tag:blogger.com,1999:blog-11906042.post2232148375960995584..comments2024-03-30T00:09:27.602+13:00Comments on Not PC: Bitcoin: What have you got?Peter Cresswellhttp://www.blogger.com/profile/10699845031503699181noreply@blogger.comBlogger15125tag:blogger.com,1999:blog-11906042.post-1571424456858818592013-12-31T10:20:11.259+13:002013-12-31T10:20:11.259+13:00The gold standard meant finite supply. Zero Sum Ga...The gold standard meant finite supply. Zero Sum Gains lead to wars of accumulation.<br /><br />Detaching currency from gold was a good idea. A brilliant one. Now each country is wealthy according to it's productivity, not to dig and find gold, or to extract it from other economies, but in the expectation of its government to be able to tax its citizens on their future income/wealth (measured in national currency, tradable and convertible via forwards, futures and swap markets - fixed income and bond markets - and therefore COMPARATIVLY valuable).<br /><br />Inflation is a political tool to make general tax-payers feel better. And to allocate wealth from the rich (old) to the poor soowl<br /><br />Imagine, a person works for 40 years and accumulates 40 gold bars. The person dies, but population has grown from 2b when the person was born, to 7b when they die. A lot more people needing "gold" than the gold bars could handle, if everyone wants/needs to retire with 40 gold bars.<br /><br />So, our "saver" dies. And passes 10 bars each to his children. Unless they spend that gold (generating 'velocity') it's effectively a ghost horde, useless to society.<br /><br />Or puts it in a bank (creating "credit")...<br /><br />Anyway - to cut a long story short, gold was a bad idea, economics is a much better way to compete than acquisition - and bitcoin is a waste of everyone's time, as it lacks almost every feature of a useful social tool, aside from short-term anonymity and a feeling that you have "out smarted the system".<br /><br />You haven't, by a long way. The social and physical cost of switching a major currency unit to based on bitcoin or anything that resembles the bitcoin network, are unimaginable.<br /><br />The biggest surprise, is that the US egulators haven't come out and said so in a factual and highly detailed way. But their relative incompetence compared to other regulators, is one of the reasons we're all rushing for.something new... <br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-69360537084683891432013-12-18T11:28:59.592+13:002013-12-18T11:28:59.592+13:00There are some misconceptions about gold in the mo...There are some misconceptions about gold in the modern era when compared with the old 'Gold Standard' days, and today most people are placing a 'value' on the wrong thing - because things have been reversed and few people seem to realise it has all been reversed.<br /><br />Three centuries ago 1 bank note (a UK pound, for instance) equalled 1 gold bar (of a specific weight); two centuries ago 1 bank note equalled 1 gold bar; one century ago 1 bank note equalled 1 gold bar.<br /><br />Today? 1 gold bar equals "______" bank notes (write whatever number you want in the blank space to make yourself feel richer)<br /><br />Back in the old days it was the UK pound note or US dollar, on the desk in front of you, which was important; - that bank note was equal to a certain amount of gold - and that amount was fixed, (and remained so for a considerable period of time.) - The gold itself was actually irrelevant.<br /> <br />Today you have lots of people placing a 1 ounce gold bar on the desk in front of them and thinking it is valuable and making them rich with the reasoning of<i> "the government is printing bank notes like there is no tomorrow so having the gold bar must be safer and true wealth"</i><br /><br />In reality, they have it all back to front.<br /><br />The gold bar has little or no intrinsic value because it is equal to as many bank notes as the government is prepared to print (you want it worth $800? fine - here you go; you want it worth $1500? sure - here you are...what about $2000? or $2500 don't worry we aren't running out of banknotes, we printed a new batch this morning ...)<br /><br />If you want stability, a lack of inflation or to view gold as a store of value or wealth you need to have the<i> BANK NOTES</i> equalling something which is fixed, not the other way around.<br /><br />Mr Lineberrynoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-45119267401026668352013-12-18T07:23:53.296+13:002013-12-18T07:23:53.296+13:00Dinther - The other factor you're don't se...Dinther - The other factor you're don't seem to consider is the extent to which the cost of mining gold determines its price. Regardless of how much the demand for gold might drop, there remains a high cost for producing gold that will limit how low the price can go in the long term.<br /><br /><br />Let's say the demand for gold reduced by 50% overnight. Initially you would see large price decreases, as the 'stockpiled' gold is sold and used up. However once that stockpile goes then you return to the fundamental economics of finding a material in the ground that is rare. Now long term the price would certainly drop, because only the 50% of gold producers who were the most efficient and had the lowest production costs would survive. But these remaining 50% will not be able to produce gold for a "mere fraction" of the cost of the others. The variance in cost between different companies and mining operations is not that dramatic.MarkThttps://www.blogger.com/profile/06199883270652041621noreply@blogger.comtag:blogger.com,1999:blog-11906042.post-16012442084343287312013-12-17T22:15:28.929+13:002013-12-17T22:15:28.929+13:00Dinther - Not sure I follow your logic there. If g...Dinther - Not sure I follow your logic there. If gold was only worth a fraction of the current price for industrial uses, then industry wouldn't be buying it at current prices. The fact they do use it means it is worth that much to them. Also you can't equate luxury items like jewellery (where most gold is consumed) as a "store of value". Most people I know would never think of selling their wedding rings and the like when they're a bit short of cash. The jewellery means something to them, so it may not have "intrinsic value" but it does have an objective value to the private life of the owners that a piece of paper confirming your ownership of Bitcoins could never have.MarkThttps://www.blogger.com/profile/06199883270652041621noreply@blogger.comtag:blogger.com,1999:blog-11906042.post-20663388282809533812013-12-17T13:58:26.558+13:002013-12-17T13:58:26.558+13:00Well Mark, according wikipedia only around 10% of ...Well Mark, according wikipedia only around 10% of gold is used by industry. That leaves 90% of the gold lying around for no other reason then jewelry, investment or value store. I think that a lot of jewelry is in fact used as a value store.<br /><br />It is not as if my bar of gold is ever going to be useful to me for anything else but selling it. The gold price would plummet to a mere fraction of it's current price if the remaining 90% of gold is offered all at once to be consumed for it's intrinsic value.Dintherhttps://www.blogger.com/profile/09444894238003853527noreply@blogger.comtag:blogger.com,1999:blog-11906042.post-58105509510342314652013-12-17T13:23:06.937+13:002013-12-17T13:23:06.937+13:00Bitcoinc is anonymous? I think not.
"Bitcoin ...Bitcoinc is anonymous? I think not.<br />"Bitcoin is not anonymous. Some effort is required to protect your privacy with Bitcoin. All Bitcoin transactions are stored publicly and permanently on the network..." <a href="http://bitcoin.org/en/you-need-to-know" rel="nofollow">http://bitcoin.org/en/you-need-to-know</a>Peter Cresswellhttps://www.blogger.com/profile/10699845031503699181noreply@blogger.comtag:blogger.com,1999:blog-11906042.post-61395945421917811192013-12-17T12:47:40.185+13:002013-12-17T12:47:40.185+13:00Fundamentally I struggle with the concept of bitco...Fundamentally I struggle with the concept of bitcoin, because there's nothing of inherent value (what Schiff calls "intrinsic value") behind the currency at all. Sure, the gold price may fluctuate wildly due to speculation and at times its sell value may exceed it's value as a commodity - but the point is it does have a value as a commodity; a tie to something real and tangible.<br /><br />I understand that until very recently the majority of gold produced in the world each year was consumed for a variety of uses, mainly in jewellery production. It's a product valued for jewellery production because it has attributes good for that purpose - it's malleable, shiny, etc. I'd be happy to be proven wrong, but I can't see how bitcoin has that same tie to reality.MarkThttps://www.blogger.com/profile/06199883270652041621noreply@blogger.comtag:blogger.com,1999:blog-11906042.post-59312994735523231422013-12-17T12:23:51.245+13:002013-12-17T12:23:51.245+13:00Most of the news articles I have seen on the Bitco...Most of the news articles I have seen on the Bitcoin payment platform seem have been written by people with no idea of how or why they work.<br /><br />There are lots of other pro's and con's<br /><br />Pro's include free transactions, no chargebacks, and my favourite, finally the possibilty of micro payments. Plus all the pro's you have already figured out like anonymity, online payments etc<br /><br />Con's include no chargebacks and volatility atm.<br /><br />Litecoin which is similar has surged in the last few weeks from $10 to around $30. <br /><br />HerAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-22485908608516985792013-12-17T10:37:53.099+13:002013-12-17T10:37:53.099+13:00I tend to agree with you Ben, but don't just l...I tend to agree with you Ben, but don't just look at bitcoin. There is a reason it becomes popular now. People might revert to gold but history shows that can be outlawed too. But people always find ways. Although a bit idealistic, Have a look online for "Time banking"<br /><br />A great example of invisible transactions was shown a while back on the "Grand designs" tv show where builder mates do each other "favours" off the record in order to build or improve each others houses.<br /><br />Governments may be banning bitcoin but it will soon become a whack a mole game as new ways to conduct transactions continue to appear.Dintherhttps://www.blogger.com/profile/09444894238003853527noreply@blogger.comtag:blogger.com,1999:blog-11906042.post-44399915683626243342013-12-17T10:02:01.141+13:002013-12-17T10:02:01.141+13:00Anyone who thinks governments can't or won'...Anyone who thinks governments can't or won't mess with bitcoin users is deluded as hell. The recent move by the Chinese govt is only the beginning.Bennoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-86142731392413985872013-12-16T18:12:07.123+13:002013-12-16T18:12:07.123+13:00Bitcoin on it's speculative value which I agre...<i>Bitcoin on it's speculative value which I agree is rubbish since you can't buy much with it yet</i><br /><br />Not true, BitCoin is easily converted to cash - at surprisingly high rates right now.<br /><br />It's also a bit like gold for those who care in that there is a limited supply - for some reason (I don't know if it was arbitrary design or a consequence of the cryptographic organization) there's a limit of 21 million total BitCoins.<br /><br />I suspect BitCoin will last as long as a) governments don't, as part of their general assertion of authority, assault the exchanges and b) people remain confident the protocol has not been corrupted (which would be a focus of assaults on it by authority should they take against it).Fentexnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-54341122678043072972013-12-16T15:46:35.818+13:002013-12-16T15:46:35.818+13:00Do you see any chance of the value settling down?
...<i>Do you see any chance of the value settling down?</i><br /><br />It only, in my mind, has a philosophical value (and I love it for that): there's no way to apply economic analysis to it outside simple demand and supply. Unfortunately, with it already banned in China, I suspect Western taxing authorities will at some stage set to it in a passion akin to the state's war on drugs. They can't leave it unhindered in the wild after the next Western economic collapse, which may not be that far off, and will make August 2008 look like a walk in the park. If BT is a bubble, so is almost every asset class in the West given the cure for the GFC was more of what caused it.<br /><br />I could be wrong :)Mark Hubbardhttps://www.blogger.com/profile/02541153163041831880noreply@blogger.comtag:blogger.com,1999:blog-11906042.post-28225045726123580712013-12-16T15:33:27.630+13:002013-12-16T15:33:27.630+13:00I have been a fan of the concept of bitcoin since ...I have been a fan of the concept of bitcoin since I first heard about it in 2011 (in fact I started the first NZ exchange at bitnz.com).<br /><br />It is important to make the distinction between bitcoin (the currency unit) which does not have any utility itself and Bitcoin (the protocol and network) which allows a global distributed ledger apart from any central clearing house (and the counter party risk that goes with that). This is a huge technology, just as email revolutionised communication this can revolutionize finance and it has much more possible uses other then just currency.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-20680795768917053312013-12-16T15:18:55.367+13:002013-12-16T15:18:55.367+13:00Hi Mark, I was hoping you would comment. You autom...Hi Mark, I was hoping you would comment. You automatically judge the Bitcoin on it's speculative value which I agree is rubbish since you can't buy much with it yet (If ever).<br /><br />Do you see any chance of the value settling down?Dintherhttps://www.blogger.com/profile/09444894238003853527noreply@blogger.comtag:blogger.com,1999:blog-11906042.post-74598494301144297732013-12-16T15:12:24.676+13:002013-12-16T15:12:24.676+13:00I've been following Bitcoin since before it ga...I've been following Bitcoin since before it gained the eye of the MSM. I admit it's value is nothing other than the hope someone will pay more for it tomorrow than you paid for it today, and that with no government guarantee to the nation's taxpayers it is even more a fraud than government printed fiat money, but philosophically I'm LOVING it. It's rattling the cages of every taxing authority that cannot use its vast array of snooping powers to unwind individual transactions, and hence, it's frightening the politicians.<br /><br />To the IRD when they read this - as they read my blog - I hold no Bitcoin. (Mainly because I couldn't figure out how to mine the damned stuff :) )<br /><br />Mark Hubbardhttps://www.blogger.com/profile/02541153163041831880noreply@blogger.com