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Merged Bitcoin - Part 3

ChrisBFRPKY said:
A transaction on Coinbase is instant, no waiting if your coins are already there. As are transactions for the crypto based cards instant. The transactions on the cards actually clear faster than normal card transactions from a bank.

Bitcoin isn't for everyone. I find it more enjoyable and productive to listen to Jimmy Buffet rather than Warren. Because of the generation gap, he really doesn't know what he's talking about. Literally, he doesn't know how it works and it scares him. Ask Warren how he did on his oil stocks back in March 2020....He should have bought Bitcoin.
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psionl0 said:
If one of the big features of bitcoin is intermediary-less transfers then it isn't logical to make a feature of the fact that you can use a third party to help speed up your transactions. You can also use the Ripple or Stellar network to make transactions faster but you still need to be able to trust the intermediary that you run the transactions through.

Better to admit that Bitcoin isn't especially useful for over the counter transactions. Bitcoin is designed to take mistrust into account so you aren't going to find too many merchants who will accept zero confirmations before letting go of their wares.
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That is the catch isn't it? Any fast transaction really isn't an actual bitcoin transaction and even though coinbase is able to make the transaction fast, it could never scale to what other currencies can accomplish which are doing real transactions in real time. A coinbase transaction is not the same as a bitcoin transaction, kinda like when I use my Starbucks app to buy a Starbucks coffee. This is an important point I want to make because no matter where bitcoin goes, it will always be tightly tethered to other currencies that can perform functions that it will never be able to perform. Even the biggest bitcoin fan will care, and will care deeply, what the exchange rate is between bitcoin and the US dollar.
 
Dr.Sid said:
Sadly I only read it when it was over. Also I don't really trust anyone on the internet, especially here, as skepticism as a virtue here :D
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I wasn't asking for anyone to trust me, I was advising everyone to look at the charts.

Some here are traders and or investors in BTC. Those are the folks that recognize when we have confirmed short squeezes and shakeouts going on, the bulls are running and the price will increase soon, this activity is visible in the charts and historically precedes a price increase and possible new all time highs.

I will admit that sometimes I post some things well in advance and maybe a bit cryptic for fun to give some a brief edge. Sometimes I get bored staring at the morning stars during the early AM and I'll pop in for a few posts to help my fellow man. I don't ask anyone for trust, I remember that good skeptics do some verification after the fact. As sure as the Sun rises in the East. ;)
 
portlandatheist said:
That is the catch isn't it? Any fast transaction really isn't an actual bitcoin transaction and even though coinbase is able to make the transaction fast, it could never scale to what other currencies can accomplish which are doing real transactions in real time. A coinbase transaction is not the same as a bitcoin transaction, kinda like when I use my Starbucks app to buy a Starbucks coffee. This is an important point I want to make because no matter where bitcoin goes, it will always be tightly tethered to other currencies that can perform functions that it will never be able to perform. Even the biggest bitcoin fan will care, and will care deeply, what the exchange rate is between bitcoin and the US dollar.
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It's not like you can carry physical Bitcoin with you like you can cash. But just as you use your bank card to pay for items with the cash in your bank, you can do exactly the same with a card that is funded by Bitcoin.

I don't like cash now myself (I fear Covid bugs may be crawling on it.) I prefer to use my card whenever I make a purchase.

Nobody claims Bitcoin is perfect. It's just a good store of value.

About the exchange rate between Bitcoin and the US dollar, yes it's important. But if you'll notice it gets cheaper to buy things with Bitcoin over time and more expensive to buy things with US dollars. Think about why that is and you're onto something.
 
ChrisBFRPKY said:
Saying that Coinbase sells or trades their customer's Bitcoins or invests them is the problem that doesn't exist.
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How do you think they can make "instant transactions"? They can do it because "your" bitcoin is just a book keeping entry to them. They are functioning like a bank does wrt demand deposits, what you really own isn't bitcoin it's an IOU from coinbase to give you bitcoin when you ask for it. As shown above, however, these deposits are not eligible for deposit insurance because bitcoin isn't legal tender.



You should also consider how they get the $billions in dollar denominated assets that are serving as "insurance" for your bitcoin. They are certainly not using tens of billions of dollars of their own money.
 
ChrisBFRPKY said:
By using Bitcoin as a store of value, then combining that with the convenience of a bank card, it's no issue to buy a cup of coffee instantly with that card. In the end you are using your Bitcoin to pay for the coffee exactly the same as if you were using a bank card funded by cash deposits. Except the Bitcoin funded card clears faster than the cash funded bank card.
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You are missing the point that once you have to rely on a 3rd party to complete a bitcoin transaction you negate one of the biggest selling points of bitcoin.

Of course, if your favorite shopkeeper/publican lets you put things on the slate then they may accept zero confirmations and you would still get by without a 3rd party. I don't think that this is widespread though otherwise the transaction fees would rise dramatically since bitcoin doesn't scale.
 
psionl0 said:
You are missing the point that once you have to rely on a 3rd party to complete a bitcoin transaction you negate one of the biggest selling points of bitcoin.

Of course, if your favorite shopkeeper/publican lets you put things on the slate then they may accept zero confirmations and you would still get by without a 3rd party. I don't think that this is widespread though otherwise the transaction fees would rise dramatically since bitcoin doesn't scale.
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I get that. As a crypto currency there are much better options than Bitcoin as many coins have shorter block times. Bitcoin is not the fastest product on the market.

Bitcoin is not the answer for every problem within our financial institutions but it does have its advantages and solves several specific problems. I've never shared the view that Bitcoin would ever replace the US dollar as a currency, only that it is good for working with the US dollar as a store of wealth.

I don't believe gold will ever replace the US dollar either. I do believe it is much easier and faster to transfer large amounts of wealth by using Bitcoin rather than US dollars or gold though.

My point was/is that if we use Bitcoin mainly as a store of value, the same as we do with cash in a bank, and we tap into that stored value by using it with a card for everyday transactions, as we do with cash in a bank, Bitcoin is a better option than cash in a bank. It also works much better as a store of value than things like gold.

If nothing else, the value of the Bitcoin stored over time, tends to go up, in contrast the value of the US dollar tends to go down with rising inflation. I'm sure you remember when a couple of pizzas used to cost 10,000 Bitcoin. Soon that amount of Bitcoin will likely fund a pizza chain. As things increase in US dollar price over time the same things decrease in the price of Bitcoin over time.

One good deposit of Bitcoin to fund an account will likely last a very long time if not indefinitely. Unless one needs a new Lamborghini more often than not of course.
 
lomiller said:
How do you think they can make "instant transactions"? They can do it because "your" bitcoin is just a book keeping entry to them. They are functioning like a bank does wrt demand deposits, what you really own isn't bitcoin it's an IOU from coinbase to give you bitcoin when you ask for it. As shown above, however, these deposits are not eligible for deposit insurance because bitcoin isn't legal tender.



You should also consider how they get the $billions in dollar denominated assets that are serving as "insurance" for your bitcoin. They are certainly not using tens of billions of dollars of their own money.
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Entertaining paranoid thoughts about ways of losing wealth is part of what drives me to take so many precautions. I can appreciate the sentiment. Another reason I won't go anywhere near the stock market.
 
ChrisBFRPKY said:
My point was/is that if we use Bitcoin mainly as a store of value, the same as we do with cash in a bank, and we tap into that stored value by using it with a card for everyday transactions, as we do with cash in a bank, Bitcoin is a better option than cash in a bank. It also works much better as a store of value than things like gold.
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In this instance it is not actually. The deflationary nature of bitcoin plus the need to offer transaction fees act as a disincentive to spending bitcoin.

If you want a crypto to be better than cash in a bank then it needs to have an inbuilt spending incentive. This can be achieved either by making it inflationary (the new coin generation rate increases exponentially over time) or it needs to be subject to demurrage. Either could form part of a block reward for the miners instead of transaction fees. Make such a currency readily interchangeable with bitcoin and you are a step closer to the libertarian dream.

Freicoin attempted to be such a currency but it still had transaction fees and you had to go through an exchange if you wanted to exchange them for any other currency so it didn't take off.
 
psionl0 said:
In this instance it is not actually. The deflationary nature of bitcoin plus the need to offer transaction fees act as a disincentive to spending bitcoin.

If you want a crypto to be better than cash in a bank then it needs to have an inbuilt spending incentive. This can be achieved either by making it inflationary (the new coin generation rate increases exponentially over time) or it needs to be subject to demurrage. Either could form part of a block reward for the miners instead of transaction fees. Make such a currency readily interchangeable with bitcoin and you are a step closer to the libertarian dream.

Freicoin attempted to be such a currency but it still had transaction fees and you had to go through an exchange if you wanted to exchange them for any other currency so it didn't take off.
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I think making a cryptocurrency inflationary would be a terrible idea. The value would only decrease over time. As more coins are available, the price would only go down.

I still maintain that BTC is better than cash if only for this reason:

I just checked my bank account a short while ago, the amount is exactly the same as it was yesterday.

I also just checked my trading portfolio during this post. (I dusted off my trading coins recently). As I was looking at the $ amount, not only is there more $ value in there now but it's increasing in $ value a bit more at the moment. To me, that's why BTC is better than cash.

I'll admit BTC is not the Libertarian dream. Monero would be much closer IMO but this is the BTC thread so there ends that.
 
ChrisBFRPKY said:
I think making a cryptocurrency inflationary would be a terrible idea. The value would only decrease over time. As more coins are available, the price would only go down.
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That's the whole idea. The proceeds of inflation or demurrage would replace transaction fees. Neither is a problem if you are doing frequent transactions.

Bitcoin is designed to be hoarded. You can't make the illogical leap that it is also designed to do transactions.
 
Winkelvoss bros get last laugh.
Worth 10 billion each.
Zuckerburg has given away 99% of his money.
The bros will make no such strategic error in their path to world domination.
 
Samson said:
Winkelvoss bros get last laugh.
Worth 10 billion each.
Zuckerburg has given away 99% of his money.
The bros will make no such strategic error in their path to world domination.
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I know these names, I know what happened with the beginning of FB.

But WTF is this? I don't even get the joke. Sorry.


I hear bitcoin went above 50 grand today (or yesterday or whenever). I wonder how much my brother invested? He said he was doing quite well when it was at 47K. I wonder if he should pull some of the profit out and diversify? (He does have other stock investments.) Probably hard to do that when it's going up so fast.

I'll be leaving my $100 in. That was the point, I could afford to lose it.
 
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Welcome to the Shakeout and FUD stages.

:wackyunsure:


Added info: I'm sure this has absolutely nothing to do with the stock market being held up with match sticks for the past year...or the impending stock market implosion...
 
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ChrisBFRPKY said:
Welcome to the Shakeout and FUD stages.

:wackyunsure:


Added info: I'm sure this has absolutely nothing to do with the stock market being held up with match sticks for the past year...or the impending stock market implosion...
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Which has been being predicted for the last goodness-knows how long.

Which is not to say that it couldn't happen tomorrow, but pundits have predicted about fifty of the last five bear markets.
 
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