional value, which leads to speculation. Cryptocurrencies are no different. Indeed, although we could create an infinite amount of cryptocurrencies they wouldn't be protected by an infinite amount of network power so they are not the same. One needs to understand the technology. Bitcoin and Ethereum are by far and away the most secure. Smaller currencies are now either built on top and have other uses, including acting a little more like shares, and other chains also have different use cases completely. In the early days, many Bitcoin clones were created mostly for pump and dump purposes. They still exist for that purpose because people like to gamble. However, despite numerous different cryptocurrencies, they are valued differently for social and technical reasons. The proof is in the pudding - this has been going on for nearly 10 years now. All cryptocurrencies are not the same. Edited June 21, 2017 by miggy Quote Link to comment Share on other sites More sharing options...
doomed Posted June 21, 2017 Share Posted June 21, 2017 9 minutes ago, Bear Hug said: Doesn't bitcoin's ever-increasing value make it "good money" and therefore it is being driven out? Correct but the game is up for fiat. They will not stop printing. Quote Link to comment Share on other sites More sharing options...
ThePrufeshanul Posted June 21, 2017 Share Posted June 21, 2017 Dugsbody is exactly correct and in fact it's basic economics. Two of the ideal characteristics of a currency are that: 1) it has a stable exchange rate 2) it is slightly inflationary otherwise it leads to people hoarding it rather than using it as a means to exchange for goods. And this is exactly what we are seeing with Bitcoin which is exactly why so many people are interested in it. In fact, a "pure" currency is a terrible investment because - on average - it will neither make or lose value since the value gained by every purchaser is offset by the person he then sells it on to (and vice versa). The SEC (Securities and Exchange Commission) recently rejected the trading of a Bitcoin-based ETF (Exchange Traded Fund) that the Vinkelvoss twins had spent three years pushing. Although they are now reviewing the decision, the reason they gave was: "Their values are too volatile and too hard to actually use for payment for most to consider them currencies" Although Bitcoin can be used as a currency, it's almost exclusively currently being used as a separate asset class, mainly as a store of value. Quote Link to comment Share on other sites More sharing options...
scb Posted June 21, 2017 Share Posted June 21, 2017 I am in deep with Bitcoin but I dont see it as anything but an investment and Ill hopefully sell at the top (or somewhere near), I just don't see how it can be a currency unless it does level off one day, but when and why would it? Quote Link to comment Share on other sites More sharing options...
Darby Ram Posted June 21, 2017 Share Posted June 21, 2017 21 minutes ago, ThePrufeshanul said: The SEC (Securities and Exchange Commission) recently rejected the trading of a Bitcoin-based ETF (Exchange Traded Fund) that the Vinkelvoss twins had spent three years pushing. Although they are now reviewing the decision, the reason they gave was: "Their values are too volatile and too hard to actually use for payment for most to consider them currencies" Although Bitcoin can be used as a currency, it's almost exclusively currently being used as a separate asset class, mainly as a store of value. This isn't a quote from the SEC, it's from a Morgan Stanley blockchain paper. The SEC decision was mainly about the lack of regulated trading markets for Bitcoin and the lack of surveillance on those exchanges, which is fair enough as most of the exchanges are shady and, for all we know, trading against their own customers. The 'is it a currency or is it an asset?' debate is, in my opinion, pretty irrelevant at this stage of the game. Right now, it's obviously acting as a hybrid of the two. Two preconditions of moving serious economic value on-chain are scaling (so that you can make currency-like transactions often enough) and stable coins (so that the volatility issue is moot). But if you think that, say, Bitcoin is just a currency or just an asset class, then how do you categorise these, which are secured by the Bitcoin network, but aren't Bitcoins and have independent values? What's cool about this space is that it gets very weird, very quickly - and in a much more interesting way than the canonical digital tulip bulb analogy. Quote Link to comment Share on other sites More sharing options...
adamLancs Posted June 21, 2017 Share Posted June 21, 2017 It's being spent. Not directly on food nor fuel. Not yet. But take ICOs for example. Guess what those companies do? They pay wages, buy plant and equipment, travel costs just like any business. That's all funded from crypto. There is enough money moving around within crypto itself to see that people are looking for avenues of real growth and not just number shuffling. So let's not pretend there is no financial ecosystem developing. I would have believed you 4 years ago. (Although I kind of saw something like this happening back then.) Like anything it will take time. Investments are priced for potential not current progress. This discussion is reminding me of those panning 3d printing maybe 7-10 years ago who are now walking out of hospital with replacement hips using that technology. Yes, when you can walk into Tesco and buy your Andrex toilet tissue with Bitcoin then it will be proclaimed currency. And you might as well be wiping your **** with £ notes at that point. Any investment opportunity will be fading quickly at the time the masses adopt it. Quote Link to comment Share on other sites More sharing options...
evetsm Posted June 22, 2017 Share Posted June 22, 2017 6 hours ago, Bear Hug said: Doesn't bitcoin's ever-increasing value make it "good money" and therefore it is being driven out? Actually Gresham's law refers to money that is decreed to be money only by legal tender laws (fiat) vs sound money. Bitcoin is more a store of value than a currency and that gives it value. It may never be used as a currency, sidechains of bitcoins will probably have that job. Eg. Lightning network. People get confused that bitcoin must be a coffee purchase currency AND a store of value and that proving to be mutually exclusive in crypto. Security and trustlessness comes at a cost that is deemed wothwhile to be a store of value and vice versa for a coffee currency. Quote Link to comment Share on other sites More sharing options...
evetsm Posted June 22, 2017 Share Posted June 22, 2017 Remember when the alt currencies were the next big thing ? Well some said the reason for that was that they just hadn't yet reached the uptake to encounter all the problems bitcoin has because bitcoin was the first mover. Now the chickens are starting to come home to roost. Eg. Ethereums scaling problems are dwarfing those of bitcoin. The eth blockchain storage is already larger than bitcoin's, even though it's years newer than bitcoin, and is set to be 1Tb by the end of the year. Also the transaction backlog is starting to grow. There is no free lunch, no matter the noise level of the hype. Quote Link to comment Share on other sites More sharing options...
ThePrufeshanul Posted June 22, 2017 Share Posted June 22, 2017 9 hours ago, Darby Ram said: This isn't a quote from the SEC, it's from a Morgan Stanley blockchain paper. The SEC decision was mainly about the lack of regulated trading markets for Bitcoin and the lack of surveillance on those exchanges, which is fair enough as most of the exchanges are shady and, for all we know, trading against their own customers. The 'is it a currency or is it an asset?' debate is, in my opinion, pretty irrelevant at this stage of the game. Right now, it's obviously acting as a hybrid of the two. Two preconditions of moving serious economic value on-chain are scaling (so that you can make currency-like transactions often enough) and stable coins (so that the volatility issue is moot). But if you think that, say, Bitcoin is just a currency or just an asset class, then how do you categorise these, which are secured by the Bitcoin network, but aren't Bitcoins and have independent values? What's cool about this space is that it gets very weird, very quickly - and in a much more interesting way than the canonical digital tulip bulb analogy. Thankyou for the correction about the attribution of the quote. I think the debate about how much of a currency/asset Bitcoin is is only relevant in so far as it helps predict how it is used in the real world. I agree that thinsg are both weird, fast-moving and exciting at the moment. Quote Link to comment Share on other sites More sharing options...
goldbug9999 Posted June 22, 2017 Share Posted June 22, 2017 10 hours ago, ThePrufeshanul said: Dugsbody is exactly correct and in fact it's basic economics. ... Although Bitcoin can be used as a currency, it's almost exclusively currently being used as a separate asset class, mainly as a store of value. And this matters because .... Quote Link to comment Share on other sites More sharing options...
miggy Posted June 22, 2017 Share Posted June 22, 2017 (edited) 1 hour ago, evetsm said: Remember when the alt currencies were the next big thing ? Well some said the reason for that was that they just hadn't yet reached the uptake to encounter all the problems bitcoin has because bitcoin was the first mover. Now the chickens are starting to come home to roost. Eg. Ethereums scaling problems are dwarfing those of bitcoin. The eth blockchain storage is already larger than bitcoin's, even though it's years newer than bitcoin, and is set to be 1Tb by the end of the year. Also the transaction backlog is starting to grow. There is no free lunch, no matter the noise level of the hype. Here we go again. Ethereum has never ever claimed to solve the scaling problem today. The only people saying that were big blockers in the bitcoin world, naive idiots who were just in it for money, and bitcoiners who wanted to set up a straw man. I know some of the people planning ethereum scaling and PoS, including Vitalik and Vlad, they simply do not claim what you say. The difference is that ethereum and some other currencies have a clear and socially agreed direction, including for scaling. The cost is a little centralisation in leadership. Take it or leave it. Bitcoin has a stronger decentralised model which is a good thing but not needed in all cases. My nodes don't take anything like 1 TB. One is closer to 80gig and my parity node is almost nothing. Also, the transactions are only hitting 'fun' times' around ICO fever (which had got silly). I can move ether around just fine thanks and have been doing so in the last 24 hours. Once again, criticise ethereum and others for the right things, not the wrong things and stop distorting the facts to suit preconceptions. Btw I spend bitcoin on real life things via xapo Edited June 22, 2017 by miggy Quote Link to comment Share on other sites More sharing options...
ThePrufeshanul Posted June 22, 2017 Share Posted June 22, 2017 "and this matters because..." Asset - price continues to rise, represents a good investment as someone will pay you more than you bought it for, buy some. Currency - price is stable and used as a means of exchanging one thing for another, represents a poor investment as (overall) teh value gained by one party is (overall) lost by another party, don't bother buying. Currently Bitcoin is being used as more of the former than the latter and this should inform your investment strategy. As a goldbug this should actually be quite familiar to you - bitcoin is the "gold" of cryptocurrencies. Other cryptocurrencies are more weighted towards the currency side. Ethereum is like an intermediate functional asset class like coal or oil. Obviously there is overlap amongst all these things but we are talking about generalisable models which helps you determine where you want to put your money. Quote Link to comment Share on other sites More sharing options...
evetsm Posted June 22, 2017 Share Posted June 22, 2017 29 minutes ago, miggy said: Here we go again. Ethereum has never ever claimed to solve the scaling problem today. The difference is that ethereum and some other currencies have a clear and socially agreed direction, including for scaling. The cost is a little centralisation in leadership. Take it or leave it. Ethereum's "clear and socially agreed direction" is a yet to be solved scaling problem far greater than bitcoin and more central control ? Ok , got it. Information data points in the interests of better decision making. Quote Link to comment Share on other sites More sharing options...
miggy Posted June 22, 2017 Share Posted June 22, 2017 (edited) 6 hours ago, evetsm said: Ethereum's "clear and socially agreed direction" is a yet to be solved scaling problem far greater than bitcoin and more central control ? Ok , got it. Other blockchains have an agreed direction for scaling and no blockchain has solved it (or has seriously attempted to in practical terms). No one can actually agree on what Bitcoin is intended to be which makes solving scaling problems harder. Virtually every other blockchain has a more focused leadership than Bitcoin. What you don't seem to want to accept is that it's not black and white. There are a lot of places in between totally centralised control and total decentralisation (which isn't true even of Bitcoin). Adam Back says the same as you because he fails to understand that governance exists all the time, whether one likes it or not. A lack of focus on what a blockchain is meant to do, e.g. Bitcoin, leads to arguments and stagnation. That may be seen as a good thing with regard to a currency but now we're seeing people literally forcing the issue, trying to force change down people's throats one way or the other and with all manner of risks. I will take leadership over the absence of leadership because it gets shit done and I know what to expect when developing a project on that platform. If Bitcoin never changed I would not have a problem with that, but I do think it a risk and I do have a major problem with what's happening right now development wise. As a reminder, I don't think Ethereum is necessarily going to win out in the long term versus version 3 blockchains / distributed technologies. We're in the early days of a long and complex path IMHO. Edited June 22, 2017 by miggy Quote Link to comment Share on other sites More sharing options...
doomed Posted June 22, 2017 Share Posted June 22, 2017 25 minutes ago, miggy said: As a reminder, I don't think Ethereum is necessarily going to win out in the long term versus version 3 blockchains / distributed technologies. We're in the early days of a long and complex path IMHO. I would be interested on your thoughts if you have looked at the project on Tezos. I am still to be convinced on PoS but this seems the first protocol that will be released with backing from credible people. Quote Link to comment Share on other sites More sharing options...
GreenDevil Posted June 22, 2017 Share Posted June 22, 2017 Segwut agreement going down well. Heading back to highs. Quote Link to comment Share on other sites More sharing options...
goldbug9999 Posted June 22, 2017 Share Posted June 22, 2017 (edited) 2 hours ago, doomed said: I would be interested on your thoughts if you have looked at the project on Tezos. I am still to be convinced on PoS but this seems the first protocol that will be released with backing from credible people. I dont get PoS. The proposed Ether version of PoS for example seems to rely on a equitable stake distribution having already been established by some some other pre-PoS means such as er PoW ... doesnt make any sense to me. Edited June 22, 2017 by goldbug9999 Quote Link to comment Share on other sites More sharing options...
doomed Posted June 22, 2017 Share Posted June 22, 2017 Bitcoin is a tool for freeing humanity from oligarchs and tyrants, dressed up as a get rich-quick scheme. (stolen from twitter) Quote Link to comment Share on other sites More sharing options...
goldbug9999 Posted June 23, 2017 Share Posted June 23, 2017 10 hours ago, doomed said: Bitcoin is a tool for freeing humanity from oligarchs and tyrants, dressed up as a get rich-quick scheme. (stolen from twitter) More generally, blockhain technology is a tool for freeing people from "trusted" 3rd parties. Quote Link to comment Share on other sites More sharing options...
miggy Posted June 23, 2017 Share Posted June 23, 2017 (edited) 18 hours ago, doomed said: I would be interested on your thoughts if you have looked at the project on Tezos. I am still to be convinced on PoS but this seems the first protocol that will be released with backing from credible people. Tezos is interesting but I've picked up some negative vibes. The 2 leads have... not acted well with regards to other projects. I don't like people who spend their time dissing others, and it's got quite personal. I also had a run in with them for asking a perfectly sensible question, where they got so defensive it was insane. I was told last week that the team they claim to have are just staff at an outsource firm. I also don't like their token sale model or the various justifications they have given for it & how they plan to use the money. I was also told (not verified) that they personally will be banking a significant amount of the raised funds for themselves personally and that the funds are not just for the company. From my own conversations with them this wouldn't surprise me in the slightest. The tech itself sounds interesting at a high level (not delved into it) and it'll raise a lot of money but the management team are failing to impress. 15 hours ago, goldbug9999 said: I dont get PoS. The proposed Ether version of PoS for example seems to rely on a equitable stake distribution having already been established by some some other pre-PoS means such as er PoW ... doesnt make any sense to me. I need to preface this by saying I haven't gone into the latest details on Ethereum's proposed PoS system but my understanding is it doesn't rely on that. Best person to speak to (or follow) is Vlad. He has a quirky sense of humour and some interesting views that not all in the decentralisation space will agree with, but he's an all round good guy. Very smartk. Edited June 23, 2017 by miggy Quote Link to comment Share on other sites More sharing options...
doomed Posted June 23, 2017 Share Posted June 23, 2017 3 hours ago, miggy said: Thank you for the response. I always have alarm bells that stop me investing in ICO type offerings even if I like the ideas behind them. It just seems people are getting excessively rewarded for minimum effort. Quote Link to comment Share on other sites More sharing options...
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