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Crypto Bubble

Any other investment discussions eg. peer to peer lending
GoSeigen
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Re: Crypto Bubble

#455999

Postby GoSeigen » November 6th, 2021, 8:31 am

XFool wrote:I really haven't the slightest idea about Cryptocurrency!

But one thing (at least) that is puzzling me wrt Bitcoin: I understand (I think) that it is limited to 21 million coins. If so, what happens after the 21st million coin is mined? - assuming that is even possible in the foreseeable future. As there will be no prospect of anymore for anybody new, won't the demand then dry up? Could not the value then simply collapse?


Notsure is basically correct, but there is another aspect to this, which is that miners receive the value of the bitcoins they mine as payment for processing the associated transactions. When there are no more bitcoins to mine I understand they will earn fees only; clearly these will be imposed on people making the transactions so it will be interesting to see what level of fees the market will bear.

It's always been my view that bitcoin will never be used as a currency because it is unsuited to day-to-day transactions. At best it will become a type of "base money" with people doing their shopping in derivatives of bitcoin without the claimed benefits of bitcoin (lack of centralised control, blockchain ledger, lack of middleman etc). i.e it will look pretty much like any other currency and banking system, which would make the bitcoin bros heads explode if they ever realised it but I'm guessing their heads are poked so far somewhere dark that denial will be second nature.

Curiously, the derivative version shows no sign of even niche (let alone widespread) use twelve years on. The bizarre experiment in El Salvador, for example, is likely to be a dismal failure.




GS

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Re: Crypto Bubble

#456018

Postby Urbandreamer » November 6th, 2021, 9:50 am

GoSeigen wrote:Curiously, the derivative version shows no sign of even niche (let alone widespread) use twelve years on. The bizarre experiment in El Salvador, for example, is likely to be a dismal failure.

GS


Time will tell. Since the Chinese experimented with paper money, through the days when John Law was a criminal in England, later a criminal in France to history in Zimbabwa and Venesuala, Fiat money has plenty of examples of dismal failure.

El Salvador has an odd economy. For quite some time they have been reliant on the strength of the US dollar, but their citizens don't get cheques from Uncle Sam during economic downturns. Nor can they do anything about the strength or weakness of the US dollar.

El Salvador has next to no exports currently and relies to a great extent on ex-pats sending money home to their families. However they have identified a possible export. They can use geothermal energy from the volcanos to run bitcoin mining rigs, selling the bitcoin. Both rigs and power plant can be built in areas that you wouldn't want to farm and data lines are far cheaper than high power electric lines.

https://abcnews.go.com/International/wi ... s-80611830

It IS an experiment. I wouldn't hazard a guess if it will succeed or fail.

As for a niche or widespread use of "cryptocurrency" rather than bitcoin, I suggest that you check the news or use google. China is not the only state talking about introducing a CBDC (central bank digital currency). Ripple is used by 250 financial institutions, 1/3 of the worlds largest banks.

Those things have a use case well understood by institutions and the state. The use case of private money exists

Bitcoin is contentious because it's not easy for the state to control. In the UK we use to have exchange controls and still have laws about moving gold in or out of the country. Those controls would be problematic to apply to bitcoin transactions.

DiamondEcho
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Re: Crypto Bubble

#456381

Postby DiamondEcho » November 7th, 2021, 8:51 pm

Urbandreamer wrote:El Salvador has an odd economy. For quite some time they have been reliant on the strength of the US dollar, but their citizens don't get cheques from Uncle Sam during economic downturns. Nor can they do anything about the strength or weakness of the US dollar.
El Salvador has next to no exports currently and relies to a great extent on ex-pats sending money home to their families. However they have identified a possible export. They can use geothermal energy from the volcanos to run bitcoin mining rigs, selling the bitcoin. Both rigs and power plant can be built in areas that you wouldn't want to farm and data lines are far cheaper than high power electric lines.
It IS an experiment. I wouldn't hazard a guess if it will succeed or fail.


'An odd economy'; well yes it's a revolutionaly and failed narco-state right on the US's doorstep. Even Sleepy-Joe might wake up if he finds Bitcoin-central on his doorstep. More seriously, have you travelled though Central America? As you know the idea of them pioneering a pukka new global currency is frankly beyond ridiculous.

Many countries have currencies pegged to other major currencies, even the relatively mighty Singapore has for several decades; it's about export competitiveness.

Urbandreamer
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Re: Crypto Bubble

#456438

Postby Urbandreamer » November 8th, 2021, 7:30 am

DiamondEcho wrote:More seriously, have you travelled though Central America? As you know the idea of them pioneering a pukka new global currency is frankly beyond ridiculous.


I haven't been to Central America, nor have I been to Canada or Africa. I did install machine tools in China during the late 80's and early 90's when much of it was still very much a 3'ed world country, does that count?

I was not claiming that Bitcoin would become a new global currency when I questioned if El Salvador's experiment was "likely to be a dismal failure". I was suggesting many things.

It's claimed that more people there now have Bitcoin wallets than bank accounts. Not difficult when less than 30% of the population have bank accounts.
Do you know about M-Pesa? Why do you think that has been so successful? Sure M-Pesa is not a cryptocurrency, but arguably Bitcoin is acting as M-Pasa in El Salvador.
Here is a bit about M-Pesa.
https://telcoin.medium.com/banking-the- ... 3381b26836

I am also not claiming that I KNOW that this experiment will succeed. It is others who claim to know the outcome simply because it's a cryptocurrency or Bitcoin in particular.

Ps
Canada is growing Canabis to export and last year doubled it's quantity of the dried stuff exported. Does that make it a "narco-state right on the US's doorstep"?

1nvest
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Re: Crypto Bubble

#460203

Postby 1nvest » November 22nd, 2021, 10:51 pm

Urbandreamer wrote:Bitcoin is contentious because it's not easy for the state to control. In the UK we used to have exchange controls and still have laws about moving gold in or out of the country. Those controls would be problematic to apply to bitcoin transactions.

Other than pre-declaration or otherwise potentially having it confiscated as smuggling/proceeds of illicit activities, I'm not familiar with UK laws about moving gold in/out of the country, do you have a reference?

The alternative to physically moving physical gold in/out is to liquidate, electronically transfer the cash, repurchase at the desired target destination. I guess in that sense bitcoin could instead be the medium of exchange/transfer when it was desired to leave a low footprint. As such I see a primary target of bitcoin transparency/audit-trail. Counter-parties breaking the law to accept/deal/pay in bitcoins without a verified audit trail as to which individual(s) made the exchange/deal. When so, and when the price does stabilise, it will be just another regulated currency and likely one of relatively low value.

Urbandreamer
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Re: Crypto Bubble

#460223

Postby Urbandreamer » November 23rd, 2021, 6:40 am

1nvest wrote:Other than pre-declaration or otherwise potentially having it confiscated as smuggling/proceeds of illicit activities, I'm not familiar with UK laws about moving gold in/out of the country, do you have a reference?


https://www.gov.uk/guidance/gold-acquis ... tice-70121

1nvest
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Re: Crypto Bubble

#461022

Postby 1nvest » November 26th, 2021, 8:14 am

Urbandreamer wrote:
1nvest wrote:Other than pre-declaration or otherwise potentially having it confiscated as smuggling/proceeds of illicit activities, I'm not familiar with UK laws about moving gold in/out of the country, do you have a reference?


https://www.gov.uk/guidance/gold-acquis ... tice-70121

Thanks. Obvious really, similar to any other goods/products i.e. restrictions can apply on the amounts and whether traceable (receipts) and how much value is being conveyed.

I wonder whether valuation might in the case of legal tender be the currency or commodity value, 1000 gold sovereigns of legal tender £1 each or gold value of around 320 times (at recent price levels) that? Same for gifts (I gifted Mr John Wick £1000 in UK legal tender coins, versus I gifted £320,000 in gold sovereign coins). I suspect legally it would be whichever were the higher value of the two.


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