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Bitcoin discussion and news

There's probably a fundamental value, but looking at that graph it's not pretty.

It's basically a casino currency if you hold onto it. People sinking money into it for ideological reasons, have more in common with the derivatives traders (that they might claim to despise), than they will admit.
 
Kind of equivalent to a bank or currency exchange being robbed online? I should imagine it'll frighten more people than ever from using bitcoins when they see headlines like that...bitcoins are a great idea however I think it might take a while for virtual money to gain mass acceptance
 
Eggby said:
Kind of equivalent to a bank or currency exchange being robbed online? I should imagine it'll frighten more people than ever from using bitcoins when they see headlines like that...bitcoins are a great idea however I think it might take a while for virtual money to gain mass acceptance
Click to expand...

The anonymity is great. But in practice it's capitalism at it's utter worst.

I think some people underestimate the value of a central bank, that can tweak supply, interest rates etc, to (attempt) to keep stability.

The average man or woman doesn't much fancy the idea of losing half their life savings whilst they popped out to lunch or went away for a weekend.

"Yeah, I mean I lost everything I saved for ten years, but it's like crypto against the man, amaaazing... and this other dude I know, he yeah like made millions, and yeah I don't see him anymore - he still owns most of the property round here - but he made it maaaan, bitcoin is so cool! Maybe that can happen to me!"
 
Eggby said:
Kind of equivalent to a bank or currency exchange being robbed online? I should imagine it'll frighten more people than ever from using bitcoins when they see headlines like that...bitcoins are a great idea however I think it might take a while for virtual money to gain mass acceptance
Click to expand...
It's no less real than any other 'money'. What is a pound?
paolo said:
The anonymity is great. But in practice it's capitalism at it's utter worst.

I think some people underestimate the value of a central bank, that can tweak supply, interest rates etc, to (attempt) to keep stability.

The average man or woman doesn't much fancy the idea of losing half their life savings whilst they popped out to lunch or went away for a weekend.

"Yeah, I mean I lost everything I saved for ten years, but it's like crypto against the man, amaaazing... and this other dude I know, he yeah like made millions, and yeah I don't see him anymore - he still owns most of the property round here - but he made it maaaan, bitcoin is so cool! Maybe that can happen to me!"
Click to expand...
The Russian central bank isn't doing a much better job than BitCoin in propping up their currency.

Money itself is the problem; not the form it takes.
 
Fez909 said:
Money itself is the problem; not the form it takes.
Click to expand...

But yes, tbf, you're not saying Bitcoin is the answer.

I guess I'd argue that money itself isn't the problem (it's just a more versatile form of barter), it's how money is used (invested, traded) in today's world.
 
paolo said:
But yes, tbf, you're not saying Bitcoin is the answer.

I guess I'd argue that money itself isn't the problem (it's just a more versatile form of barter), it's how money is used (invested, traded) in today's world.
Click to expand...
Yeah, I'm no Bitcoin nut. I've never owned a Bitcoin in my life. Although I have a few thousand DogeCoin :D:oops:

The fact that money can be invested is what makes it a bad exchange mechanism, surely? That's Bitcoin's problem as well. When the price is going up, everyone holds on as to sell today is to lose money for doing nothing. Then after the crash everyone is so scared of holding Bitcoin that it makes it useless as an exchange currency, too.

I suppose that's where your stability with a central bank argument proves itself...
 
Fez909 said:
Yeah, I'm no Bitcoin nut. I've never owned a Bitcoin in my life. Although I have a few thousand DogeCoin :D:oops:

The fact that money can be invested is what makes it a bad exchange mechanism, surely? That's Bitcoin's problem as well. When the price is going up, everyone holds on as to sell today is to lose money for doing nothing. Then after the crash everyone is so scared of holding Bitcoin that it makes it useless as an exchange currency, too.

I suppose that's where your stability with a central bank argument proves itself...
Click to expand...

Yeah that's my rough gist.

The average person doesn't, I'm guessing, empathise with speculators (be it Bitcoins, sterling, or London property say). Their basic financial hope is that they don't get shredded by no fault of their own.
 
paolo said:
But yes, tbf, you're not saying Bitcoin is the answer.

I guess I'd argue that money itself isn't the problem (it's just a more versatile form of barter), it's how money is used (invested, traded) in today's world.
Click to expand...

Hmm.

After the banking crisis there was serious talk of separating out:
  • "retail" banking (a public utility providing pipes for value)
  • so-called "investment" banking (speculation)
What would life be like in a parallel universe where the utility and speculation functions were conducted in different currencies, insulated from each other?
 
laptop said:
What would life be like in a parallel universe where the utility and speculation functions were conducted in different currencies, insulated from each other?
Click to expand...

What would be the point in speculating if you could only win more money to speculate with? Sooner or later you need to cash in your tokens.
 
Another Varoufakis post (from last year, but I guess he's been busy lately) about digital currencies that I don't think has been discussed here yet:

More broadly, there is a terrible disconnect between BTC enthusiasts and economists. Economists do not understand the ground-breaking potential of the BTC algorithm (one which I plan to write about extensively in the future). At the same time, BTC enthusiasts are relying on a primitive theory of money. It is important to bridge that chasm – for the sake both of economists and of BTC enthusiasts.

In an attempt to effect this ‘bridging’ a few comments are in order: Recall that people want to hold a currency for two reasons: one is to use it to buy stuff with (Nb. this is called the ‘transactions demand for money’). The other is for speculative reasons – for instance, you buy yen because you think that the yen-dollar rate will go up (the so-called ‘speculative demand for money’). BTC activity is, to date, mainly of the ‘speculative demand’ type.

Currencies, that are growing as currencies, are typified by a rapidly increasing ‘transactions demand’ which reflects growing real economic activity transacted with this currency. But the bulk of the growth in demand for BTC is speculative (only a tiny and, indeed, falling proportion of BTCs is used to buy stuff), indicating that, while BTC may be an asset, it is no currency. To paraphrase Keynes, it is a bubble on a whirlpool of speculation, rather than a growing stream of enterprise.
Click to expand...

http://yanisvaroufakis.eu/2014/03/1...itcoin-can-and-cannot-offer-a-troubled-world/
 
Surely that much was always obvious?

People almost exclusively don't buy BTC for its spending utility, with the exception of people up to something dubious, they buy it because they think it'll keep going up, just like tulips or crap AIM shares or whatever else.
 
There seems to be a lot of interest lately in the so-called 'FinTech' community about other uses for the blockchain algorithm, rather than visions of bitcoin becoming a viable replacement for traditional currency. A variety of other interesting things are going on in this general area.

Accenture just released a report for the BBA about the disruptive potential of this stuff. https://www.bba.org.uk/news/reports/digital-disruption-uk-banking-report/

It seems like it might be something to keep an eye on for all kinds of reasons:
Although it is a challenge for banks, perhaps more importantly for the economy, customers and wider society, it is also a challenge for regulators and legislators. Banking regulation has quite rightly been tightened to ensure financial stability and to prevent a repeat of misconduct, such as mis-selling or breaches of money laundering regulations. But generally, digital firms are not regulated and don’t have to abide by the same rules. The danger is that the digital revolution will simply lead to misconduct and financial instability exploding outside the regulated banking sector in the unregulated digital sector.

If you think this won’t happen, consider the salutary story of pay day lenders. High risk, high interest, short term lenders have existed since biblical times, but when they operated manually going door to door their scale was small. Banks are basically prevented from this market because they are quite rightly only allowed to lend to people they have checked can repay the loan. Payday lenders such as Wonga were essentially highly innovative digital start-ups, which embraced the internet and data mining, but were unconstrained by banking regulation. It was an explosive mixture, and tens of thousands of people ended up in high-debt misery.
Click to expand...
https://www.bba.org.uk/news/bba-voi...on-is-required-for-banks-digital-challengers/
 
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Bernie Gunther said:
Another Varoufakis post (from last year, but I guess he's been busy lately) about digital currencies that I don't think has been discussed here yet:



http://yanisvaroufakis.eu/2014/03/1...itcoin-can-and-cannot-offer-a-troubled-world/
Click to expand...

That's exactly the point I made on this thread waaaaaay back in 2011:

kabbes said:
I think the point is that it's just another reminder that this is a stock, not a currency. They're fundamentally different. Using bitcoins to pay with is no different to using any stock you like as your payment method, with all the advantages and disadvantages that a bartering system brings.
Click to expand...
 
Yep.

I've started getting interested in this stuff again because it seems like the predatory leading edge of capitalist innovation is starting to get past the initial hype and is actively coming up with ways of using e.g. blockchain technologies and other so-called 'FinTech' concepts, probably to screw the rest of us over, if the past is any guide here.
 
See e.g. http://www.accenture.com/Microsites...centure-Global-Boom-in-Fintech-Investment.pdf

Global investment in financial technology (‘fintech’) ventures has more than tripled during the last five years – from under $930 million in 2008 to more than $2.97 billion in 2013 (see Figure 1). Given the dramatic changes occurring in financial services, driven by new technology, regulations, consumer behaviour, and the need for cost reduction, this global trend is expected to continue for the foreseeable future. This growth represents a significant opportunity for London. Accenture’s analysis of fintech venture investment shows the city has become the fintech capital of Europe. Since 2004, the lion’s share of Europe’s fintech deals and financing have taken place in the UK with the vast majority occurring in London.
Click to expand...

I wonder though, does this warrant a new thread on FinTech in general?
 
Bernie Gunther said:
Yep.

I've started getting interested in this stuff again because it seems like the predatory leading edge of capitalist innovation is starting to get past the initial hype and is actively coming up with ways of using e.g. blockchain technologies and other so-called 'FinTech' concepts, probably to screw the rest of us over, if the past is any guide here.
Click to expand...

lol, yeah... "starting to get past the initial hype and is actively coming up with ways-" in 2013.

Were you one of the people back then still stuck on how it's all a flash in the pan scam? Loads of people have been saying this is deeply disruptive technology for ages but mostly running into people who can't get past the magic-bean thing. Good to see you paying attention now because yes, crypto is one of the vectors for the the haves having and the have-nots not having going forward. It we're all up to speed can we finally start the conversation on "a new blockchain-marxism" or something now?

(actually, "blockchain-marxism" would be the same as the old marxism really, sounds swish though).
 
Bernie Gunther said:
See e.g. http://www.accenture.com/Microsites...centure-Global-Boom-in-Fintech-Investment.pdf

I wonder though, does this warrant a new thread on FinTech in general?
Click to expand...
Apart from the fact that you can't ever trust Accenture with anything, fintech ain't bitcoin. Really it's just financial services with a not particularly convincing frock, so if you're overly keen to use buzzwords, Paypal and VISA are certainly fintech, as is anyone working in trading algorithms, or retail punter CFD platforms, or basically anything. Doesn't mean anything at all (I could leave it there) for crypto-currency.

camouflage said:
lol, yeah... "starting to get past the initial hype and is actively coming up with ways-" in 2013.

Were you one of the people back then still stuck on how it's all a flash in the pan scam? Loads of people have been saying this is deeply disruptive technology for ages but mostly running into people who can't get past the magic-bean thing. Good to see you paying attention now because yes, crypto is one of the vectors for the the haves having and the have-nots not having going forward. It we're all up to speed can we finally start the conversation on "a new blockchain-marxism" or something now?

(actually, "blockchain-marxism" would be the same as the old marxism really, sounds swish though).
Click to expand...
What evidence do you have that it isn't a flash in the pan speculative sine wave? Speculation can run for years, so it's not a matter of how long it's survived. I don't see it gaining traction anywhere significant outside speculative trading, mostly retail punters, and even that has largely fallen back. The only other people with significant interest are those who want to be able to write about it or make indirect gains out of it existing.
 
mauvais said:
Apart from the fact that you can't ever trust Accenture with anything, fintech ain't bitcoin. Really it's just financial services with a not particularly convincing frock, so if you're overly keen to use buzzwords, Paypal and VISA are certainly fintech, as is anyone working in trading algorithms, or retail punter CFD platforms, or basically anything. Doesn't mean anything at all (I could leave it there) for crypto-currency.

What evidence do you have that it isn't a flash in the pan speculative sine wave? Speculation can run for years, so it's not a matter of how long it's survived. I don't see it gaining traction anywhere significant outside speculative trading, mostly retail punters, and even that has largely fallen back. The only other people with significant interest are those who want to be able to write about it or make indirect gains out of it existing.
Click to expand...

That's all well and good and the stuff of a decent discussion, for instance the idea that this is a wave that could last decades makes cryptocurrency worth taking seriously, some would argue that the whole petroleum economy that we have going now is an unsustainable bubble, but to fail to get further with a discussion of petroleum-based tech then "snot based o'nuffin init, lol" would be an error.
 
camouflage said:
That's all well and good and the stuff of a decent discussion, for instance the idea that this is a wave that could last decades makes cryptocurrency worth taking seriously, some would argue that the whole petroleum economy that we have going now is an unsustainable bubble, but to fail to get further with a discussion of petroleum-based tech then "snot based o'nuffin init, lol" would be an error.
Click to expand...
I don't think it necessarily does make it worth taking seriously. How seriously do you take retail-oriented forex trading platforms, for instance? Or the small cap share market? Both are aimed at the get-rich-quick punter and both are generally aimed at extracting their money. Both are interesting trends in themselves but the significance doesn't extend very broadly. IMO bitcoin is predominantly another example of this, albeit with different actors behind it.

You compare it with 'petroleum based tech' but there is very limited parallel. The parallel is the speculative component of the price of a barrel of oil, which is maybe $20 of the current $50. If it were purely based on consumptive demand, it would be a lot cheaper, as we've seen recently.

There's a whole world of tangible, valuable petroleum-derived products and services. There is not a whole world of bitcoin-derived anything as far as I can see, so it's just a trading token.
 
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