BitCoins - the Ponzi scheme of the modern era

[vooke]

Plain ponzi. I won't engage in it.

[Nefertiti]

Wait for the dip and buy more. Do not sell.

Government crypto is literal voodoo. Anonymity & decentralized are the key features. Trust MOON Ki to bet on those.

Robina,
Please bail out and get me my iPhone X. Asante

I'm not selling.

[MOON Ki]

I don't quite get that. I can see how some geeks and anti-social types might look at the sexy element, but I never see money solely in such terms ... the sexiness of money.   I'd much rather focus on all the sexy things one can get with real money, including the sexiness of all sorts of real sex.

Beyond real or virtual sexiness, I have some opinions on all this; but let me not jump the gun, given that I do not know your "starting point".   So, before I write a full response to that, I have a couple of questions:

- Do you really mean "privacy", or do you mean "anonymity"?   

- What is it about bitcoin that you think any person or organization might want to match or even pretend to match?

While I await your answers, I'll give you a broad, general opinion: bitcoin has never really been a "medium of exchange as opposed to commodity"; there have never real  prospects that it might ever be; and there are no prospects that it will ever be.   

What is happening with bitcoin right now is actually the best that ever could happen: All sorts of greedy types jumping in, hoping (if they understand what is going on) that they will unload on other suckers before the gravy-train crashes.    I too have considered jumping in for the "free and easy money".   But this lemming rush?   Yes, some people will get rich, but how many will end up crying? 

(By the way, I saw your note on shorting bitcoin, and I too thought it might be an opportunity to clean up.   But it looks like current frenzy will go on for a while and with increasing delays on transactions.  Makes things very tricky.)

[MOON Ki]

Government crypto is literal voodoo. Anonymity & decentralized are the key features. Trust MOON Ki to bet on those.

WTF!   What now.     

See MOON Ki's questions above to vooke.   Feel free to add "anonymity" and "decentralized" to whatever list he comes up with; MOON Ki will give a full "response" to  all.   

MOON Ki has already considered the "anonymity" angle and has a ready response on that one.   For Robina: why do you think the "decentralized" is that important? (Lest I misunderstand you,  perhaps you will also explain what you mean by the term.)

[Nefertiti]

I wonder if MOON Ki sees any point of an option to the status quo. So he needs a thesis to convince him. Don't worry when cars showed up some insisted we must continue riding horses

For starters the various financial crises - Asia in the 90s, entire developed world 2007-09. Poor people in places like Zim are stuck with morons like Bob & Grace to manage their wealth and line up outside banks with gunias to carry useless cash. These are failures of the traditional banking system. Decentralization and anonymity disrupt this system.

No system improves without a challenge. Paypal forced the bankers to digitize in the early 2000s. At first they attacked Paypal viciously before they copy-pasted the model. Paypal's problem was going proprietary - which the cryptocurrency solves by blockchain free patent. There are simply too many hackers, entrepreneurs, investors, etc for the establishment to beat. Any banker with a brain should invest in a crypto-exchange or wallet subsidiary.

[Nefertiti]

Bitcoin and crypto remind me of Kenyan banks resisting M-Pesa a decade ago. Today they are forming Pesalink to defend their dwindling marketshare - a decade too late. I was puzzled to see Safaricom opposing Bitcoin - instead of snapping Bitpesa asap.

[RVtitem]

What will be the effect of futures on bitcoin price... Next few weeks seem uncertain

[MOON Ki]

I wonder if MOON Ki sees any point of an option to the status quo. So he needs a thesis to convince him. Don't worry when cars showed up some insisted we must continue riding horses

For starters the various financial crises - Asia in the 90s, entire developed world 2007-09. Poor people in places like Zim are stuck with morons like Bob & Grace to manage their wealth and line up outside banks with gunias to carry useless cash. These are failures of the traditional banking system. Decentralization and anonymity disrupt this system.

No system improves without a challenge. Paypal forced the bankers to digitize in the early 2000s. At first they attacked Paypal viciously before they copy-pasted the model. Paypal's problem was going proprietary - which the cryptocurrency solves by blockchain free patent. There are simply too many hackers, entrepreneurs, investors, etc for the establishment to beat. Any banker with a brain should invest in a crypto-exchange or wallet subsidiary.

My questions are up there, and I think they are clear enough. (That includes one for you.)   If there are any questions that need clarification, I'd be happy to oblige.   I shall then give my answers.   

By the way, I might not be the best target for the mumbo-jumbo/ill-understood/regurgitation treadmill.  I'll leave that one there for now.

[vooke]

I don't quite get that. I can see how some geeks and anti-social types might look at the sexy element, but I never see money solely in such terms ... the sexiness of money.   I'd much rather focus on all the sexy things one can get with real money, including the sexiness of all sorts of real sex.

Beyond real or virtual sexiness, I have some opinions on all this; but let me not jump the gun, given that I do not know your "starting point".   So, before I write a full response to that, I have a couple of questions:

- Do you really mean "privacy", or do you mean "anonymity"?   

- What is it about bitcoin that you think any person or organization might want to match or even pretend to match?

While I await your answers, I'll give you a broad, general opinion: bitcoin has never really been a "medium of exchange as opposed to commodity"; there have never real  prospects that it might ever be; and there are no prospects that it will ever be.   

What is happening with bitcoin right now is actually the best that ever could happen: All sorts of greedy types jumping in, hoping (if they understand what is going on) that they will unload on other suckers before the gravy-train crashes.    I too have considered jumping in for the "free and easy money".   But this lemming rush?   Yes, some people will get rich, but how many will end up crying? 

(By the way, I saw your note on shorting bitcoin, and I too thought it might be an opportunity to clean up.   But it looks like current frenzy will go on for a while and with increasing delays on transactions.  Makes things very tricky.)

[MOON Ki]

I'm just about to go off go bed, so my dull answer will come tomorrow.   I'm ready on (1) but can't be bothered to type it all right now.  In essence: unless one is a petty criminal with short-term horizons, the bitcoin sort of thing is about dim-witted as one can get.   

On (2), we should perhaps revisit the claim in question on government--issued crypto-currencies.  You "doubt that they can match or even pretend to compete with BTC".   By way of some follow-up questions that would help me with my response:

(i) who decides what's legal tender?
(ii) when, where, and how have crypto-currencies such as bitcoin been declared legal tender?

(The preceding is not for any flipped-up, bizaaro world on which "legal", "anonymous", etc. have the directly-opposed meaning.)

I think it will go way higher than that and keep going for quite some time.

[MOON Ki]

vookehttps://www.reuters.com/article/us-japan-bitcoin/japans-fsa-gives-official-endorsement-to-11-cryptocurrency-exchanges-idUSKCN1C40T9 

One of the first points in the article is related to your (2) and one of my "follow-up" questions:

The Japanese government recognized bitcoin as legal tender in April and required cryptocurrency exchange operators to register with it.

*** Strictly, the article is incorrect: The Japanese laws have admitted the cryptocurrencies as "legal methods of payment", not as "legal tender".    Nevertheless, my point is that any "legality" comes from the government.


A couple of months ago Japanese government announced that it will carry out "full surveillance" on these exchange operators.     The "full surveillance" is about this:

The financial watchdog has laid out various requirements, such as building a strong computer system, segregation of customer accounts and checking the identity of customers, a key issue given concerns cryptocurrency could be used for money-laundering.

The UK and EU also seem to be moving in the same direction:   http://www.businessinsider.com/anti-money-laundering-cryptocurrencies-regulation-eu-uk-identity-2017-12

By the way, there is an amusing element in the Japanese story.  When Mt.Gox collapsed, the same people who had insisted that the government stay out of their funny-money affairs howled painfully about "the government should have done something!", "the government must do something!", etc.  Their pain was quite  understandable: without the sort of "deposit insurance" that governments typically provide for proper banking, their money really was totally gone.  The theft was also amusing in terms of the "crypto" part.   

Anyways ... back on track:

(1) Governments get to decide whether or not users of cyptocurrencies (including bitcoin) get to stay anonymous

(2) Government gets to decide what is and what is not legal tender.  And that includes bitcoin.

So, can a government "match or even pretend to compete with BTC"?

[vooke]

Moonki,
I will make time later today and respond to your detailed post.

Asante and great week ahead

[RV Pundit]

How liquid is bitcoin? If today I had 1B dollars worth of it - can I liquidate it to cash? Or it just like I suspect some make-belief nonsense where everyone is punting hoping to win and leave someone else without his shirt.

[MOON Ki]

Moonki,
I will make time later today and respond to your detailed post.

Asante and great week ahead

One more for those who believe in "anonymity" and "government out!":   a US federal judge has decided that if it looks like your US transactions in bitcoin might be worth taxing, then the government has a right to know who you are:    http://fortune.com/2017/11/29/irs-coinbase/

Court order: https://www.scribd.com/document/365893210/US-v-Coinbase-order#fullscreen&from_embed

(A key point in the order are the IRS requests that have been denied.   The denial is only "at this stage", and it seems apparent that the IRS can repeat the same intrusive requests once it has gone through the list of possible mischief-makers and narrowed it down.)

And there's an amusing side-note there:  the IRS gets its initial information from Chainalysis, a bunch of electronic sleuths who look at the bitcoin blockchain, which is public.   So, the very thing that facilitates the "decentralized, government-free money" is a handy tool for getting information on  suspicious people!

In yet other news, hackers again ignore the "crypto" in "cryptocurrency" and make off with plenty of good stuff:   http://www.bbc.com/news/technology-42275523

[Empedocles]

Anyone watching Litecoin (LTC)?

[Nefertiti]

This would take a couple of days due to heavy trading by speculators. This is pure logistical - imagine 100m folks suddenly trading the shilling. At $20 fees. The free bitcoins would be bought immediately. A few days ago there were panic sales - at 12k usd. Now it's at 17k usd.

People are trading heavy all the time and overloading the network. They get real cash. It's speculation not make-believe.

How liquid is bitcoin? If today I had 1B dollars worth of it - can I liquidate it to cash? Or it just like I suspect some make-belief nonsense where everyone is punting hoping to win and leave someone else without his shirt.

[bryan275]

Anyone watching Litecoin (LTC)?

Yes yes yes... The moonshot is finally here.

[bryan275]

Moonki,
I will make time later today and respond to your detailed post.

Asante and great week ahead

One more for those who believe in "anonymity" and "government out!":   a US federal judge has decided that if it looks like your US transactions in bitcoin might be worth taxing, then the government has a right to know who you are:    http://fortune.com/2017/11/29/irs-coinbase/

Court order: https://www.scribd.com/document/365893210/US-v-Coinbase-order#fullscreen&from_embed

(A key point in the order are the IRS requests that have been denied.   The denial is only "at this stage", and it seems apparent that the IRS can repeat the same intrusive requests once it has gone through the list of possible mischief-makers and narrowed it down.)

And there's an amusing side-note there:  the IRS gets its initial information from Chainalysis, a bunch of electronic sleuths who look at the bitcoin blockchain, which is public.   So, the very thing that facilitates the "decentralized, government-free money" is a handy tool for getting information on  suspicious people!

In yet other news, hackers again ignore the "crypto" in "cryptocurrency" and make off with plenty of good stuff:   http://www.bbc.com/news/technology-42275523

These moves now expose the underbelly of bitcoin and other pritected-by-public-blockchain crypto.  This is a good thing for truly private coins.

[Empedocles]

This would take a couple of days due to heavy trading by speculators. This is pure logistical - imagine 100m folks suddenly trading the shilling. At $20 fees. The free bitcoins would be bought immediately. A few days ago there were panic sales - at 12k usd. Now it's at 17k usd.

People are trading heavy all the time and overloading the network. They get real cash. It's speculation not make-believe.

How liquid is bitcoin? If today I had 1B dollars worth of it - can I liquidate it to cash? Or it just like I suspect some make-belief nonsense where everyone is punting hoping to win and leave someone else without his shirt.

I'd have to disagree here. Liquidating $1b worth of bitcoin at once would seriously crash the market (that's trying to sell over 58'000 bitcoins at once). In anycase, not even Coinbase would allow that kind of volume (current daily bitcoins traded worldwide is about 112'000 valued at $1.8b).

The best way to go about it would be liquidating a few tens of bitcoins on a weekly basis. I'll not even bother going into the problems when that kind of money starts landing in ones bank account.

[Empedocles]

Anyone watching Litecoin (LTC)?

Yes yes yes... The moonshot is finally here.

Yeah, it's great but don't get too excited (I know it's hard not to  ). This is what the developer of Litecoin had to say:

Ok, sorry to spoil the party, but I need to reign in the excitement a bit...

Buying LTC is extremely risky. I expect us to have a multi-year bear market like the one we just had where LTC dropped 90% in value ($48 to $4). So if you can't handle LTC dropping to $20, don't buy! 😀

— Charlie Lee Ⓜ️🕸️ (@SatoshiLite) December 11, 2017