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Bitcoin start-up advice needed

How to buy, profit and invest in crypto currencies or NFTs
GoSeigen
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Re: Bitcoin start-up advice needed

#502250

Postby GoSeigen » May 23rd, 2022, 9:42 am

Hornblower wrote:

That's perfectly ok. Meanwhile, the Central Banks will continue debasing their fiat money whilst holding interest rates below inflation.
People buy Bitcoin at the price they deserve.

H


Okay, making another wild claim here with no data to back it up.

From my own calculations, BoE interest rates have on average been held above inflation for the past 25 years of central bank independence, even if you include the last decade when the bank was attempting to increase inflation back to the 2% target. CPI rose about 72%; fiat sterling cash compounded at the base rate would have grown 85%.


GS

Itsallaguess
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Re: Bitcoin start-up advice needed

#502258

Postby Itsallaguess » May 23rd, 2022, 10:28 am

Hornblower wrote:
It would be a very weird thing to do & if a significant number of [the originally mined Bitcon] suddenly moved to an exchange to be sold (they are being watched), the Bitcoin price would go into free-fall in anticipation.


Hornblower wrote:
You're talking about the risk of 5% of the total supply...that's never moved in Bitcoin's 13 year history, suddenly being sold.

It would not be a catastrophe.


Sorry, but you were the one that said 'the Bitcoin price would go into free-fall in anticipation', but now you seem to be suggesting that this 'wouldn't be a catastrophe', so you'll have to forgive me for being a little confused in that apparent contradiction.

You also seem to be suggesting that because those original million Bitcoins have yet to be traded in the 13 years since being mined, that this means they will never be, and I'm not convinced that such a relatively short time-scale should lead to such a strong conclusion as that...

Cheers,

Itsallaguess

Mike4
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Re: Bitcoin start-up advice needed

#502259

Postby Mike4 » May 23rd, 2022, 10:30 am

GoSeigen wrote:
Hornblower wrote:

That's perfectly ok. Meanwhile, the Central Banks will continue debasing their fiat money whilst holding interest rates below inflation.
People buy Bitcoin at the price they deserve.

H


Okay, making another wild claim here with no data to back it up.

From my own calculations, BoE interest rates have on average been held above inflation for the past 25 years of central bank independence, even if you include the last decade when the bank was attempting to increase inflation back to the 2% target. CPI rose about 72%; fiat sterling cash compounded at the base rate would have grown 85%.


GS


Interesting point but hypothetical, surely? Is base rate ever paid on cash deposited?

Hornblower
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Re: Bitcoin start-up advice needed

#502277

Postby Hornblower » May 23rd, 2022, 11:39 am

GoSeigen wrote:
Hornblower wrote:

That's perfectly ok. Meanwhile, the Central Banks will continue debasing their fiat money whilst holding interest rates below inflation.
People buy Bitcoin at the price they deserve.

H


Okay, making another wild claim here with no data to back it up.

From my own calculations, BoE interest rates have on average been held above inflation for the past 25 years of central bank independence, even if you include the last decade when the bank was attempting to increase inflation back to the 2% target. CPI rose about 72%; fiat sterling cash compounded at the base rate would have grown 85%.


GS



If you believe that the Central Banks are doing a sterling job, that printing trillions out of thin air for a decade doesn't have bad consequences, that the official inflation figures are an accurate representation of reality, that interest rates are perfectly rational at 0.5% or whatever they are, then stick your money in a savings account....you'll probably do great ;-)

Bitcoin is for people who believe that something is very very wrong with the money, and that if you break the money, everything else starts breaking down as well.

I know that this stuff can feel threatening, that is natural. Maybe just hedge your bets in case the bitcoiners are right? 5% of your net worth stored in bitcoin would be a great hedge, with the added bonus that historically it has gone up around 200% a year, albeit in a very volatile manner.

Hornblower
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Re: Bitcoin start-up advice needed

#502279

Postby Hornblower » May 23rd, 2022, 11:52 am

Itsallaguess wrote:
Hornblower wrote:
It would be a very weird thing to do & if a significant number of [the originally mined Bitcon] suddenly moved to an exchange to be sold (they are being watched), the Bitcoin price would go into free-fall in anticipation.


Hornblower wrote:
You're talking about the risk of 5% of the total supply...that's never moved in Bitcoin's 13 year history, suddenly being sold.

It would not be a catastrophe.


Sorry, but you were the one that said 'the Bitcoin price would go into free-fall in anticipation', but now you seem to be suggesting that this 'wouldn't be a catastrophe', so you'll have to forgive me for being a little confused in that apparent contradiction.

You also seem to be suggesting that because those original million Bitcoins have yet to be traded in the 13 years since being mined, that this means they will never be, and I'm not convinced that such a relatively short time-scale should lead to such a strong conclusion as that...

Cheers,

Itsallaguess




Price would probably go into free fall over the short term, it would be a big event in Bitcoin to see those particular coins move. Long term it wouldn't matter a jot.

From our discussion it appears that you're not convinced at the value proposition of Bitcoin. From my point-of-view, you are attempting to find flaws with Bitcoin as a way to back up your feelings around it. This probably isn't helped by a almost universally negative opinion of it in the UK financial press. The FT have been penning badly-researched 'hit pieces' about the orange coin for a decade. The 'high status opinion' among sophisticated investors in the UK is that it is a ponzi/a fraud/old tech/will never catch on/will be banned if it catches on/uses too much energy/serves no function (pick your objection)

There's uncertainty around any speculation or investment. Nothing is ever 100% obvious or clear cut until after the event. It wasn't clear that Amazon was the bargain of the century when it dropped to $6 a share after the dotcom crash. Now it's 'obvious' that it was going to succeed.

As I said in another post, I'd argue that it is worth adding to almost everyone's portfolio as a hedge. If you don't have much conviction right now, keep your allocation low.

H

Hornblower
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Re: Bitcoin start-up advice needed

#502280

Postby Hornblower » May 23rd, 2022, 11:53 am

Hornblower wrote:
Itsallaguess wrote:
Hornblower wrote:
It would be a very weird thing to do & if a significant number of [the originally mined Bitcon] suddenly moved to an exchange to be sold (they are being watched), the Bitcoin price would go into free-fall in anticipation.


Hornblower wrote:
You're talking about the risk of 5% of the total supply...that's never moved in Bitcoin's 13 year history, suddenly being sold.

It would not be a catastrophe.


Sorry, but you were the one that said 'the Bitcoin price would go into free-fall in anticipation', but now you seem to be suggesting that this 'wouldn't be a catastrophe', so you'll have to forgive me for being a little confused in that apparent contradiction.

You also seem to be suggesting that because those original million Bitcoins have yet to be traded in the 13 years since being mined, that this means they will never be, and I'm not convinced that such a relatively short time-scale should lead to such a strong conclusion as that...

Cheers,

Itsallaguess




Price would probably go into free fall over the short term, it would be a big event in Bitcoin to see those particular coins move. Long term it wouldn't matter a jot.

From our discussion it appears that you're not convinced at the value proposition of Bitcoin. From my point-of-view, you are attempting to find flaws with Bitcoin as a way to back up your feelings around it. This probably isn't helped by an almost universally negative opinion of it in the UK financial press. The FT have been penning badly-researched 'hit pieces' about the orange coin for a decade. The 'high status opinion' among sophisticated investors in the UK is that it is a ponzi/a fraud/old tech/will never catch on/will be banned if it catches on/uses too much energy/serves no function (pick your objection)

There's uncertainty around any speculation or investment. Nothing is ever 100% obvious or clear cut until after the event. It wasn't clear that Amazon was the bargain of the century when it dropped to $6 a share after the dotcom crash. Now it's 'obvious' that it was going to succeed.

As I said in another post, I'd argue that it is worth adding to almost everyone's portfolio as a hedge. If you don't have much conviction right now, keep your allocation low.

H

murraypaul
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Re: Bitcoin start-up advice needed

#502284

Postby murraypaul » May 23rd, 2022, 12:00 pm

Hornblower wrote:The 'high status opinion' among sophisticated investors in the UK is that it is a ponzi/a fraud/old tech/will never catch on/will be banned if it catches on/uses too much energy/serves no function (pick your objection)


I'd argue that for its original function it still hasn't caught on, 13 years later.

It is not being used as a currency. It will likely never be used as a currency, it is simply too slow and expensive.

The people who thought we'd all be paying for our coffees with Bitcoin transactions (yes, there were lots of them) were wrong.

There is an inherent conflict between:
a) Bitcoin is good because it will replace fiat as money
b) Bitcoin is good because it is a stable store of value
c) Bitcoin is good because it goes up 200% per year

The people who believe in Bitcoin as a concept and a theoretical public good think a and b are important.

The Bitcoin price (and almost all of the mainstream Bitcoin narrative) is determined by the people who are chasing c, who view it as something to be speculated on. They don't want something stable, they want something that will go to the moon.

GoSeigen
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Re: Bitcoin start-up advice needed

#502298

Postby GoSeigen » May 23rd, 2022, 12:49 pm

Mike4 wrote:
GoSeigen wrote:
Hornblower wrote:

That's perfectly ok. Meanwhile, the Central Banks will continue debasing their fiat money whilst holding interest rates below inflation.
People buy Bitcoin at the price they deserve.

H


Okay, making another wild claim here with no data to back it up.

From my own calculations, BoE interest rates have on average been held above inflation for the past 25 years of central bank independence, even if you include the last decade when the bank was attempting to increase inflation back to the 2% target. CPI rose about 72%; fiat sterling cash compounded at the base rate would have grown 85%.


GS


Interesting point but hypothetical, surely? Is base rate ever paid on cash deposited?


Crypto bro' made the claim. The claim was false. That's all I'm saying. I don't like basing my investment on things that are demonstrably untrue.

GS

DrFfybes
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Re: Bitcoin start-up advice needed

#502311

Postby DrFfybes » May 23rd, 2022, 1:33 pm

I haven't read all this thread, but I do hope the OP is waiting until it finishes before investing.

Compared to 7th Nov when the thread started, Bitcoin is down over 50%, as is pretty much everything else.

Apart from the ones that have performed badly.

https://coinmarketcap.com/historical/20211107/


Paul

Itsallaguess
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Re: Bitcoin start-up advice needed

#502316

Postby Itsallaguess » May 23rd, 2022, 2:04 pm

Hornblower wrote:
From our discussion it appears that you're not convinced at the value proposition of Bitcoin. From my point-of-view, you are attempting to find flaws with Bitcoin as a way to back up your feelings around it.

This probably isn't helped by a almost universally negative opinion of it in the UK financial press. The FT have been penning badly-researched 'hit pieces' about the orange coin for a decade.

The 'high status opinion' among sophisticated investors in the UK is that it is a ponzi/a fraud/old tech/will never catch on/will be banned if it catches on/uses too much energy/serves no function (pick your objection)


The very detailed and interesting article I linked to just a few posts ago in this thread was written by a computer scientist from University of California, Berkeley, and covered almost all of the concerning issues that I've also read in the UK press regarding Bitcoin -

UC-Berkeley’s Nicholas Weaver has been studying cryptocurrency for years. He thinks it’s a terrible idea that will end in disaster -

https://www.currentaffairs.org/2022/05/why-this-computer-scientist-says-all-cryptocurrency-should-die-in-a-fire

I would urge any potential crypto-currency investor to read the above article before parting with any of their hard-earned capital...

Cheers,

Itsallaguess

Urbandreamer
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Re: Bitcoin start-up advice needed

#502340

Postby Urbandreamer » May 23rd, 2022, 5:19 pm

Itsallaguess wrote:
The very detailed and interesting article I linked to just a few posts ago in this thread was written by a computer scientist from University of California, Berkeley, and covered almost all of the concerning issues that I've also read in the UK press regarding Bitcoin -

UC-Berkeley’s Nicholas Weaver has been studying cryptocurrency for years. He thinks it’s a terrible idea that will end in disaster -

https://www.currentaffairs.org/2022/05/why-this-computer-scientist-says-all-cryptocurrency-should-die-in-a-fire

I would urge any potential crypto-currency investor to read the above article before parting with any of their hard-earned capital...

Cheers,

Itsallaguess


Ok, I tried to read it the first time that you provided the link. The second time I actually struggled through it.

From a certain point of view the errors in the arguments are unimportant. Is there really a difference between someone scamming you or you losing your capital because it's stolen from them? Most of us don't live in a country where we can be both paid in Bitcoin and buy food and pay taxes with it so does it matter that he claims this doesn't happen when elsewhere it does. If we invest in a global index tracker we don't notice that any dividend is used to buy our local currency before we get it so clearly those purchases of currency don't happen. Different types of crypto are conflated in the article etc. But if all you need to know is that it can go wrong...

However it's a piece of terrible writing. Why did we need to wade through so much stuff before we got to the meat of the piece? Why were such simple errors allowed when no more effort would be needed to get them right?

Is it worth reading? Well yes it probably is. The errors are minor in terms of the arguments and the important facts are right. More importantly they are different from what people may assume.

Do I agree that he is right in the headline claim or the opinion that he forms from those facts? No I don't.

Ps, if you do chose to get involved, don't leave significant sums on a crypto exchange. ALL reputable exchanges advise against it and theft from them can happen. Just as it did with MtGox. Of course they then offer yield for the use of your capital, in which case you need to let them keep it.
It's NOTHING like current banking and his description of "Wildcat banking" is also known as "free banking" (as in free speach) in some circles.
https://en.wikipedia.org/wiki/Free_banking

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Re: Bitcoin start-up advice needed

#575631

Postby mjbdreamer » March 14th, 2023, 3:10 pm

What a great thread. I first started talking about BTC on the motley fool channels when 1 BTC cost $100. We had the people who didn't understand it and dismissed it back then too.

Mark,
Highly recommend you dip your toe in, £1500 in one hit. The next bull run is due to start, prices have bottomed over the past 6 months. Research wallets, cold storage.

If you use Paypal as an easy option to buy then please, please, please, take it from Paypal into your own wallet: https://currency.com/how-to-transfer-crypto-from-paypal. If you don't hold the crypto, you don't own it.

All the best,
M

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Re: Bitcoin start-up advice needed

#575632

Postby mjbdreamer » March 14th, 2023, 3:15 pm

Mt.Gox, finally paying out after what, 7 years or so? It's been a long haul and an interesting lesson.

Something like just over 20% will be paid back to those that lost out.

If you had 10 BTC worth $1000 at time of hack you only get back 2BTC, worth about $50,000 now. And some Yen. And some 'Bitcoin Cash' because Bitcoin forked over the years.

Cheers,
M

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Re: Bitcoin start-up advice needed

#575654

Postby Bubblesofearth » March 14th, 2023, 4:52 pm

mjbdreamer wrote:And some 'Bitcoin Cash' because Bitcoin forked over the years.


M


I predict that at some point in the not too distant future everyone still holding Bitcoin will be forked. :lol:

BoE

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Re: Bitcoin start-up advice needed

#575657

Postby mjbdreamer » March 14th, 2023, 5:13 pm

Indeed....

What do you think of this, the words not the person or background. He talks about where the yield comes from for crypto and fiat:

https://twitter.com/i/status/1635099729028853763

1nvest
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Re: Bitcoin start-up advice needed

#576135

Postby 1nvest » March 16th, 2023, 12:49 pm

GoSeigen wrote:
Hornblower wrote:

That's perfectly ok. Meanwhile, the Central Banks will continue debasing their fiat money whilst holding interest rates below inflation.
People buy Bitcoin at the price they deserve.

H


Okay, making another wild claim here with no data to back it up.

From my own calculations, BoE interest rates have on average been held above inflation for the past 25 years of central bank independence, even if you include the last decade when the bank was attempting to increase inflation back to the 2% target. CPI rose about 72%; fiat sterling cash compounded at the base rate would have grown 85%.


GS


Image

Sourced from ons (CPI) and BoE (base rates)

1nvest
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Re: Bitcoin start-up advice needed

#576146

Postby 1nvest » March 16th, 2023, 1:38 pm

Extending my prior post chart data back further, to the 1790's ....

Pre 1930's and gold was money. Sovereign Pound gold coins, alongside Pound Notes paper money, where banks accepted/converted them directly as desired, guaranteed. Gold being finite and inflation broadly averaged 0%. Bonds tended to yield comparable rewards to stocks, and most savers wouldn't keep surplus sovereigns or pound notes at home, but deposit them in return for interest. There was little interest in stocks, as they were for speculators/gamblers, and after factoring in the risk adjusted rewards were less 'safe' than holding bonds.

Image
(ST = short term treasury rate)

From the 1930's (1931 UK, 1933 US), gold/money convertibility ended, prior broadly flat inflation turned into predominately positive inflation, after taxes and inflation bonds (and gold) broadly tended to yield 0% real, but in a volatile manner. In effect the state no longer had to pay real rates of return to borrow gold/money as they had had to prior to the ending of the gold standard (gold as money).

A present day investor might hold 60/40 stock/bonds, or 60/40 stock/gold to broadly similar overall effect PV (US data), but again with volatility/variations so you might select periods to suggest one or the other being the better/worse. A factor with gold however is that physical in-hand gold has no counter-party risk, and no regular income taxation risk, unlike bonds where the interest might be taxed at perhaps a 20% rate. Cash on deposit when there are bank runs can be 'uncomfortable', or you may even have to wait months to get your money back. When you deposit money into a bank it becomes the banks money, with your name registered in their books as a creditor. You're lending your money to the bank at whatever interest rate they offer, that is eroded by both inflation and taxation.

Bitcoins are another asset outside of the regular financial system. For me personally however I'm not fond of it, but it has its potential uses. One could for instance locally sell physical gold for bitcoin, whilst simultaneously taking out a short bit coin position to negate its volatility, and then use those bitcoins wherever else in the world to perhaps buy back physical gold and close that short bitcoin position. Which for instance might side step restrictions put in place on the amounts of money that you might otherwise take out of the country.


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