Bitcoins - fad or trend?

[Brick's]

ZH: Bitcoin ETF "Nearly Certain" To Win Approval Later This Year
https://www.zerohedge.com/news/2018-07-23/bitcoin-etf-nearly-certain-win-approval-later-year

'Bout time and way overdue for the general public. Would have been my first foray into Crypto given the choice. But then I wouldn't have been this far up on the learning curve if I had. Ever still the Tard but where I am in spite of my self.

[Bucketeer]

ZH: The Cryptocurrency Insurance Business Is Booming
https://www.zerohedge.com/news/2018-07-22/cryptocurrency-insurance-business-booming

[Bucketeer]

MarketWatch: Here’s the case against day-trading bitcoin.
https://www.marketwatch.com/story/heres-the-case-against-day-trading-bitcoin-2018-07-24

[Bucketeer]

Forbes: Bitcoin Just Hit $8,000 -- Here's What's Pushing It Up
https://www.forbes.com/sites/billybambrough/2018/07/24/bitcoin-just-hit-8000-heres-whats-pushing-it-up/

[Bucketeer]

Business Insider: Bitcoin king Mike Novogratz leads $52 million investment in crypto-lending startup
https://www.businessinsider.com/bitcoin-king-novogratz-invests-in-crypto-lender-2018-7

[Bucketeer]

The Hill: Bitcoin will have ups and downs, but you can expect it to surge in years ahead
http://thehill.com/opinion/technology/398408-bitcoin-will-have-ups-and-downs-but-you-can-expect-it-to-surge-in-years

[Bucketeer]

[Force Majeure]

I wouldn't classify BitCoin as honest money in the true sense of what that means.

This is a semantics game around what you deem "honest money" and until you clarify your terms, it is just a matter of opinion.

Yes it is transparent, but its only intrinsic value is in its utility, and its utility can be circumvented by all the copycats.

Incorrect, but again we get back to the semantics of intrinsic value. Those against PMs would argue that you can't eat gold and therefore it has no intrinsic value. Copycats are of minimal concern. Every year that goes by that somebody tries to "invent the new bitcoin" is yet another year under bitcoin's belt where it has lasted as the most secure, most developed crypto. And it is a free market. If ETH or some other crypto overtakes bitcoin one day, that is fine. We can swap to that. In the crypto world that is as easy as hitting a few keys on a computer or phone.

And although those copycats clearly indicate a trend, not a fad, that doesn't bode very well for BitCoin which will lose all its miners as soon as there are no more free coins to mine.

Incorrect. Miners make fees from the emission of bitcoin (currently 12.5 bitcoin about every 10 minutes), and from the fees of all the transactions in each block. In a couple hundred years, when no further bitcoins are emitted, the miners will continue work for the fees in the transactions in each block. The bitcoin emission rate halves every 4 years. This has been a trend since the January 2009 when bitcoin's genesis block began. Mining is profitable based on the electricity costs, hashrate, difficulty parameters (which adjust about every 2 weeks), and the number of competing miners.

Nor does it bode well for any specific cryptocurrency which will continue to lose market share to a growing number of copycats.

Market share is not an important metric. This is a network where the number of users on the system is what gives it value, not profits, earnings, or cash flow statements. Bitcoin could have a 5% market share of the crypto market and it is of no concern.

Not to mention all the energy it takes to mine that is now causing local power companies to lease out their power to the highest bidder so that people don't move in from out of area to exploit low electricity prices. The days of cheap mining are gone, and unless people are taking profits like they should be, all an investment in BitCoin really amounts to is furthering the cashless society.

This is the big scare argument... all the electricity. Come back to this in 10 years and let's see if these scare predictions hold any water. 2nd and 3rd generation cryptos are already converting to other consensus mechanisms that don't require Proof of Work levels of electricity. As to a cashless society, we are nearly there already. Crypto actually has the ability to be cashless and private, whereas today cashless = every transaction tracked through a third party (bank, credit card, etc) who has the power to not allow transactions for any reason whatsoever.

The youths may not rail against their phones spying on them as they use a fully tracked digital currency on a device that tracks their GPS coordinates and listens in on their conversations, but anybody dumb enough to give away their freedom probably isn't going to earn a good income either. Cryptos will be the currency used by debt slaves once fiat currency gives up the ghost.

Debt slaves? This makes no sense. Are there any lending institutions creating bitcoin out of thin air, and lending it as a fractional reserve currency? Bitcoin is debt free by design, with a known quantity, that can't be inflated due to the corrupt political whims of "benevolent" leaders.

Precious metals are money.

Hey, we agree on something!

They really have nothing in common other than that they are both functional currencies and neither one is endorsed by the current establishment, but they are making their own copycats very soon.

Currently, the establishment can much more easily manipulate (suppress) prices of PMs than cryptos. Until PM deliveries actually fail to be made, TPTB can naked short paper metals all day every day with no consequence from government officials. One needs to own the bitcoin to short it (or have a well funded margin account), and on the bitcoin futures markets - those contracts are settled in dollars - they own no bitcoin. The bitcoin price discovery happens on each individual exchange: Coinbase, BitMex, Bitfinex, Kraken, etc, etc unlike PMs.

Semantics game? Not my intention. Honest money, gold and silver, is honest because it can't be defaulted on, can't be inflated away, and has intrinsic value. BitCoin doesn't have intrinsic value beyond its utility and a few electrons, and its utility is far from exclusive. Intrinsically it's about as valuable as a text file, but speculatively the price has gone far beyond that. Gold and silver have intrinsic value not because of their utility, but because of their composition.

There are no semantics around the definition of intrinsic. Feel free to look it up, and I would request you stop interjecting ambiguity into my statements which are quite clear. In one side of your mouth you say it's a matter of opinion, yet out the other side you say I am wrong. Which is it? You are all over the place with blind fervor in defense of your blind devotion.

Whether or not miners can get some dividend from performing processing after no more BitCoins can be generated, they will most certainly get a higher dividend from a cryptocurrency that can generate new coins vs. one that must pull from existing supply (someone must relinquish vs. creation from thin air). This is just common sense based on the path of least resistance.

Market share not being an important metric is purely a matter of opinion. You seem to engage in the very behavior you are attempting to project onto me. What you don't seem to have acknowledged is that there is no limit to the number of cryptocurrencies that may come into existence, and there is only so much global utility for the cryptocurrency space. Again it is simply common sense that something profitable will have copycats, and there is nothing to stop them from diffusing the market share among an ever growing number of competing protocols vying for the same space.

Big scare argument? I'm not familiar with that. Again you seem to be conflating what I am saying with your own separate perceptions. I read an article about how a neighboring county of mine is having to increase prices because miners are literally moving into the area and driving up prices for locals. Higher prices aren't anything to be afraid of, but they aren't exactly convenient. It's not a prediction, simply a fact of life for my community in the present. Crypto has the ability to be private, sure, but it also has the ability to be fully tracked. The fully tracked part can't exist without the underlying infrastructure. And you can't use the underlying infrastructure without a contract with an ISP. If you think ISPs are somehow immune from government coercion, my opinion is that they are not.

The reason I liken BTC users to debt slaves is because only a debt slave would require on-the-grid capabilities to maintain their standard of living. In other words a debt slave will require the use of BTC or its ilk to survive once fiat currency is no more whereas those of us with real wealth will be perfectly functional and viable without dependency on electricity or an ISP or an external group of online users to validate a transaction. None of this is required with honest money. Honest money doesn't require checks and balances.

I find it ironic that you have such confidence that BitCoin will have value in a couple hundred years, when we have proof that precious metals have had value for far longer than that, and yet BitCoin is barely 10 years old. That's a lot of confidence without much track record. Not something I would feel comfortable putting my hard earned wealth into, but if people are going to gamble with their money they could certainly do worse than cryptos.

[Bucketeer]

At one time, Spain held most of the above-ground gold, and yet it inflated itself from a world leader into a world follower.

[jcz1]

I read an article about how a neighboring county of mine is having to increase prices because miners are literally moving into the area and driving up prices for locals.

Is there an online version of this article that you can link us to?

[SilverDoge]

Semantics game? Not my intention. Honest money, gold and silver, is honest because it can't be defaulted on, can't be inflated away, and has intrinsic value. BitCoin doesn't have intrinsic value beyond its utility and a few electrons, and its utility is far from exclusive. Intrinsically it's about as valuable as a text file, but speculatively the price has gone far beyond that. Gold and silver have intrinsic value not because of their utility, but because of their composition.

There are no semantics around the definition of intrinsic. Feel free to look it up, and I would request you stop interjecting ambiguity into my statements which are quite clear. In one side of your mouth you say it's a matter of opinion, yet out the other side you say I am wrong. Which is it? You are all over the place with blind fervor in defense of your blind devotion.

Whether or not miners can get some dividend from performing processing after no more BitCoins can be generated, they will most certainly get a higher dividend from a cryptocurrency that can generate new coins vs. one that must pull from existing supply (someone must relinquish vs. creation from thin air). This is just common sense based on the path of least resistance.

Market share not being an important metric is purely a matter of opinion. You seem to engage in the very behavior you are attempting to project onto me. What you don't seem to have acknowledged is that there is no limit to the number of cryptocurrencies that may come into existence, and there is only so much global utility for the cryptocurrency space. Again it is simply common sense that something profitable will have copycats, and there is nothing to stop them from diffusing the market share among an ever growing number of competing protocols vying for the same space.

Big scare argument? I'm not familiar with that. Again you seem to be conflating what I am saying with your own separate perceptions. I read an article about how a neighboring county of mine is having to increase prices because miners are literally moving into the area and driving up prices for locals. Higher prices aren't anything to be afraid of, but they aren't exactly convenient. It's not a prediction, simply a fact of life for my community in the present. Crypto has the ability to be private, sure, but it also has the ability to be fully tracked. The fully tracked part can't exist without the underlying infrastructure. And you can't use the underlying infrastructure without a contract with an ISP. If you think ISPs are somehow immune from government coercion, my opinion is that they are not.

The reason I liken BTC users to debt slaves is because only a debt slave would require on-the-grid capabilities to maintain their standard of living. In other words a debt slave will require the use of BTC or its ilk to survive once fiat currency is no more whereas those of us with real wealth will be perfectly functional and viable without dependency on electricity or an ISP or an external group of online users to validate a transaction. None of this is required with honest money. Honest money doesn't require checks and balances.

I find it ironic that you have such confidence that BitCoin will have value in a couple hundred years, when we have proof that precious metals have had value for far longer than that, and yet BitCoin is barely 10 years old. That's a lot of confidence without much track record. Not something I would feel comfortable putting my hard earned wealth into, but if people are going to gamble with their money they could certainly do worse than cryptos.

If you haven't read the bitcoin beginner thread, I would recommend starting there: http://www.bullionstacker.com/viewtopic.php?f=108&t=28780 as many of the issues you are bringing up have been discussed already.

Your biases are flashing brightly. Your statements: "[I have a] blind fervor in defense of your blind devotion" and "a debt slave will require the use of BTC or its ilk". One can search all my posts here at BS. I was into PMs long before bitcoin, and I still believe in stacking both as I can't know the future or how society will adapt. Some believe we might go back to bartering PMs, and others believe we are on the verge of a technological breakthrough with crypto, AI, virtual reality, artificial reality, nano-technologies, etc. Go talk to anyone under 25 years old about going back to bartering PMs to trade goods. That will be an interesting conversation. But talk to them about an honest money, where no central authority (corrupt government) controls it, no third party (bank) can stop a transaction, and show them how to digitally set up an online wallet on their phone. That they can understand. So what is the future?

While one can't default on gold or silver, it can be faked, diluted, clipped, or many other methods of scam as many here are well aware. You can drone on about intrinsic value all you like, but unless a person, or businesses wants to trade other currencies, goods or services for the silver or gold you hold, it is essentially worthless. Yes, silver is used in numerous industries, and therefore businesses need it - but if silver did not exist or became too cost prohibitive, companies would switch to the next best element (where possible). For another view on intrinsic value of bitcoin, see this post (specifically point 4, from part 2): http://www.bullionstacker.com/viewtopic.php?f=108&t=28780&start=60#p560471

Point #6 in that post also elaborates on value. Specifically network value. Your objection about an infinite number of cryptos can be easily created seems valid. As I've previously noted however in this post: http://www.bullionstacker.com/viewtopic.php?f=108&t=15864&start=1460#p546239 and others - the value is in the network. If nobody is using 95% of the cryptos created, they have little to no value. Not all crypto is trying to act as money (medium of exchange). Money is merely the first application of blockchain technology.

You talk of miners moving on to mining other cryptos as "common sense" because they can potentially make more money. Perhaps. But money isn't the only concern for a miner. They need to worry about market depth, liquidity, and long term viability. Bitcoin is the backbone of this space and the miners know that. If some abandon mining bitcoin, it merely becomes more profitable for those who remain mining. This dynamic model of incentives was created on purpose and there is a team of open source developers who can adapt the network with consensus when necessary. See all the developments thus far (bitcoin improvement proposals): https://github.com/bitcoin/bips

Do I have confidence that bitcoin will be around in 100 years? Yes. I don't know what the price will be, and why I always suggest that nobody put any more money into bitcoin than they are 100% comfortable losing completely. Fortunes can be made and lost when disruptive technology upends the status quo. Most people will be skeptical and watch it happen, and adopt to it after the masses have jumped aboard. I was lucky to get into crypto earlier than most because it has a large libertarian draw. That was the second wave after the tech nerds brought it into existence. I wasn't sold on it at first due to many of the same objections we see today. I passed on bitcoin when it was about the price of one ounce of silver over five years ago. That was a costly mistake, but I didn't stop researching. The information is out there for those willing to do the deep dive.

[SilverDoge]

NFL Players Union partners with blockchain startup. Slowly we see blockchain technology coming into the mainstream:
https://www.coindesk.com/national-football-league-union-partners-with-blockchain-startup/

[tdtwedt]

Bitcoin Use For Consumer Purchases Craters 85% In 8 Months

Bitcoin's use as a medium of exchange has cratered over the last year, dropping from a high of $411 million in transactions last September to a "scant" $60 million in May across the largest 17 crypto merchant-processing services, according to research conducted for Bloomberg by firm Chainalysis.

https://www.zerohedge.com/news/2018-08- ... 5-8-months

[SilverDoge]

Bitcoin Use For Consumer Purchases Craters 85% In 8 Months

Bitcoin's use as a medium of exchange has cratered over the last year, dropping from a high of $411 million in transactions last September to a "scant" $60 million in May across the largest 17 crypto merchant-processing services, according to research conducted for Bloomberg by firm Chainalysis.

https://www.zerohedge.com/news/2018-08- ... 5-8-months

This makes sense from a Gresham's Law perspective. If I use to be able to get 10-15 ounces of gold for 1 bitcoin (as just one example) but today I can only get 6 ounces, many people will choose an alternative currency or hold off on the purchase until they get more bang for their buck.

From the article: "the fees to process a transaction in Bitcoin can be steep and varied -- they peaked at $54 in December, but are down to less than $1 today -- not many people are using the coins for small transactions, like buying a cup of coffee. They are spending the virtual currency more to pay vendors like freelancers located overseas: For those cases, using Bitcoin can be cheaper and faster than using traditional financial services."

So fees are much better today. Obviously a plus.

And then this: ""In the last six months we’ve seen a large uptick in crypto companies paying their vendors in Bitcoin, including law firms, hosting companies, accounting firms, landlords and software vendors," says Sonny Singh, chief commercial officer at processor BitPay - which has seen a 500x increase in crypto companies paying their bills over last year."

BitPay is the leading authority on this. A 500x increase in crypto companies paying their bills. This is how organic growth starts. Fortune 500 companies aren't the first to adopt crypto. It is the smaller companies wanting to disrupt the big boys, who have the innovation and freedom to do this stuff. Of course some vendors will convert all their BTC to cash, but others will keep a portion in BTC.

Sometimes it pays to read beyond just the headline of an article.

[Southpaw]

ICE, owner of New York Stock Exchange, just announced a global platform to "enable consumers and institutions to seamlessly buy, sell, store and spend digital assets."



https://www.businesswire.com/news/home/ ... -Ecosystem

[jcz1]

Bitcoin Use For Consumer Purchases Craters 85% In 8 Months

Bitcoin's use as a medium of exchange has cratered over the last year, dropping from a high of $411 million in transactions last September to a "scant" $60 million in May across the largest 17 crypto merchant-processing services, according to research conducted for Bloomberg by firm Chainalysis.

https://www.zerohedge.com/news/2018-08- ... 5-8-months

This time frame is not helpful, as BTC went up from September to December, and mostly declined into May. I would find it more interesting to see consumer use as BTC went up in value, and then as it went down. A monthly chart would be more useful than this broad data set.

[tdtwedt]

Over $9 billion wiped off bitcoin's value after SEC postpones key decision on a cryptocurrency ETF

The price of bitcoin fell sharply on Wednesday.

It comes after the Securities and Exchange Commission postponed its decision on whether it would approve a bitcoin exchange-traded fund (ETF) proposed by VanEck and SolidX.

https://www.cnbc.com/2018/08/08/bitcoin ... ision.html

[Bucketeer]

Coi9ntelegraph: US DEA: Criminal Activity in Cryptocurrency Has Dropped 80 Percent Since 2013
https://cointelegraph.com/news/us-dea-criminal-activity-in-cryptocurrency-has-dropped-80-percent-since-2013

[Silversaving]

Rough day today boys. Hang in there.

[300Braveheart]

Just a marathon of sucker punches in the nuts. But it's always gonna be tomorrow!