Crypto Bubble

[absolutezero]

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/

Ah ha! But the devil is in the details.

Is a single satoshi really a discrete unit in the original protocol or is it a unit one now holds with an organisation e.g. Coinbase who are *always* destined to be the bicoin address?

This is an important point, if it is the latter, then ones satoshi is no longer entirely decentralised (coinbase are ones central bank so to speak), furthermore all it takes is one crook at coinbase and ones sats have all gone missing.

Matt

You can send your BTC from coinbase's wallet to your own personal wallet if you wish.
A bit like if you don't like holding your shares in shared nominee format, you can dematerialise it into a certificate in your own name.

[moneybagz]

Taleb is cashing in (twitter):

"I've been getting rid of my BTC. Why? A currency is never supposed to be more volatile than what you buy & sell with it.
You can't price goods in BTC

In that respect, it's a failure (at least for now). It was taken over by Covid denying sociopaths w/the sophistication of amoebas"

[TheMotorcycleBoy]

Currently I have no concerns that criminals will manage to spend nation state levels of money on quantum computing to attack crypto-currencies, though I suppose that it is something that some nation might consider.

Not now, no.

But in future, perhaps in 2 or 3 decades, I'd not be surprised.

Matt

[Urbandreamer]

Currently I have no concerns that criminals will manage to spend nation state levels of money on quantum computing to attack crypto-currencies, though I suppose that it is something that some nation might consider.

Not now, no.

But in future, perhaps in 2 or 3 decades, I'd not be surprised.

Matt

Back TO the future, possibly we need an Isaac Newton.

https://www.thevintagenews.com/2017/05/ ... %20anarchy.

[Urbandreamer]

Ok, I've had a bit to drink.

However can I recommend a fictional book, rather than a book about the reality of bitcoin.
https://www.amazon.co.uk/Enemy-State-La ... 043&sr=8-1

In this fiction the state is destroyed by the very thing that it uses to control people, money.

We may disagree, but if so then why can't the state let go of money and simply ask us to support the state. Hell they can even continue with tax. As has been pointed out in this thread, bitcoin isn't exempt from CGT.

By the way, my tax expert claims that you probably would be exempt from CGT if you invested in Swedish Krona or US Dollars, unlike bitcoin. Though they did point out that you could be subject to income tax if you made money trading.

[hiriskpaul]

Ok, I've had a bit to drink.

However can I recommend a fictional book, rather than a book about the reality of bitcoin.
https://www.amazon.co.uk/Enemy-State-La ... 043&sr=8-1

In this fiction the state is destroyed by the very thing that it uses to control people, money.

We may disagree, but if so then why can't the state let go of money and simply ask us to support the state. Hell they can even continue with tax. As has been pointed out in this thread, bitcoin isn't exempt from CGT.

By the way, my tax expert claims that you probably would be exempt from CGT if you invested in , unlike bitcoin. Though they did point out that you could be subject to income tax if you made money trading.

Your tax expert is partially right but there is nothing special about the tax treatment of Swedish Krona or US Dollars. If you hold foreign currency and convert it to sterling, it is not subject to CGT. But if you sell an asset and receive foreign currency for it you have to work out the value of that asset in pounds on the day of disposal and subtract the value in pounds on the day of acquisition. So if you had a USD denominated asset that you sold for the same price in dollars that you paid, you may still be liable for CGT if the pound had dropped against the dollar while you held the asset. The CGT rules do mean though that if you have foreign currency in a brokers account from an asset disposal, you don't have to worry about fluctuations in exchange rates between the time you sold and the time you converted to sterling. Doesn't apply to companies though, CT is chargeable on all gains from currency transactions.

CGT does not apply to gains on UK legal tender gold coins by the way (sovereigns, Brittanias, etc) but does on foreign gold coins.

[1nvest]

Trivia :

Start of 1972 to end of 2019
Using data from FRED (year end 3pm gold price fix in £, and £/$ exchange rate) and ONS (RPI)

If held hard currencies (gold, £ and $ notes stuffed under a mattress) and at each year end you rebalanced holdings back to equal capital values, then at the end of 2019 the value of those holdings would have declined -1.5% annualised relative to RPI (that annualised 5.7%). i.e. if instead the £ and $ each earned 2.25% annualised versus 5.7% inflation then inflation would have been negated

If held just $ and gold 50/50 yearly rebalanced then ... that maintained inflation value (+0.2% annualised real gain)

If you started with 50/50 gold and $ and didn't rebalance then that annualised a 1.9% gain, with asset drift having drifted from a initial 50/50 capital value of both $ and gold to end with 97% of the value in gold, 3% in $ ... i.e. the $ declined relative to gold (equally the £ declined relative to the $ (which in turn declined relative to gold)).

If you held just gold alone, then that increased at a rate of 3.3% annualised real, BUT in a sporadic manner, increasing a lot over some periods, falling back down again over other periods (volatile and very much start and end date subjective). Rebalancing such as between gold and $ helped considerably - as over prolonged declines in the price of gold the number of ounces of gold being held as a result of rebalancing expanded considerably, whilst over other periods ounces of gold held declined to expand the number of $ bills being held.

That's the nature of Fiat currencies that are backed by nothing tangible. Governments can simply print money to devalue the currency, promoting money to be invested (in the hope of countering inflationary erosion of the purchase power of money) instead of just being idle/stored. Typically/broadly the US$ has declined relative to gold, and the £ has declined relative to the US$. But not always, that 'correlation' can invert for periods of time.

[JamesMuenchen]

TMF buys $5 million in bitcoin
https://www.fool.com/investing/2021/02/ ... stment-in/

Is that Wise?

[DiamondEcho]

'In addition to this portfolio allocation in 10X, in the coming weeks The Motley Fool will also be separately buying $5 million in Bitcoin on our own balance sheet. We will not only wait for all of our members in 10X to be able to buy before we buy our 10X allocation, but we’re also giving all Motley Fool members a chance to review this guidance before we separately stake $5 million of The Motley Fool’s own capital. '

The Fool used to be very wise, really, until it fully sold out to advertising power in about c2010.

Since then it's just gone downhill. The above (quote) is simply grotesque, are they now a registered investment advisors too, giving blanket advise to 'all our members' orrespective of their profiles and goals?

This seems completely wreckless to me.

[GeoffF100]

This seems completely wreckless to me.

It looks reckless to me, but we will have to wait and see whether it ends in a wreck. It seems that there is more money to be made from a tip sheet than there is from education. Nonetheless, they do seem to have done surprisingly well:

https://www.wallstreetsurvivor.com/motl ... rformance/

That does not mean that they will do well in the future though.

[Leif]

I was a Bitcoin sceptic, but even one of its creators now refers to it as Gold 2.0. Current total worth is one trillion $ compared to 50 trillion $ for the US stock markets, so from a naive perspective it could pop without too much fallout. Maybe that is too naive an assessment. What value does it need to reach before a crash causes collateral damage?

[dspp]

An ARK article on debunking bitcoin myths,
https://ark-invest.com/articles/analyst ... oin-myths/

Personally I've no opinion, regards, dspp

[Lootman]

An ARK article on debunking bitcoin myths,
https://ark-invest.com/articles/analyst ... oin-myths/

Personally I've no opinion, regards, dspp

That's a good article, rational and balanced.

I am naturally inclined towards bitcoin as the idea of a neutral and anonymous store of value that cannot be controlled or debased by politicians. As the article says it is a form of digital gold. And even the criticism that bitcoin requires large amounts of energy is debunked by showing how mining gold is even more energy-intensive.

At the same time it is not simple to invest in. It is only recently that there have been a couple of ETFs, and there is still not a bitcoin ETF trading in the US. There is a US-traded closed-ended fund but that is currently trading at a huge premium to NAV, as you might expect.

There are some shares as well, like Riot Blockchain (ticker RIOT), which has been on a tear recently, and is actually more volatile then the coin itself. When I decide to play in this space, and I am willing to gamble 1% or 2% of my net worth in it, I may use options on RIOT or similar.

[Bubblesofearth]

An ARK article on debunking bitcoin myths,
https://ark-invest.com/articles/analyst ... oin-myths/

Personally I've no opinion, regards, dspp

A shame it misses the most obvious reason why bitcoin is unlikely to ever become the Global currency of choice which is that Governments and central banks are unlikely ever to allow it to. They have no control over it and would not be able to manage money supply with it. Whether you believe this is a good or bad thing is beside the point, Governments long ago abandoned the gold standard for much the same reasons.

Until I can pay my taxes in Bitcoin I shall continue to view it with scepticism. But like the meteoric rise of any asset it's fun watching from the sidelines.

BoE

[Lootman]

the most obvious reason why bitcoin is unlikely to ever become the Global currency of choice which is that Governments and central banks are unlikely ever to allow it to. They have no control over it and would not be able to manage money supply with it.

There is a bit of a contradiction there, however. Since governments have "no control over it" then they are unable to stop its use becoming more widespread.

It is rather like the way that the US dollar is common currency in a number of developing nations where, for a variety of reasons, the people there do not trust the government, nor the local currency that it issues and routinely debases.

In fact I don't think I have ever had US currency refused as payment in a third world nation, and it was not unusual to get better value than offering to pay in local currency.

[dspp]

In fact I don't think I have ever had US currency refused as payment in a third world nation.

Unlike the GBP sterling pound ........

[JohnB]

https://ark-invest.com/articles/analyst ... oin-myths/

“Prolific resource consumption and poor computational scalability unlock the security necessary for independent, seamlessly global, and automated integrity.”

Since we adopted the leaf as a currency, we have observed massive inflation, and our response has been to initiate a programme of burning down the forests.

This kind of dismissal of bitcoin's energy requirements being "only" 10% of global banking really annoys me. Its good to see Nvidia are nobbling their GPU designs so they are much less efficient miners.

[GoSeigen]

https://ark-invest.com/articles/analyst ... oin-myths/

“Prolific resource consumption and poor computational scalability unlock the security necessary for independent, seamlessly global, and automated integrity.”

Since we adopted the leaf as a currency, we have observed massive inflation, and our response has been to initiate a programme of burning down the forests.

This kind of dismissal of bitcoin's energy requirements being "only" 10% of global banking really annoys me. Its good to see Nvidia are nobbling their GPU designs so they are much less efficient miners.

Agree, the article addresses none of the serious criticisms of Bitcoin except the energy one, where it fails completely with this disgusting paragraph:

"Bitcoin critics often assert that mining consumes more resources, specifically energy, than the benefits it creates. What critics deem computationally inefficient and unscalable, however, advocates consider not only an intended tradeoff but a fundamental feature. As highlighted by founder of Bit Gold and Bitcoin pioneer, Nick Szabo, “Prolific resource consumption and poor computational scalability unlock the security necessary for independent, seamlessly global, and automated integrity.”"

Apparently there is nothing wrong with having a wasteful and inefficient system because the point is that we actually want a wasteful and inefficient system, the more wasteful the better. Moral compass non-existent...

[Urbandreamer]

This kind of dismissal of bitcoin's energy requirements being "only" 10% of global banking really annoys me. Its good to see Nvidia are nobbling their GPU designs so they are much less efficient miners.

Err, have you thought that one through? You want mining Bitcoin to be less efficient and hence use MORE energy? More GPU's? More waste?

By the way, unlike banking, nobody knows how much energy is used mining Bitcoin. The SI unit "the size of Argentina" is based upon Cambridge Universities Estimate. They have an online tool don't you know. You can play with the cost of electricity and the cheaper it is, helping the poor, the more electricity will be used mining Bitcoin. At least according to the model used to produce the "size of Argentina" value.

https://cbeci.org/
https://www.bbc.co.uk/news/technology-56012952

Possibly we should double the cost of electricity to hamper bitcoin. Or increase it by a magnitude. The "size of Argentina" is based upon 5c/KWh.

Oh, it is worth visiting that university link and looking at their methodology and the facts that they gathered. I'm sure that you won't be happy to hear that for a given amount of work, the mining equipment now uses a 20th the power that it did. Bar Humbug! It should use more so that Bitcoin mining is unprofitable.

PS, Nvidia specifically nobbled etherium, not bitcoin and it's more about selling two products rather than one that can do two jobs.

This morning, Nvidia announced that it would artificially reduce the performance of its upcoming $329 GeForce RTX 3060 graphics card when it comes to one specific task: Ethereum cryptocurrency mining.
...
I was also a bit skeptical that the company’s new batch of Cryptocurrency Mining Processor (CMP) cards, marketed as an alternative for those miners, would mean that gamers might actually be able to buy an RTX 3060 as a result.

https://www.theverge.com/circuitbreaker ... eth-mining

[Lootman]

Apparently there is nothing wrong with having a wasteful and inefficient system because the point is that we actually want a wasteful and inefficient system, the more wasteful the better. Moral compass non-existent...

Unless you are one of those "socially conscious" investors then I fail to see why it matters.

I seek the best risk/reward setup I can get without regard to the perceived ethics of any investment. I have now or in the past invested in frackers, arms producers, tobacco companies, alcohol companies, miners, casinos and so on. So the fact that bitcoin may (or may not) consume a lot of energy is not going to put me off.

If I feel that bad about the morality of an investment then I can always donate some of my profits to a relevant charity.