The Lemon Fool

GoSeigen wrote:

Leif wrote:
And yet it acts like gold, albeit with some advantages eg no need to have a huge armoured vault. Despite what you wrote, it’s not suitable as a currency, as it would consume absurd amounts of energy. It is a commodity rather than a currency.

If alchemy produces gold then yes, bitcoin is like gold. Funny, so far it has been a currency, then a store of value and now gold. IMO it's a rubik's cube, intriguing, a flash in the pan, perhaps with a long-term niche interest but as valuable as a lump of plastic in the long term.


Doesn't matter whether hiriskpaul likes bitcoin or not, his argument is 100% sound.


GS

Bitcoin is like gold as it is hoarded as an investment. It’s use as a currency is insignificant. Do you understand how it works? If the US was to use it in place of the dollar, energy use would rocket. It’s also too volatile to be useful as a currency.

GoSeigen wrote:Poor poor logic (straw man). His point was that drug dealers and money launderers are about the only people it is useful for. That is not true of the dollar.


GS

Poor logic. The US dollar and bitcoin are equally useful for those who live in countries with exchange controls.
You know like Venezuaula.
https://www.bbc.co.uk/news/business-47553048

Other countries have had currency issues ie Zimbabwe. Only they banned the US dollar making bitcoin more useful than the dollar.
https://qz.com/africa/1662753/bitcoin-c ... ollar-ban/

Of course the UK could never have exchange controls, could it?
https://www.nytimes.com/1979/10/24/arch ... s-are.html

For the first time in 90 years, Britons will be free beginning tomorrow to buy and use foreign currency without any restriction, it was announced today in the House of Commons:

Still since your argument was that it's only useful for.... I think that I'll leave that argument there.

I played with BTC a bit and still have some.

The thing that puts me off is that to sell it, either in exchange for currency or goods (ie use it to pay for something), you have to include a fee for the miners otherwise they won't process it.

When there is a lot activity then fees go up.

https://ycharts.com/indicators/bitcoin_ ... action_fee
Bitcoin Average Transaction Fee measures the average fee in USD when a Bitcoin transaction is processed by a miner and confirmed. Average Bitcoin transaction fees can spike during periods of congestion on the network, as they did during the 2017 Crypto boom where they reached nearly 60 USD.

Bitcoin Average Transaction Fee is at a current level of 18.99, up from 11.49 yesterday and up from 0.6335 one year ago. This is a change of 65.30% from yesterday and 2.90K% from one year ago.

My first sale attempt was when BTC was around $20k. I set the fee too low and my transaction got ignored completely.

This is why I don't like it as an investment, or as a currency.

I was using paper wallets and selling through CoinBase. It may be more automated if you use an app on your phone or something.

Urbandreamer wrote:

GoSeigen wrote:Poor poor logic (straw man). His point was that drug dealers and money launderers are about the only people it is useful for. That is not true of the dollar.


GS

Poor logic. The US dollar and bitcoin are equally useful for those who live in countries with exchange controls.
You know like Venezuaula.
https://www.bbc.co.uk/news/business-47553048

Other countries have had currency issues ie Zimbabwe. Only they banned the US dollar making bitcoin more useful than the dollar.
https://qz.com/africa/1662753/bitcoin-c ... ollar-ban/

Of course the UK could never have exchange controls, could it?
https://www.nytimes.com/1979/10/24/arch ... s-are.html

For the first time in 90 years, Britons will be free beginning tomorrow to buy and use foreign currency without any restriction, it was announced today in the House of Commons:

Still since your argument was that it's only useful for.... I think that I'll leave that argument there.

All of which reinforces my point that the prime use case for Bitcoin appears to be for illegal activity, from drug dealing to basic black economy. I assume Bitcoin trading is subject to capital gains tax. I wonder what percentage of transactions get declared.

US citizens were banned from holding gold for 30 years, the ban only being lifted in 1964. I can see no reason why such bans might not be implemented against Bitcoin should it be considered to be a source of financial instability.

I guess the profligate energy inefficiency and teansaction fees could be mitigated by large holders issuing notes against their positions and then having a secondary market in the notes, in much the same way notes are issued against stores of gold.

hiriskpaul wrote:All of which reinforces my point that the prime use case for Bitcoin appears to be for illegal activity, from drug dealing to basic black economy. I assume Bitcoin trading is subject to capital gains tax. I wonder what percentage of transactions get declared.

US citizens were banned from holding gold for 30 years, the ban only being lifted in 1964. I can see no reason why such bans might not be implemented against Bitcoin should it be considered to be a source of financial instability.

I guess the profligate energy inefficiency could be mitigated by large holders issuing notes against their positions and then having a secondary market in the notes, in much the same way notes are issued against stores of gold.

Thanks. While we may disagree, I can accept that those are valid arguiments, from a certain point of view. Especially your point about US citizens banned from holding gold (though the facts were not as bad as you think). It does raise the question of if people are citizens, subjects or serfs though doesn't it.

The "profligate" energy use has to be seen in the same light. If people find some benefit for paying to mine, refine and mint gold coins, then the only problem is if owning gold coins is morally wrong because the state wishes to control your wealth. Those who see the "value" of a currency that's not state regulated may regard the price of either gold or bitcoin as worth it. The advantages of the "profligate" use of energy in street lighting isn't argued about, but possibly we should stop the Royal mint making soverigns.

PS, a search of TLF will find someone asking about bitcoin and CGT. Their problem was that their son was paid in bitcoin for services rendered, making CGT calculations somewhat difficult. Personally I believe that most people are willing to comply with laws, up to the point where they disagree that the law is moraly correct. Treating people as slaves by denying them the money that they earned (lawfully) or refusing to allow them to leave the country with that money isn't moraly right in my opinion.

hiriskpaul wrote:I guess the profligate energy inefficiency and teansaction fees could be mitigated by large holders issuing notes against their positions and then having a secondary market in the notes, in much the same way notes are issued against stores of gold.

This would plumb the depths of irony though, wouldn't it, given that practically the entire claimed raison d'etre of bitcoin is the blockchain.

GS

Urbandreamer wrote:

hiriskpaul wrote:All of which reinforces my point that the prime use case for Bitcoin appears to be for illegal activity, from drug dealing to basic black economy. I assume Bitcoin trading is subject to capital gains tax. I wonder what percentage of transactions get declared.

US citizens were banned from holding gold for 30 years, the ban only being lifted in 1964. I can see no reason why such bans might not be implemented against Bitcoin should it be considered to be a source of financial instability.

I guess the profligate energy inefficiency could be mitigated by large holders issuing notes against their positions and then having a secondary market in the notes, in much the same way notes are issued against stores of gold.

Thanks. While we may disagree, I can accept that those are valid arguiments, from a certain point of view. Especially your point about US citizens banned from holding gold (though the facts were not as bad as you think). It does raise the question of if people are citizens, subjects or serfs though doesn't it.

The "profligate" energy use has to be seen in the same light. If people find some benefit for paying to mine, refine and mint gold coins, then the only problem is if owning gold coins is morally wrong because the state wishes to control your wealth. Those who see the "value" of a currency that's not state regulated may regard the price of either gold or bitcoin as worth it. The advantages of the "profligate" use of energy in street lighting isn't argued about, but possibly we should stop the Royal mint making soverigns.

Bitcoin is state regulated, as is gold, silver, commodities. Lightly regulated yes, but still subject to CGT for example. Silver bullion is subject to VAT. That would be interesting - introducing VAT or some other transaction tax on Bitcoins. The idea that some people have that Bitcoins can be free from government scrutiny, regulation and taxation is quite ludicrous (I am not suggesting you are making this claim by the way).

PS, a search of TLF will find someone asking about bitcoin and CGT. Their problem was that their son was paid in bitcoin for services rendered, making CGT calculations somewhat difficult. Personally I believe that most people are willing to comply with laws, up to the point where they disagree that the law is moraly correct. Treating people as slaves by denying them the money that they earned (lawfully) or refusing to allow them to leave the country with that money isn't moraly right in my opinion.

CGT can often be difficult as it requires acquisition and disposal values to be known. HMRC allow estimated acquisition values though, for example if you are given a piece of art which subsequently becomes valuable.

GoSeigen wrote:

hiriskpaul wrote:I guess the profligate energy inefficiency and teansaction fees could be mitigated by large holders issuing notes against their positions and then having a secondary market in the notes, in much the same way notes are issued against stores of gold.

This would plumb the depths of irony though, wouldn't it, given that practically the entire claimed raison d'etre of bitcoin is the blockchain.

GS

It would yes, but that would likely be preferable to institutional investors. It would give them someone to sue when Bitcoins are stolen or lost in some other way.

Similarly, gold ETNs are anathema to many goldbugs who argue that one of the main advantages of gold is that it can be used as a currency when society breaks down and networks fail. An advantage over Bitcoins i suppose.

Adamski wrote:Tesla and Bitcoin are both "religions" and as such, not subject to the same rules and not subject to criticism. I see the hyping up of both as part of the same issue.

Except that institutional investors are now taking it seriously and not allowing anonymous trades.

Leif wrote:

Adamski wrote:Tesla and Bitcoin are both "religions" and as such, not subject to the same rules and not subject to criticism. I see the hyping up of both as part of the same issue.

Except that institutional investors are now taking it seriously and not allowing anonymous trades.

Just to add to the information, rather than to add arguments:

I thought that I'd point out that the Investors Chronicle podcast seems to be talking about the subject this week.
https://www.investorschronicle.co.uk/no ... ance-show/
The link might take a bit of time, but the podcast has turned up on my phone.

Adamski wrote:****

I guess my views on Tesla and Bitcoin are insignificant, but isn’t investing company funds in a volatile commodity highly unusual, and not exactly reassuring?

As an aside, Tesla or SpaceX, I forget which, sacks employees who show a lack of innovation.

Thanks dspp, point noted and understood. Should have put my point in more diplomatic language. Thing with the forum sometimes just post your thoughts without thinking of any consequences. I'm not invested in cyrpto. Predictions of collapse have been made by numerous experts, but it hasnt happened so far, and will be interesting to see how plays out.

Worth a read:

https://crypto-anonymous-2021.medium.co ... dcf78a64d3

moneybagz wrote:Worth a read:

https://crypto-anonymous-2021.medium.co ... dcf78a64d3

That’s very long. Do you have a short summary for people who don’t want to spend ages reading it?

Leif wrote:

moneybagz wrote:Worth a read:

https://crypto-anonymous-2021.medium.co ... dcf78a64d3

That’s very long. Do you have a short summary for people who don’t want to spend ages reading it?

If you want a summary," Does the Emperor Tether have any Clothes?" and is activity within Tether responsible for Bitcoin pricing?

My conclusion, who knows, most passed over my head, however I have a great belief in following my instincts, if I have some Sterling I have the taxation power of a nation state backing what I hold, they may devalue it (they certainly will) but there is always going to be some residual value whilst the state exists, with crypto currencies, if there is a wobbly peg in the structure, could it bring down the entire edifice, is it mere musical chairs waiting for the music to stop, some having done wonderfully, found a chair, others having not been so fortunate.

Now back to seeing how my tulips are faring out in the snow.

I started doing some limited research into BTC.

IMO its current attraction certainly to the likes of Musk, and many fund managers, is that it supply is allegedly fixed. So given recent increase in money of regular currencies a la covid, esp. the US $, the fixed nature is perceived as being a *good* thing. Even more so if people start to worry about inflation.

The bit pardoning the pun about supply being fixed is due to the maxcount=21Million being embedded into BTC protocol. I believe that there about 18M BTCs in existence right now. I also believe as you mine BTCs it becomes

1. More energy intensive
2. Since mining a coin rewardz the miner, but the protocol is coded such that the rewards dimiinish as the count rises.

Hence although BTC is bad from an environmental perspective its proponents agree that the above 2 points are useful features in terms of thrott!ing supply.

As JamesM states transaction fees are quite high, however apparently something called the"Lightning Network" will mitigate that. Apparently.

Regards usability one may google and actually several places accept BTC as payment


https://cointelegraph.com/bitcoin-for-b ... h-bitcoins

My problem however is given that a btc is currently worth about £33k and the nature of the thing how one make low value purchases? How are lower denominations defined?

Also rans: apparently a protocol change will enable the supply to increase pass 21M....

Matt

TheMotorcycleBoy wrote:My problem however is given that a btc is currently worth about £33k and the nature of the thing how one make low value purchases? How are lower denominations defined?

You don't. It's useless for making purchases.

GS

GoSeigen wrote:

TheMotorcycleBoy wrote:My problem however is given that a btc is currently worth about £33k and the nature of the thing how one make low value purchases? How are lower denominations defined?

You don't. It's useless for making purchases.

GS

Did you try a web search? You can trade fractions of a btc. Each bitcoin is divided into, apparently, 100 million units. A bit like pounds are divided into penny's. Only in this case somewhat less than a penny.
https://btcgeek.com/buy-fractions-bitcoin/

BTW, apparently Paypal are allowed to accept bitcoin in the US, but then you should already know that as it has been widely reported.
https://www.bbc.co.uk/news/technology-54630283
Here is paypal's help on the subject.
https://www.paypal.com/us/smarthelp/art ... aq-faq4398

So, yes, in the US, you will be able to buy any regular product that you would pay for using Paypal, but use bitcoin as the currency you use. Just as I can buy something on ebay from china and pay, using paypal, in pounds.

Urbandreamer wrote:

GoSeigen wrote:

TheMotorcycleBoy wrote:My problem however is given that a btc is currently worth about £33k and the nature of the thing how one make low value purchases? How are lower denominations defined?

You don't. It's useless for making purchases.

GS

Did you try a web search? You can trade fractions of a btc.

The question wasn't about trading. Nor was my answer.

GS