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Crypto Bubble

How to buy, profit and invest in crypto currencies or NFTs
Urbandreamer
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Re: Crypto Bubble

#390513

Postby Urbandreamer » February 27th, 2021, 10:23 am

GoSeigen wrote:Quite right, gold has been superseded by other more useful stuff in all but a few niche areas, but the point about extraction is not the one being debated. I could live with a high cost of extraction for bitcoin, the higher the better. It is the fact that the cost is tied to transactions that is the problem; it's a problem that does NOT occur with gold or other common currencies and assets; the physics of blockchain is messed up.

GS


I do think that some, possibly including yourself, were claiming that the energy costs were morally wrong where bitcoin was considered. As for transactions, I think that you will find that everyone's favourite, Visa, does charge per transaction.

However totally setting aside if I have remembered your arguments wrongly, and if I have I apologise. You are CERTAINLY wrong to say that the "physics of blockchain is messed up". Though it is entirely possible that you meant something else other than what you wrote.

The blockchain is simply a method of recording transactions. Bitcoin mining uses "proof of work" to pay people to keep a record and process the blockchain transactions. In and of itself that has nothing to do with the blockchain concept. Indeed many are looking towards using the blockchain while abandoning proof of work or indeed abandoning the idea of using it to record cryptocurrency transactions.

ie, this blog at gov.uk
https://hmlandregistry.blog.gov.uk/2019 ... ty-market/
The UK government might use it for land registry!

Moving back to currency transactions here is a link that you might like to check.
https://www.nasdaq.com/articles/how-vis ... 2020-12-07
"2015 has turned blockchain into something the industry has to live with. It is no longer a choice anymore. Recent news speculating about the identity of its creator and the formalization of virtual money as a commodity, just makes it more real than ever before" ~ Visa

The article is about how Visa is using blockchain technology itself to transfer "real" money.

TheMotorcycleBoy
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Re: Crypto Bubble

#390648

Postby TheMotorcycleBoy » February 27th, 2021, 3:44 pm

GoSeigen wrote:
TheMotorcycleBoy wrote:
JohnB wrote:I have marked Urbandreamer as a foe.

I've never understood the point of doing that. I'm not trying to start a fight here. I'm talking about a very real psychological trait, to be understood by all investors, Confirmation Bias.

On a pleasant natured (and moderated to destruction) forum such as TLF, such actions seem to be, perhaps subliminally, aimed at ensuring one only hears information/noise/news that conforms to our already held viewpoints.

Matt


Nothing to do with confirmation bias. Who wants to read over and over again completely specious arguments advanced without evidence or reason??

I totally agree. The amount of times I've read antagonists waxing lyrical about the energy consumption involved in mining and bartering in BTC.

:roll:

TheMotorcycleBoy
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Re: Crypto Bubble

#390651

Postby TheMotorcycleBoy » February 27th, 2021, 3:52 pm

GoSeigen wrote:
Snorvey wrote:I've said it before, much energy (and lives) has been lost in the extraction of gold over the centuried5. Pretty much the same fundamental value. I.e.f-All.


Quite right, gold has been superseded by other more useful stuff in all but a few niche areas, but the point about extraction is not the one being debated. I could live with a high cost of extraction for bitcoin, the higher the better. It is the fact that the cost is tied to transactions that is the problem; it's a problem that does NOT occur with gold or other common currencies and assets; the physics of blockchain is messed up.

GS

However, there's a view which perceives BTC as primarily a store of value uneffected by CB's decisions in money supply rather than an everyday tool of barter.

Things like Uranium or Classic cars could also be perceived as value stores. I've never really considered the energy costs involved in using them in transactions, since it would hideously impractical to do so.

Sure the current price hike could be a bubble, but why is the market choosing BTC?

Matt

GoSeigen
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Re: Crypto Bubble

#390655

Postby GoSeigen » February 27th, 2021, 4:03 pm

TheMotorcycleBoy wrote:
GoSeigen wrote:
TheMotorcycleBoy wrote:I've never understood the point of doing that. I'm not trying to start a fight here. I'm talking about a very real psychological trait, to be understood by all investors, Confirmation Bias.

On a pleasant natured (and moderated to destruction) forum such as TLF, such actions seem to be, perhaps subliminally, aimed at ensuring one only hears information/noise/news that conforms to our already held viewpoints.

Matt


Nothing to do with confirmation bias. Who wants to read over and over again completely specious arguments advanced without evidence or reason??

I totally agree. The amount of times I've read antagonists waxing lyrical about the energy consumption involved in mining and bartering in BTC.

:roll:


If in anyone's considered opinion my arguments are empty, go ahead and put me on ignore. Doesn't bother me in the slightest.

Better still, make a meaningful investment in bitcoin and report back on the results. Also go out and find any top 100 business in any OECD country that prices its goods or services in bitcoin, carry out a transaction with them and report the results to us. Oh and go out and buy yourself a cup of coffee using your bitcoins, and tell us how you enjoyed waiting 15min for the payment to be processed after which time your coffee was cold and tell us what you thought of paying $22 of fees into the bargain.


For those tempted to believe that blockchains are something wonderful:

https://www2.computerworld.com.au/artic ... -oil-spin/

GS

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Re: Crypto Bubble

#390657

Postby GoSeigen » February 27th, 2021, 4:10 pm

TheMotorcycleBoy wrote:
GoSeigen wrote:
Snorvey wrote:I've said it before, much energy (and lives) has been lost in the extraction of gold over the centuried5. Pretty much the same fundamental value. I.e.f-All.


Quite right, gold has been superseded by other more useful stuff in all but a few niche areas, but the point about extraction is not the one being debated. I could live with a high cost of extraction for bitcoin, the higher the better. It is the fact that the cost is tied to transactions that is the problem; it's a problem that does NOT occur with gold or other common currencies and assets; the physics of blockchain is messed up.

GS

However, there's a view which perceives BTC as primarily a store of value uneffected by CB's decisions in money supply rather than an everyday tool of barter.

Things like Uranium or Classic cars could also be perceived as value stores. I've never really considered the energy costs involved in using them in transactions, since it would hideously impractical to do so.

Sure the current price hike could be a bubble, but why is the market choosing BTC?

Matt


I don't apply the same arguments against Bitcoin as a store of value (i.e. asset) as I do for its use as a currency.

As a currency, its high transaction cost and utter lack of scalability make it useless.
As a store of value its value is close to zero, i.e. it's a scam. It has no wealth generating property and there is no contract entitling anyone to a share of whatever benefit there may be. It is simply a ponzi scheme and a curiosity.

As for why people like it: see any other popular ponzi scheme.


GS

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Re: Crypto Bubble

#390685

Postby TheMotorcycleBoy » February 27th, 2021, 6:12 pm

GoSeigen wrote:
TheMotorcycleBoy wrote:
GoSeigen wrote:
Nothing to do with confirmation bias. Who wants to read over and over again completely specious arguments advanced without evidence or reason??

I totally agree. The amount of times I've read antagonists waxing lyrical about the energy consumption involved in mining and bartering in BTC.

:roll:


If in anyone's considered opinion my arguments are empty, go ahead and put me on ignore. Doesn't bother me in the slightest.

see viewtopic.php?p=390459#p390459

Better still, make a meaningful investment in bitcoin and report back on the results. Also go out and find any top 100 business in any OECD country that prices its goods or services in bitcoin, carry out a transaction with them and report the results to us. Oh and go out and buy yourself a cup of coffee using your bitcoins, and tell us how you enjoyed waiting 15min for the payment to be processed after which time your coffee was cold and tell us what you thought of paying $22 of fees into the bargain.

I'm not currently planning on making any BTC purchase right now. I've already expressed my own interests earlier on in this thread. I hold no positive/negative views, I'm merely attempting to analyse/rationalise the markets.

It is simply a ponzi scheme and a curiosity.

As for why people like it: see any other popular ponzi scheme.

Of course, it's tempting to describe BTC as a Ponzi scheme. But this one is over 10 years old. The Tulip Mania speculative bubble lasted a couple of years by comparsion. From about 1636-1637. The public didn't trade the bulbs until 1633.

Matt

Urbandreamer
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Re: Crypto Bubble

#390693

Postby Urbandreamer » February 27th, 2021, 7:00 pm

TheMotorcycleBoy wrote:....
Of course, it's tempting to describe BTC as a Ponzi scheme. But this one is over 10 years old. The Tulip Mania speculative bubble lasted a couple of years by comparsion. From about 1636-1637. The public didn't trade the bulbs until 1633.

Matt


Others have claimed that fiat currencies, especially those supported by fractional banking, are a Ponzi scheme.

In this very thread I have pointed out that there are states that prevent you holding other currencies than their own.
What's the difference between M1, M2 and M3 money supply? Most would admit that only M1, be it based upon coins that have no value, is the only one that is difficult to manipulate.

When is a Ponzi scheme, not a Ponzi scheme? When the government runs it.

Ps thanks GoSeigan for your link. The author argues that the cost of fraud is an important issue. However the state is in a very good position to influence the cost of fraud. Which is why I don't discount using the blockchain for state operations. Sure, if they own the record and servers, they can put anything in there that they want. However it might be somewhat difficult for others.

GoSeigen
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Re: Crypto Bubble

#390796

Postby GoSeigen » February 28th, 2021, 8:24 am

TheMotorcycleBoy wrote:
GoSeigen wrote:
TheMotorcycleBoy wrote:I totally agree. The amount of times I've read antagonists waxing lyrical about the energy consumption involved in mining and bartering in BTC.

:roll:


If in anyone's considered opinion my arguments are empty, go ahead and put me on ignore. Doesn't bother me in the slightest.

see viewtopic.php?p=390459#p390459

Better still, make a meaningful investment in bitcoin and report back on the results. Also go out and find any top 100 business in any OECD country that prices its goods or services in bitcoin, carry out a transaction with them and report the results to us. Oh and go out and buy yourself a cup of coffee using your bitcoins, and tell us how you enjoyed waiting 15min for the payment to be processed after which time your coffee was cold and tell us what you thought of paying $22 of fees into the bargain.

I'm not currently planning on making any BTC purchase right now. I've already expressed my own interests earlier on in this thread. I hold no positive/negative views, I'm merely attempting to analyse/rationalise the markets.

It doesn't have to be you necessarily. It would be instructive for one of the believers to do this. But at least briefly explain why you characterised antagonists' arguments as specious up there ^^^.
It is simply a ponzi scheme and a curiosity.

As for why people like it: see any other popular ponzi scheme.

Of course, it's tempting to describe BTC as a Ponzi scheme. But this one is over 10 years old. The Tulip Mania speculative bubble lasted a couple of years by comparsion. From about 1636-1637. The public didn't trade the bulbs until 1633.


Okay, but if it's not a ponzi, then where does the value come from apart from new entrants? What is the current underlying value -- of just BTC to keep it simple? Has someone articulated this already in terms a highly experienced investor can understand? I could have a go myself but after 10 years of HODLing, surely it's been done already?

GS

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Re: Crypto Bubble

#390809

Postby GoSeigen » February 28th, 2021, 9:23 am

Bitcoin is solving what should be a non-problem.

It is trying to eliminate trust from financial transactions. Why? Because some paranoid people don't trust governments or banks or someone else.

What the whole of the remainder of the business world recognises is that there is no business without trust. It doesn't benefit me at all that my customers paid with bitcoin and I know 100% that their payment has been received though a trustless network if they then proceed to betray my trust by trashing my property, or stealing something valuable.

Payment is only a minor part of the chain: yes, one that bad people try to exploit, but in an educated and civilised/lawful society everyone recognises that it is in their own interests to minimise these breaches of trust.


Perhaps Bitcoin is a temporary phenomenon, driven by a feeling of distrust in a significant proportion of the population. I may have missed this aspect or not recognised its significance but it carries risks too: that the paranoid could return to their senses; that the disadvantages are finally recognise to outweigh the advantages of the scheme; that unscrupulous people are taking advantage of the gullible within this "trustless" completely "trustable" system.


That's the closest I can come to a justification of bitcoin. As such I can't see it ever being used as a general "currency" for buying coffee etc. It will remain niche, limited to large transactions where the transaction fee doesn't matter and the security of the transaction is more important than the huge associated costs. It will face fierce competition from the vast majority of wealth which arranges the world on the basis of trust relationships that have endured for millennia and where the overheads of transacting are far lower.

GS

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Re: Crypto Bubble

#390811

Postby scrumpyjack » February 28th, 2021, 9:36 am

Interesting BBC article on just how un-green Bitcoin is, and how inefficient. It uses about the same amount of electricity as the Netherlands and two thirds of that power comes from burning fossil fuels.

https://www.bbc.co.uk/news/science-environment-56215787

Elon, how could you betray your principles by buying some?

TheMotorcycleBoy
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Re: Crypto Bubble

#390826

Postby TheMotorcycleBoy » February 28th, 2021, 10:11 am

GoSeigen wrote:But at least briefly explain why you characterised antagonists' arguments as specious up there ^^^.

Morning GS :)

I'm not 100% sure of what you asking. Seems to have started off by you reflecting that ignoring ppl who repeat themselves is not adherance confirmation bias, and my pointing out the irony that the anti BTC energy arguments are a little repetitive also .

Perhaps they aren't specious. But against the backdrop of our incredibly wasteful human race they seem irrelevant to me. So many things waste energy...building Rolls Royce cars, building Trump Towers, testing bombs and armaments ....blah...


Okay, but if it's not a ponzi, then where does the value come from apart from new entrants? What is the current underlying value -- of just BTC to keep it simple? Has someone articulated this already in terms a highly experienced investor can understand? I could have a go myself but after 10 years of HODLing, surely it's been done already?

How should I know? I've only been in the investment/researching finance/researching economics for a few years....you should know better than me! :lol:

But anyway, I've ventured my humble and naive opinion already I'm sure. Merely that it's a fixed quantity resource whose supply is allegedly fixed in it's protocol, can't be increased by CBs....etc...etc...

Sorry mate, but the discussion is going round in circles; and sorry again for getting a tad personal, but it just seems that you hate the damn thing (BTC), whereas I'm trying to approach it with a more open and questioning. I mean no one of us can predict the future, or figure out which way the race is going to evolve.

:)

OOPS! Quick EDIT:

Perhaps Bitcoin is a temporary phenomenon, driven by a feeling of distrust in a significant proportion of the population. I may have missed this aspect or not recognised its significance but it carries risks too: that the paranoid could return to their senses; that the disadvantages are finally recognise to outweigh the advantages of the scheme; that unscrupulous people are taking advantage of the gullible within this "trustless" completely "trustable" system.

Temporary and yet lasting for 12 years? Now you explain that! :lol:

Matt

TheMotorcycleBoy
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Re: Crypto Bubble

#390855

Postby TheMotorcycleBoy » February 28th, 2021, 11:18 am

Snorvey wrote:If it evaporates this year it will be temporary. How long has cash been around for?

Or gold?

Sure. Few travel around in England in a horse and cart these days, but from what I've read it was a very important concept for several centuries.

Matt

Urbandreamer
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Re: Crypto Bubble

#390881

Postby Urbandreamer » February 28th, 2021, 12:19 pm

Snorvey wrote:If it evaporates this year it will be temporary. How long has cash been around for?

Or gold?


On that subject, can I recommend Lindybeige's talk on pounds shillings and pence.

https://www.youtube.com/watch?v=R2paSGQRwvo

I do have to question though if you should be comparing bitcoin to ALL cash. Surely we know of some, like the US confederate currency, that is no longer used. Indeed I think that the Franc and the Deutsche Mark are no longer used.

On the subject of trust in currency, can I recommend this book.

https://smile.amazon.co.uk/This-Time-Di ... 162&sr=8-1

This Time Is Different presents a comprehensive look at the varieties of financial crises, and guides us through eight astonishing centuries of government defaults, banking panics, and inflationary spikes--from medieval currency debasements to today's subprime catastrophe.

GoSeigen
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Re: Crypto Bubble

#390911

Postby GoSeigen » February 28th, 2021, 3:12 pm

TheMotorcycleBoy wrote:
GoSeigen wrote:But at least briefly explain why you characterised antagonists' arguments as specious up there ^^^.

Morning GS :)

I'm not 100% sure of what you asking. Seems to have started off by you reflecting that ignoring ppl who repeat themselves is not adherance confirmation bias, and my pointing out the irony that the anti BTC energy arguments are a little repetitive also .

Perhaps they aren't specious. But against the backdrop of our incredibly wasteful human race they seem irrelevant to me. So many things waste energy...building Rolls Royce cars, building Trump Towers, testing bombs and armaments ....blah...


I don't mind repetitive. I have less patience with specious, obvious fallacy or abusive as mentioned earlier.

GS

Urbandreamer
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Re: Crypto Bubble

#391073

Postby Urbandreamer » March 1st, 2021, 9:43 am

The BBC have an interesting article on Bitcoin in Nigeria.

https://www.bbc.co.uk/news/world-africa-56169917

Of interest to me is how it relates to comments made here regarding trust, Ponzi scheme's, ease of use and commissions.

To be blunt something is going seriously wrong with the Nigerian economy. So seriously wrong that former bankers are using bitcoin. The state is also freezing the bank accounts of those who protest police brutality, causing them to need to find an alternative to a bank account in a currency that devalues by 10-20% a year.

TheMotorcycleBoy
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Re: Crypto Bubble

#391076

Postby TheMotorcycleBoy » March 1st, 2021, 9:53 am

I've not had time to watch or find it a non-paywall, but I believe that Cathie Wood has recently uploaded a clip voicing her positive sentiment for BTC. She is even pitching it (and possibly other crypto) as a replacement for bonds.

Matt

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Re: Crypto Bubble

#391077

Postby TheMotorcycleBoy » March 1st, 2021, 9:55 am

GoSeigen wrote:Better still, make a meaningful investment in bitcoin and report back on the results.

I wouldn't contemplate that now, it looks like it's at a high. But I don't mind spending a few months researching both it and ETH as ideas.

Matt

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Re: Crypto Bubble

#391150

Postby TheMotorcycleBoy » March 1st, 2021, 1:50 pm

I had a quick listen to one of Cathie Wood's clips. She points out that Tesla and Square both hold BTC, and remarks that if all US companies held 10% of their cash now as BTC, not USD then it would add $200B to BTC's market cap.

Matt

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Re: Crypto Bubble

#391246

Postby NotSure » March 1st, 2021, 5:26 pm

BTC is not something I would like to be long or short, but both Citi and Ruffer gave it a conditional thumbs up today. It is becoming harder and harder to completely dismiss IMHO, despite the fact that I'd love to.

TheMotorcycleBoy
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Re: Crypto Bubble

#391550

Postby TheMotorcycleBoy » March 2nd, 2021, 3:13 pm

So I took the plunge and put a limit order on for RIOT at $50.5.

Will only be about 0.8% of our portfolio if it does go through.

My work colleague (bastard) bought Argo Block Chain a couple of years ago. I've concerned that too, but I don't like buying straight stocks when they are so near to their all-time highs.

I've decided for the high risk part of our foli (e.g. H2 shares) to not bother massively with the fundamental analysis. Just keep the position sizes low and monitor.

Matt


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