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    Bitcoin Made Simple

    Finally explained in plain English by a respected crypto expert
    by Adam Taggart

    Friday, October 9, 2020, 9:14 AM

Whether you understand it or not, Bitcoin and other ‘distributed ledger’ technologies are spreading at an accelerating rate across the world.

Bitcoin awareness pollBitcoin preference chart

Odds are very high they will disrupt and transform nearly every business model in today’s economy, much in the same way the advent of the Internet did.

Crypto projected adoption reate

But most people are still unfamiliar with this new technology, and concerned that their lack of understanding may leave them obsolete dinosaurs in the coming future should crypto indeed change the nature of money and commerce.

This is why we’ve brought on this week’s guest expert, Alex Saunders, respected Bitcoin/blockchain/crypto maven to demystify the topic and explain it all to us in plain layman’s English.

What is it? How does it work? What benefits does it offer? Should you own any? If so, how should you buy it? All these fundamental questions and more are addressed.

We’re tackling this topic now not only because a number of our viewers have been requesting we do so, but also because it dovetails with the insights our previous market and economic guest experts have shared. The world’s fiat monetary systems are being highly abused, deformed and distorted right now, with $trillions in new currency being wantonly conjured at-will by global central banks. This debases the purchasing power of our capital, and leads to dangerous asset price bubbles and reckless malinvestment.

This trajectory will not end well. We need sound money and better models going forward.

Will blockchain-based technologies be part of that solution? Quite possible. Which is why we all should start investing the time to learn at least the basics of them now:

Anyone interested in scheduling a free consultation and portfolio review with Mike Preston and John Llodra and their team at New Harbor Financial can do so by clicking here.

And if you’re one of the many readers brand new to Peak Prosperity over the past few months, we strongly urge you get your financial situation in order in parallel with your ongoing physical coronavirus preparations.

We recommend you do so in partnership with a professional financial advisor who understands the macro risks to the market that we discuss on this website. If you’ve already got one, great.

But if not, consider talking to the team at New Harbor. We’ve set up this ‘free consultation’ relationship with them to help folks exactly like you.

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139 Comments

  • Fri, Oct 09, 2020 - 11:43am

    #1
    macro2682

    macro2682

    Status: Gold Member

    Joined: Sep 03 2009

    Posts: 407

    1

    GBTC Exposure

    I realize it's not perfect as it relates to NAV tracking, but my current (and only) exposure to BTC is through the Grayscale product via eTrade.  Does this count (from a risk perspective) as exposure?

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  • Fri, Oct 09, 2020 - 12:53pm

    #2
    centroid

    centroid

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    0

    is quantum computing a threat to bitcoin and if so can it be fixed?

    is quantum computing a threat to bitcoin and if so can it be fixed and if it can be fixed then how?

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  • Fri, Oct 09, 2020 - 6:54pm

    #3
    suffix101

    suffix101

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    Joined: Mar 21 2020

    Posts: 19

    1

    Blockchain

    Blockchain is definitely something worth paying attention to. Cryptocurrencies are only one aspect, but perhaps the most common. Yet, very volatile.

    Anyone familiar with Pi Network? I just read their white paper. Created by Stanford University PhD Graduates. Early phase so it’s not worth anything yet (same as Bitcoin in the early days), but interesting nonetheless and completely free. It’s invite only, so if you’re interested in a closer look you can use the code { suffix101 } to get in. Not trying to promote it, just genuinely curious to hear your thoughts on this one. Seems promising to me. Just Google ‘Pi Network’.

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  • Fri, Oct 09, 2020 - 6:56pm

    #4
    vshelford

    vshelford

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    interesting...

    Thanks for setting this up, Adam.  I'm not sold on the concept at this point, but that might just be my age.  A couple of points stood out - first, Alex said something about "if we all agree that this is the new store of value..." then cryptocurrency would work so well for so many reasons.  It may happen, but it takes a long time for a statistically significant number of people to agree on ANYTHING.  Inertia plays a big role here.  Also, the whole aspect of "no government control" would probably take a back seat to whatever is legislated as an acceptable form in which to pay taxes.  While this doesn't remove cryptos as an alternative currency, it makes it less likely that it would become mainstream.  And if the government does accept some form of distributed ledger currency, my bet is that they'd have a finger in that pie.

    I'm also still concerned about the energy use involved, just because, on the other side of the PP set of probabilities, we could well be looking at less technology and fewer reliable energy sources, rather than more, going forward.

    But who knows?  So many possibilities, so many brick walls to butt our heads against.  Not sure which is which 🙂

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  • Fri, Oct 09, 2020 - 7:00pm

    #5
    dryam2000

    dryam2000

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    Posts: 149

    4

    2 Predictions

    1). BTC will never be used to buy oil.

    2)  Government/Fed will crack down on use of all non-Fed approved cryptocurrencies in some form or fashion.  Crypto is traceable, but difficult to do so.  Solution is make rules/taxes limiting it, and crack down extremely hard on the few people they catch breaking rules or evading taxes.

    I totally get the theoretical asymmetrical risk/reward ratio of BTC, but of all powers that TPTB have controlling money is by far, without a doubt, the strongest and most important power they have.

    ”Whoever controls the volume of money in our country is absolute master of all industry and commerce…the entire system is very easily controlled, one way or another, by a few powerful men at the top."

    “He who controls the money supply of a nation controls the nation.”

    -James Garfield, the second U.S. president to be assassinated.

    The central banks will not allow alternative currencies.  The Fed is coming out with their own soon.  All transactions will have tracking information....for your own good & protection.

     

    And, just for fun, I highly recommend this video as a bonus which is a few steps beyond crypto.  A little preview...that bald guy in the upper right hand corner of the YouTube will give you the warmest of all warm fuzzies when you watch it.





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  • Fri, Oct 09, 2020 - 7:49pm

    #6
    Barbara

    Barbara

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    What happens when infrastructure can't be maintained? Is there a plan?

    Gold and land don't require power, internet, etc. to buy something.  Global warming, overpopulation, resource limitations and political instability could lead beyond big power outages and server farm crashes to a possible inability to maintain our current cloud infrastructure.  So what happens to your bitcoin if there is no global internet to maintain that market?

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  • Fri, Oct 09, 2020 - 8:51pm

    #7
    Mohammed Mast

    Mohammed Mast

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    LOL

    I guess better late than never

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  • Fri, Oct 09, 2020 - 8:55pm

    #8
    Mohammed Mast

    Mohammed Mast

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    BTW

    Every concern raised about BTC and other crypto currency from Gubmint to privacy and power usage has been addressed ad infinitum by me and others. Yet the same people keep raising the same issues which are really non issues. I guess it is fear borne of ignorance.

    I suggest knowing a little something about it before commenting.

    There are almost 8 billion narratives on the planet and you get to choose. Isn't that amazing?

     

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  • Sat, Oct 10, 2020 - 5:25am

    zshilor

    zshilor

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    Quantum Computing

    Quantum Computer capabilities to disrupt Bitcoin are not near the next corner. It will take years to get there, if at all. Bitcoin developers are on the top of it and will have enough time to prepare Bitcoin if needed. It is believed that the technology to ramp up the security level is known and implementable.

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  • Sat, Oct 10, 2020 - 5:41am

    zshilor

    zshilor

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    3

    Energy concerns

    The prospects are that sooner than later, renewable energies will dominate. So Bitcoin miners will mine with only renewable energy, otherwise they will lose in the block generation cost to profit equilibrium and vanish.
    The energy is tied into Bitcoin security. We need to remember that a lot of energy is spent on the security of fiat currencies like the US Dollar, to prevent counterfeit, thefts, bank frauds, computer and communication defense, backups,  and the like.

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  • Sat, Oct 10, 2020 - 5:46am

    zshilor

    zshilor

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    Money Control

    There is one thing I hope, that the powers you mentioned didn't invent Bitcoin. Under this assumption, I don't see how they can win. I believe that they have already lost.

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  • Sat, Oct 10, 2020 - 5:54am

    davefairtex

    davefairtex

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    quantum & resistance to change

    The software fix to quantum vulnerability is definitely doable - its not even that hard.  However making such a change will immediately create winners and losers.  Every miner with the current mining hardware will instantly become a loser, since their mining hardware will not work with the new quantum-proof mining code.

    That's billions of dollars just flushed down the toilet for these miners.

    What do you imagine they will do?  Just say "sure, why not, let's make the change today?"

    No.  They will put off making this change for as long as humanly possible.

    Same thing happened with bitcoin cash.  A perfectly reasonable code change, which would have had the side effect of lowering TX fees which go directly to the miners.  Did that get approved?

    Ha.  What do you think?  Of course it didn't get approved.

    Its a bug - and a feature - of the current design of bitcoin.  Bitcoin is very strongly feature-change-resistant for items that impact miner revenues.  If you like things to remain unchanged, then this is a feature.  If you think there are issues that need addressing, then its a bug.

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  • Sat, Oct 10, 2020 - 6:26am

    zshilor

    zshilor

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    Infrastructure Unavailability

    Bitcoin will have satellite communication, there are pilots in this direction. Also, any communication is fine, phones, radio. Bitcoin Core, which is the consensus rules, is independent of communication. It is unlikely that the Internet will break, but if so, Bitcoin will do better than internet dependent businesses including banks I believe.

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  • Sat, Oct 10, 2020 - 6:43am

    zshilor

    zshilor

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    Bitcoin Resistance

    Given that miners replace equipment every 3-4 years, thus the next gen can be designed to support future as well as the past, as needed. The fork will happen, and succeed for a real threat on Bitcoin, as happened on a minor scale with SEGWIT upgrade.

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  • Sat, Oct 10, 2020 - 6:57am

    kennan

    kennan

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    kennan said:

    Quantum computers have a unique quality that allows them to efficiently run algorithms that can easily crack conventional cryptography.   Is this a risk for cryptocurrencies?  Yes and No.  Yes, conventional cryptography, which is the backbone of common internet security (most internet traffic is encrypted) and is also the backbone of current cryptocurrencies, is absolutely completely vulnerable to quantum computers.
    But, no, this isn’t a deal-breaker for cryptocurrencies or for basic internet security. Experts are well aware of the issues and have been working on quantum-proof encryption for quite awhile now.   As quantum computers become more powerful and more common, standards will be developed for these new quantum-proof algorithms, and a new type of encryption will be adopted everywhere.
    Just try to remember that the internet itself cannot safely function without good encryption.   E-commerce, online banking, and anything that requires a login password will be completely compromised unless new cryptography becomes widespread.  Very smart people are working on this and they already have excellent solutions.

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  • Sat, Oct 10, 2020 - 7:36am

    #16
    KugsCheese

    KugsCheese

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    Voting

    Politicians are scared to death of blockchain voting because it would be very hard to game.  No more easy votes for cigs (van pickup).

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  • Sat, Oct 10, 2020 - 8:59am

    #17
    Mohammed Mast

    Mohammed Mast

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    Andreas Antonopolous and Dan Held

    https://www.youtube.com/watch?v=MiHfwUFV9HA

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  • Sat, Oct 10, 2020 - 9:00am

    #18
    Mohammed Mast

    Mohammed Mast

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    Andreas on Quantum computing

    https://www.youtube.com/watch?v=wlzJyp3Qm7s&t=97s

    Some people just love to see solutions and look for problems

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  • Sat, Oct 10, 2020 - 9:01am

    #19
    Mohammed Mast

    Mohammed Mast

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    Oh and another one

    https://www.youtube.com/watch?v=wlzJyp3Qm7s&t=97s

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  • Sat, Oct 10, 2020 - 9:02am

    #20
    Mohammed Mast

    Mohammed Mast

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    What the hell

    https://www.youtube.com/watch?v=d4xXJh677J0&t=29s

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  • Sat, Oct 10, 2020 - 9:03am

    davefairtex

    davefairtex

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    the fork will happen

    Oh, I believe the fork will happen.  Eventually.  Someday.  Hopefully prior to the breakthough.

    Until the fork occurs, there is always the risk of a secret breakthrough.  Both NSA and PLA are highly motivated to execute this project.  And to keep the progress secret.  Ideally, they want everyone to think they're 5-10 years away when their machine goes operational.

    And it will also take time to develop the new hardware to do the mining.

    I mean, sure, this fork might happen in advance.  And the mining hardware might be developed in advance.  And the miners might replace all their hardware in advance.

    And hopefully the various nation-state actors will tell everyone way beforehand that they're about to break internet cryptography.

    Assuming they haven't broken it already, of course.

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  • Sat, Oct 10, 2020 - 9:04am

    #22
    Mohammed Mast

    Mohammed Mast

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    On a roll

    Migration to quantum computing

    https://www.youtube.com/watch?v=dkXKpMku5QY

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  • Sat, Oct 10, 2020 - 9:14am

    #23
    davefairtex

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    ok so what's the schedule?

    Just boil down the schedule for us all.  When will the mining hardware arrive?  And when will the bits get updated?   Is there already a beta?  Which quantum-proof crypto algorithm have they selected?

    Or is this still vaporware?

    My life used to be doing projects just like this.

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  • Sat, Oct 10, 2020 - 9:55am

    #24
    Mohammed Mast

    Mohammed Mast

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    1

    Electricity

    I guess I should start with a cost/benefit question.

    Is all the cost of  electricity being used around the world on social media a benefit?

    Is even the fraction of the cost of electricity being used here on PP a benefit?

    BTC is 11 years old. In that time 18,000 millionaires (USD) have been created. Is that a benefit? BTC has spawned over 10,000 "copycats". Some have real world applications, most are shit coins.

    It would be well to remember that BTC is an 11 year old. It is not a teenager. let alone an adult. Is it perfect? No

    What problem/s does it solve ie. why is it necessary?

    To even ask that question HERE is beyond ridiculous.  One would assume (and probably be wrong) that everyone here is aware of the three E's. At minimum one reading here would be aware that Chris Martenson has spent the last 13 years online delineating the problems with our current monetary system, from the Fed, fractional reserve lending, banks and banksters, etc. 11 years ago a White Paper was published which offered a solution to all those problems.  https://bitcoin.org/bitcoin.pdf It offered a path to a trust less, democratic monetary system. A monetary system that issued currency democratically w/o a third party intermediary. It is a system based on mathematics. (I suggest watching the Andreas and Dan video posted above)

    The system it creates is Peer to Peer (P2P) This system is the ultimate monetary system which can guarantee freedom. Anyone engaged in a fiat regime is by definition not free. BTC is OUR money.

    So my next question is : What price are you willing to pay for freedom? What price are you willing to pay for establishing a Decentralized Financial system (DEFI)?

    What price are you willing to pay to cut the legs out from under the banksters?

    That price is the price of electricity. Some people died for those freedoms.

    This is a definition of critical thinking. "

    crit·i·cal think·ing
    noun
    1. the objective analysis and evaluation of an issue in order to form a judgment."
      This means one initially puts aside personal biases, prejudices, fears, and other emotions and preconceived ideas to make an OBJECTIVE judgement.
      As I stated BTC is not perfect but I think it is stupid to throw out the good in search of the perfect.
      This is Nic Carter for the umpteenth time explaining BTC energy use,
      If somebody can come up with a better solution to the problem, which clearly if you are here you should recognize, I am all for it. Let's hear it. BTW it aint gold

     

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  • Sat, Oct 10, 2020 - 10:31am

    #25
    vshelford

    vshelford

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    Joined: Jul 13 2014

    Posts: 166

    0

    fascinating discussion

    As an (obvious) non-techie, my questions about bitcoin (not so much block-chain) are more based in past experience, which I grant is no guarantor of future happenings (but it's a hint...)  Someone mentioned block-chain for voting - that sounds seriously interesting, if it really is tamper-proof.  Nothing in the past has ever been tamper-proof, eventually, but maybe this one is - hope so.

    But back to bitcoin and its derivatives and successors.  We're still talking about a currency here, I assume?  At the moment, I guess because it is tied up with the distributed ledger technology behind it, it seems to be being treated like an asset in the ""markets"".  This is probably one aspect of it that I'm finding ambivalent - it's a case of buying one currency with another currency, and in many cases having to buy it back with a more mainstream currency to be able to use it.  No doubt that will even out as more people use it for purchases. But its "price" is still very volatile. Like an asset (land, gold, etc). But it's just a record of a currency exchange, and that doesn't feel like an asset to me.

    MM placed it in the context of an ideal - what is the value of a truly P2P, no-trust, no tampering currency, and isn't it worth the cost of the electricity. But cost in what terms? Dollars? Possibly crashing resources? I feel like we're on a see-saw between concerns about teotwawki and technology riding to the rescue. Wouldn't I like to "cut the legs out from under TPTB"? Sure, but my primary attention is on more down-to-earth things like helping my community survive the implosion of the current systems so that life can go on. Maybe distributed ledger technology will be part of that "going on" - probably will be integrated into many things, if those sort of systems survive at all.

    Please don't take the various doubts and questions as criticisms, so much as the back and forth of discussion. We've got one foot each in two (apparently) quite different scenarios here.

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  • Sat, Oct 10, 2020 - 12:04pm

    #26

    thatchmo

    Status: Silver Member

    Joined: Dec 13 2008

    Posts: 334

    3

    Risk-Reward

    I purchased my first BTC back when it had "exploded" to around $1200.  Bought 1/4 BTC on localbitcoins just to become familiar with the system- the major exchanges weren't operating in HI at that time.  Not too long afterwards, I traded half my 1/4 BTC for Ethereum- it was gonna be the "big thing".  Typical of my investing success.....So, now I'm seriously looking at diversifying my "portfolio".  I'm considering allocating 5% to BTC, because I'm pretty much all in cash-equivalents presently- and that is a bit scary.  I could absorb a 5% total loss.  Everything has plausible risk.  Inflation, confiscation, taxes, theft (in all its forms).  This back-and-forth on BTC never seems to have a solution, besides "how much of your personal portfolio do you wish to risk on any given asset?".    Risk-Reward.  I'd also be interested in DaveF's project on mining those quantum-proof coins in the comfort of his own home.  What, couple grand in hardware hooked up to the solar panels?  Sounds like a fun project.  More info please, Dave.  Diversification, because some will go up, and others down.  Rabbits, chickens, garden.  Pray for rain.....Aloha, Steve.

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  • Sat, Oct 10, 2020 - 12:17pm

    #27
    davefairtex

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    2

    distributed ledgers

    From a technical (network-architect) perspective, bitcoin is a distributed database.  As such, it makes some assumptions about its operating environment:

    1) connectivity will "mostly" be maintained between all full nodes and the miners, with only temporary outages between segments.  (let's say less than 30 minutes for an outage between segments).  Less technically: you need a functioning internet - where  all the countries can talk to one another.

    2) the cryptography on which it is based is extremely difficult to subvert.

    3) no one group controls a majority of the mining power in the network.

    If any of these three assumptions are violated, we have a problem.  Note that these are reasonable assumptions to make.  It would take extraordinary effort to violate any of these assumptions.  Like what would they be?

    #1: war between US and China - internet fragments in the same way that air travel is no longer permitted between countries.  This has never happened.  But it certainly isn't impossible.  If it happens - this is a problem.

    #2: quantum computing cracks cryptography.  If there is a 1-year warning, this problem can be solved.  If there is little to no warning - this is a problem.

    #3: that's the 51% attack.  I haven't gone down that one.

    Let me just say also, I really do like the underlying technology.  Its nifty stuff.  Who wouldn't like a shared realtime distributed database where anyone can add records and anyone can make queries?  Its an interesting new tool for the network architect's toolbox.

    However the core issue remains - the "network" the whole thing depends on is also a key assumption.  No network = effectively, no coin.   Coins exist, but you can't move them around, nor can you validate transactions.   And things get very strange if the Internet gets fragmented.  You won't like how things go if that happens.  And you really wouldn't like how things go with the "quantum surprise" scenario either.

    You decide if that's an issue for you.

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  • Sat, Oct 10, 2020 - 12:49pm

    #28
    nedyne

    nedyne

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    Posts: 88

    0

    Why won't it bite the dust?

    If you're interested in Bitcoin, you owe it to yourself to read the paper Bitcoin will bite the dust, by K. Dowd and M. Hutchinson, published in the peer-reviewed Cato Journal. It offers a different perspective to this Saunders, a crypto-cheerleader.

    I read it a year ago, back when I was doing my research on Bitcoin. I tried to find a coherent rebuttal to the paper and could find none, so that was for me the last nail in the coffin for Bitcoin. I don't want to own an asset that is almost sure to eventually be worth zero or close to it, and have to fret about how much longer it has before mass psychology allows it to reach its intrinsic value.

    Being peer-reviewed, you won't find obviously misleading claims in the paper like Saunders makes in the podcast, for example when he says that you cannot create more Bitcoin (yes you can, either you launch the next shit coin or Bitcoin clone from the comfort of your sofa, or you go through the trouble of creating a better digital asset that doesn't suffer from Bitcoin's many ailments, which is almost guaranteed to happen eventually).

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  • Sat, Oct 10, 2020 - 12:57pm

    Redneck Engineer

    Redneck Engineer

    Status: Bronze Member

    Joined: Mar 16 2020

    Posts: 174

    4

    Splinternet

    I think the days of a global, free, open internet are already over. The hope in the early days was the free sharing of information and ideas would lead to a tearing down of borders and translate into global freedom. That's happened to a certain extent.

    But the desire for rulers, regulators, and politicians to maintain control, combined with their control of guns and the need for the internet to have physical access points means the eventual splintering of the internet.

    Look at the differences today between the internet in the US, Australia, EU, and China. Each has separate rules for its citizens and what they may access online, and the degree of identity tracking involved. Each has separate rules for how their media is censored. The rules are largely being extended to online and social media. Look at Facebook or YouTube.

    So not only is it possible the internet splinters, in some ways it has already happened, and will only get worse from here on out.

    In the bigger picture, COVID-19 marks the peak of offshoring from US (and other countries) into China. The nationalism-globalism pendulum has turned the other way. Brexit and the Trump victory in 2016 were the earlier signs, but the COVID supply chain crisis made it crystal clear and had massive shockwaves. In 50 years, I bet that will be seen as the turning point.

    The global economic disengagement will weaken support for a global internet, along with other factors. So countries will create or enhance electronic borders.

    I don't know in detail what shape the internet will take, so I can't say how it will impact distributed ledgers. But I'd very certainly say the splinternet is not just a remote possibility, it is a highly likely outcome.

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  • Sat, Oct 10, 2020 - 1:11pm

    #30

    Jim H

    Status: Bronze Member

    Joined: Jun 08 2009

    Posts: 1552

    5

    Warning for upcoming crypto-cracking

    DaveF said,

    #2: quantum computing cracks cryptography. If there is a 1-year warning, this problem can be solved. If there is little to no warning - this is a problem.

    As has been well described elsewhere in this thread, and as I have described otherwise recently, we are not at all near having completely scaled, error-corrected quantum computing that can complete this task.  To better describe the picture of where we are, we can think of maybe three distinct phases of QC evolution.. and we just passed into phase 1, successful proof of concept using a toy quantum computer, late last year.

    Phase 1:  Quantum supremacy:  You are here.  Google last year ran experiments confirming that QC is real, by performing calculations using a 54 qubit machine that did math in minutes which would otherwise have taken weeks or years on the most powerful (classical) supercomputers.  Today's machines are termed, "NISQ" for noisy, intermediate scale quantum computing.

    Phase 2:  First useful work applications are addressable.  Among the first applications addressable will be chemical/pharma/materials discovery, based on first principles, i.e. modelling molecular structure vs function.  I am keenly interested in the timing of this next threshold, and we are still likely 3-5 years away, at earliest.  While the math behind factoring huge numbers will require what we might call, in my model, phase 3 exactitude, modelling molecules does not since this will be addressed as an optimization problem, most likely with a hybrid approach between a late stage, partially-scaled (much more than 50 qubits) machine, alongside a conventional super computer.  There are already algorithms under development called variational quantum eigensolvers, or VQE, that employ this hybrid computing approach to optimization.

    Phase 3:  Fully scaled, fully error corrected QC that can do exact math.  This is where cryptography as we know it gets broken.  Because this could take literally millions of qubits, with the majority of them functioning in support of error correction, we are a long way away from this.  Most scientists involved in QC will swag that it's at least a decade away.

    So, I guess my point is.. we will see it coming.  Chemical and Pharma companies that have invested early in QC will start patenting their new drugs, catalysts, and materials, and you will hear about this in the news.  It won't be a secret.  Once we get to phase 2.. it will be time to take a critical look at the competition and timing of phase 3.. but for now, we are not even close.

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  • Sat, Oct 10, 2020 - 1:35pm

    #31
    davefairtex

    davefairtex

    Status: Member

    Joined: Sep 03 2008

    Posts: 2707

    2

    NSA/PLA

    JimH-

    I'm just guessing that the PLA and the NSA see this project as one of those core-mission-critical projects that they will a) not talk about and b) fund excessively.  The rewards for an early and surprising success are really phenomenal.  They will own the internet, if they win.

    Given this behind-the-scenes very well funded top secret research effort - are you really sure that the quantum success will be telegraphed to all and sundry?

    Put differently - if I had 10 billion dollars per year to spend 0n my top secret project focused exclusively on crypto - do you think I might be able to advance the state of the art a bit more rapidly?

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  • Sat, Oct 10, 2020 - 1:38pm

    #32

    thatchmo

    Status: Silver Member

    Joined: Dec 13 2008

    Posts: 334

    2

    thatchmo said:

    So, when all is said, whether it's equities, PM, or BTC, it's time to que up Kenny Rogers.

    Aloha, Steve.

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  • Sat, Oct 10, 2020 - 1:45pm

    #33
    Redneck Engineer

    Redneck Engineer

    Status: Bronze Member

    Joined: Mar 16 2020

    Posts: 174

    5

    Crypto & "Complexity Worship"

    I am not an expert in crypto. I have done some reading on the topic.

    One thing that strikes me is: what problem is it trying to solve that isn't solved already? Sound money, in gold and silver, is already available and has a 5,000 year track record. So is there a need to reinvent the wheel?

    That led to another question: why are people attracted to it? There are likely many reasons, psychologically and economically. One I haven't seen discussed is complexity worship.

    By "complexity worship" I mean the granting of something complex the undue benefit of the doubt by virtue of it being complex. The converse of this would be dismissing something as too simple. While not definitive, one sign (and just a sign) of it is frequently dismissing something as "oversimplified" in favor of something more "nuanced." Often it involves lots of understanding in details while missing the big picture, or failing to properly assess the risk of certain underlying assumptions.

    Example: the US tax code. No income tax, or a 10% flat rate income tax, is usually dismissed as being too simple. Steve Forbes ran in the 1990s for the Republican nomination and talked about a tax form that could fit on a postcard; that was dismissed as being too simple.

    The complex labyrinth of tax code we have to day is often criticized, but in details: raise this rate a few percent, remove this deduction, etc. Rarely do we step to the level of seeing the bigger picture and discussing in principle what a more efficient tax system would look like.

    There's something in the nature of the tax code being complex that conveys an emotional halo around it.

    Same thing with the Fed. With hundreds of PhDs running it, putting out indecipherable academic papers, many people conclude that these are really smart people who must know what they're doing. And that last presumption is a real folly.

    A complex system (in the mathematical sense of nonlinear dynamics) is by nature very hard if not impossible to analyze. In physics, it's the difference between a two-body system and a three-body system.

    With gold and silver, the prediction of monetary value over time is as simple as it gets. Crypto and fiat currency introduce so many variables and assumptions that the likelihood of them working as intended goes down considerably.

    A complex monetary system, by its nature opaque, invites manipulation. Some people are not concerned about that with crypto, but for those who are, it would take an awful lot to convince us that something so complex doesn't have a backdoor or a flaw that could be exploited down the road. In the case of central bank digital currencies (CBDCs), I'll be very surprised if they are not set up from day one with government access, even if they promised otherwise. (So far, I think they've been pretty open about having access to these accounts, at least in the US and China; I haven't looked elsewhere.)

    Simple means predictable. It means reduced risk over the long term because we can see where things will go. With complex systems (monetary or otherwise) prediction becomes guessing and gambling. I prefer simplicity, when and where its possible.

    Certainly, there are complex things in life, and imposing too simplified theories on them fails. We saw that in physics with the shift from classical to quantum around 1900: lots of phenomena couldn't be explained with the existing theories, so more complex theories were created which could explain it. The key is something like Occam's razor: keep the theory as simple as possible to explain the data.

    I think there's a similar rule in economics: keep it simple. Keep the monetary system as simple as possible. Or: don't make the system more complicated than it needs to be.

    That gives us predictability and risk reduction.

    It also gives us something talked about often around here: resilience.

    The human mind prefers linear systems. A complex, nonlinear system tends toward oscillation and instability. We see it in boom-bust credit cycles and fiat currency defaults. People place big bets on their predictions, but these often blow up. If it were easier to predict the future because the system were simpler, it would be easier to assess risk and properly hedge. That makes the system more resilient.

    So I don't know the future of crypto or bitcoin, but I do know that they will not be, over the long run, more resilient than gold and silver. That opinion is based just on comparing complex and simple monetary systems.

    Politically, the die is cast, and the world is heading for CBDCs as the next stage. Regardless of the ethics of it or the likelihood of it working as a stable store of value, that is what the powers that be are already working on. This is not hidden; the papers are out there for anyone to read.

    So for better or worse, cryptocurrencies are in the future. I see gold and silver outside the financial system as a hedge against the risks involved, in the transition from the current system to this new one, and in the new system once it is up and running. And I'm speaking here about all manner of risks, from instability/volatility, periodic system failures, institutional failures, political manipulation, implementation of social credit scores to regulate these digital accounts, and so on.

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  • Sat, Oct 10, 2020 - 3:09pm

    Barbara

    Barbara

    Status: Bronze Member

    Joined: Dec 15 2009

    Posts: 207

    3

    Not miners' energy or satellite, my access to the infrastructure of modern life

    So I have bitcoin sitting on the infrastructure of a miner who is entirely secure and has back-up renewable power.  I guess I don't understand how that helps me use my bitcoin to buy groceries if local currencies collapse.  Can you explain more?
    I can use physical gold and silver as long as I hold some myself in small denominations (or as was done for millenia, I can chop them into useful pieces).
    So am I incorrect in thinking that in order to use my bitcoin in a collapse situation, both I and the person I need to pay must have access to a working, charged device that can connect to their satellite network without going through local ISPs or Cell towers that are down?
    The reason I ask this is because in hurricanes we've found the infrastructure goes down and you don't have electricity or cell towers and AT&T, at least, has lost power to switching stations that don't have back-up generators.  There goes my fiber optic internet connection along with my land-line phone.  No electricity, no cell towers no working cable for internet connections.

    Do I need a dedicated satellite device just to serve as a wallet?  Could I transfer bitcoin to a seller using my device if they didn't have one?

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  • Sat, Oct 10, 2020 - 8:52pm

    #35
    Mohammed Mast

    Mohammed Mast

    Status: Platinum Member

    Joined: May 17 2017

    Posts: 1460

    1

    The absolute silliness continues

    My last post here as I have no time for silliness.

    If the internet goes down you will have bigger problems than BTC. Think Mad Max. Nothing will work.

    When was the last time somebody bought bread and milk and eggs with gold or silver? I guess there might be a few silver coins still floating around, that said they are not $27 per oz. they are .25.

    I am sure at the top of the list for everyone developing a QC is breaking crypto currency. Of course that delusion is supported by the mega doses of LSD I took in the 60's

    My guess is you might be more worried about big brother with a camera up your rectum in the morning. Maybe elections will cease to have any relevance at all. Weapons systems just might be vulnerable etc. etc. etc. In other words there are much bigger fish to fry. Again think Mad Max.

    Oh btw where are you going to spend all that gold and silver? Walmart?

    So somebody doesn't want to hold an asset that can go to zero. Really. over 3,000 fiat currencies no longer exist. Most do not last longer than 300 years. Got dollars? Got dollar denominated assets? The canard is well there is no intrinsic value. Jim H and I both answered that if one were to care to look in the forums. The other canard is well it is priced in USD. That one always gives me fits of laughter such that I need to find the nearest toilet. What is gold and silver denominated in? Let  me help you fiat .  What is gold worth today? How much of your portfolio is allocated in gold and silver? Well if your portfolio is worth $500 k 10% would be $ 50k again priced in USD.

    Bottom line there are always going to be people who are afraid of the future. This site is loaded with them. There will always be people more comfortable being a serf. It is safe and reliable. There will always be people who lack vision.

    Every scenario proffered here negatively about Cryptocurrency will result in something far worse than Mad Max. So you think your garden is going to save you? Think again. You think your gold is going to save you? Think again You think your guns are going to save you? think again. All of that is nothing more than coping mechanisms for a "slight " disruption. War with China? LOL.  I have used crypto to purchase goods and services. Numerous businesses accept crypto. I get it it took years before people gave up their horse and buggy.

    Everyone here moans and groans about our current system and something comes along that has the chance to make a difference and through absolute fear and ignorance it get dissed. Amazing

    Once again time to go on vacation wish you all well when doomsday arrives. It won't be what you think

     

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  • Sun, Oct 11, 2020 - 3:10am

    #36
    davefairtex

    davefairtex

    Status: Member

    Joined: Sep 03 2008

    Posts: 2707

    2

    segmented vs down

    So a "segmented internet" is not the same thing as "the internet is down."  It is just a theoretical problem, right up until we posit a medium-hot war with China.  At that point PLA hackers descend on America.  Only defense is to cut them off completely from access.  This results in a segmented internet.  Not "internet is down" - just, you can't send packets outside the United States.  You can still email your friends, order things from Amazon, etc.  But no packets to Europe.  No packets to Asia.  Just within the US.  It will be a chaotic time for sure.

    How does bitcoin operate in this scenario?  Answer is: poorly.  You won't like what happens when the segments are rejoined.  Or if they move in and out of connectivity - one day connected, the next day disconnected, etc.  Things will be very chaotic in bitcoin world if the networks are in this state.  An underlying assumption of the bitcoin architecture is complete connectivity with only transient (less than 30-minute) issues.  Violate that - often enough - and bitcoin becomes unusable.  That's because on a "segment rejoin", all the transactions that happened on the "smaller segment" are wiped out, while the "larger segment"s transactions are retained.

    In this situation, the bitcoin code will still work just fine - it will be internally consistent and operate according to its rules, etc - but it will appear wholly unreliable to anyone who executed a TX in the smaller segment, since following the rejoin, those allegedly "confirmed" TX will all vanish.

    If you understand databases, transactions, networking, and bitcoin's rules, this is - perhaps not basic, but not all that hard.  But bitcoin is a complex system.  Lots of moving parts.  "Normal people" might not understand the implications of how bitcoin handles its boundary cases.

    Bottom line: if the network becomes segmented, don't accept bitcoin for any real goods or services.  A "confirmation" means nothing in a segmented internet.  It only has meaning when everyone is completely connected.

    If you imagine a satellite will fix this - during a hot war with China - any satellite which facilitates packets from China will be - taken out of the sky.    [Hint: any satellite which provides a path for bitcoin traffic will also provide a path for chinese hacker traffic too]

    As for quantum - NSA will come up with a special-purpose quantum machine to hack crypto systems using their 50 billion a year budget.  Once they do, bitcoin is vulnerable.  So is banking.  So is https.  This is the NSA's holy grail.  It is my assessment that they are bending every effort to make this happen, simply because this is their mission.

    They won't announce it when it happens, either.

    Is it 10 years?  5 years?  Do they have one already?  I don't know.

    But if the bitcoin software gang are going to stake out the territory of "being immune to government manipulation", then given what I stated above, the team really should make quantum proof bitcoin happen as soon as possible.  They really can't play around with this.  It will take a year, maybe more, to get both software and hardware in place.

    Oh - full disclosure - I'm definitely talking my book with quantum.  But that's also why I own that quantum coin.  I really do believe what I'm saying about NSA and quantum.  And of course, the quantum coin won't do any better than normal bitcoin in a segmented internet world.

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  • Sun, Oct 11, 2020 - 3:57am

    #37
    davefairtex

    davefairtex

    Status: Member

    Joined: Sep 03 2008

    Posts: 2707

    1

    collapse scenario and bitcoin

    You need network connectivity to some set of full nodes, which in turn must have (through however many hops) connectivity to the "largest" mining pool and segment in order to safely validate a transaction for bitcoin.    Validation takes roughly 10 minutes in a situation with relatively complete connectivity, but more likely, 30 minutes to be safe.

    [I ran a full node for a while.  It wasn't hard.  I wanted to rummage through the bitcoin transaction database to extract technical information.  That all worked right up until Wall Street started to play.  I digress.]

    So as an end user using bitcoin to make a transaction (sending a coin, or validating receipt of a coin sent by another to you), you need power, connectivity, and more importantly, the rest of the global network needs relatively complete connectivity (and of course power) to be confident that your transaction actually ends up making it into the permanent record.  You could certainly use a satellite as your ISP.

    Proper validation is what starts to become problematic if/when the network starts to fracture into segments.  Sending coins = fine.  Its validating receipt that becomes more risky.

    But this is only true in these edge case scenarios.  With normal connectivity as is the case today, none of this applies.

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  • Sun, Oct 11, 2020 - 4:36am

    #38
    davefairtex

    davefairtex

    Status: Member

    Joined: Sep 03 2008

    Posts: 2707

    3

    war with china

    Last point.  I didn't ever think nations would stop allowing people to travel.  And after just 3 short months, it is now the normal state of affairs.  Try going to Canada.  You can't.

    Imagining that the global internet will remain fully connected at all times regardless of international situations - seems similarly optimistic.

    We've seen quarantines to stop Chinese travelers.  Why not quarantines to stop Chinese packets?

    There are plenty of war scenarios that don't involve tossing nukes back and forth.  China killed a bunch of Indian troops a few months back.  Think things might escalate there?   Xi is definitely going back to Mao, with Wolf Warrior added in for good measure.  Decoupling is a guaranteed outcome.  We're stopping export of high tech parts.  We're sanctioning CCP members. We're kicking out students associated with PLA.  We're closing consulates where they do their industrial espionage.

    Where will things be six months from now?  Who can say.

     

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  • Sun, Oct 11, 2020 - 5:28am

    #39
    VTGothic

    VTGothic

    Status: Gold Member

    Joined: Jan 05 2020

    Posts: 736

    3

    Deep Dive, Anyone?

    Adam, thank you for bringing on someone who could address cryptocurrencies and Bitcoin. We BTC advocates appreciate it.

    There's no question but that Bitcoin (and other digital currencies) will remain controversial, here and in the larger world. That's to be expected – there's always an adoption curve involved with new ideas and new tech. In this case, the whole idea is so simultaneously disruptive and threatening that resistance and rejection are inevitable. It seems to me, though, that a great deal of the resistance and rejection reflected in this comment thread are not based in an understanding of the technology, but in imagining what the technology is, which in turn reflects the pop culture narrative about BTC. It's that characteristic of many objections that indicates they are emotional and psychological in nature, taught by msm “experts.”

    The balance of objections appear more or less dated, which indicates the purveyors did some deeper investigation at some past date, formed some conclusions based on some facts on the ground at that time, and made a determination that they still cling to, even though advances in tech and objective circumstance have fully or partially obviated the stated reasons for their concerns.
    Again, I think this is all to be expected; it's certainly common to human beings; none of us like change very much, especially highly disruptive change of the kind digital currencies are now imposing – innovations that demand we completely change our understanding of money itself. Such a fundamental disruption, especially while only hazily understood, creates feelings of threat and danger that in turn call forth repulsion.

    There's also the simple fact that we cannot see what we are not prepared to see. We humans need categories within which to place our observations; our categories are shaped by our previous experiences. For some segment of us, as a people, this emergent digital world is too different from our formative experiences for us to integrate. I think it's particularly the case for those of us in the Boomer age group that the whole concept of digitizing everything seems too alien; it's considerably easier for Millennials and those younger to grasp the power and probability of such a world – they have lived some portion of their formative years in virtual worlds, even bought and sold digital artifacts in digital currency, as well as in real-world currency.

    I think many of us have been able to adapt to online shopping (after a learning curve, and even then not all of us) because it results in materially tangible products landing on our doorstep. That allows for a comprehensible link between virtual and real. But we gloss over the facts that we paid for the product with virtual money – a digitized version of our real bank balance; which, itself, is just ciphers on a non-distributed ledger which is every bit as subject to disappearing under certain scenarios here voiced as concerns about cryptocurrencies. (More so, really, when the underlying cryptography is examined.) The idea of non-tangible products holding real value remains, for many of us, a bridge too far. Why, we have to wonder, would someone pay real money for a power talisman in an online game?

    In one of his presentations on the basics and promise of Bitcoin, Andreas Antonopolous noted that the first horseless carriages used reins for steering. Why? Because our existing categories of perception influence our early development of revolutionary technology. The first horseless carriage manufacturers could only think in terms of replacing the horse with an engine; it took about 30 years to come up with the steering wheel; that is, to understand that the change from horse to engine allowed for the complete reimagining of what a carriage might look like. And that reimagination, once begun, was also subject to gradual evolution.

    The lesson I take away: Grasping what a new technology permits is an emergent phenomenon that builds on previous realizations. Bitcoin is only 12 years old – too early to imagine the steering wheel, much less to design one that works. But, monetarily speaking, we are no longer in the horse and buggy age. It is very likely that we Americans will see a fully digitalized version of the dollar introduced within 2 years – perhaps, as some have it, as early as Q1 next year.

    We rightly fear what that might mean, having seen China's social credit score system and being acutely aware of Facebook's willingness to cooperate with China on its program – even introduce elements of it here, to the detriment of free expression of ideas on its platform. Google, too, we know, is willing to not just censure information available to the massive Chinese market, but now skews search results all across the globe in order to privilege social and political views it approves over those it dislikes – all while spying on our search habits, and even studying how we scan web pages in order to better understand how to influence our content consumption, thus our perceptions of reality.

    This malignant trend in digital tech is not unanticipated. Many of us have seen it coming for a long time. Among those of us who saw it coming were the cypherpunks who experimented and collaborated to bring out BTC as a counter-punch to the effort to totally manage our lives and livelihoods. Blockchain, created to allow BTC to work as an open, public, borderless, neutral, censorship-resistant alternative to increasing totalitarian State power, offers us the possibility to engage in P2P economics and interaction apart from the “permission” of some authority.

    Whether it can succeed or not depends on a number of variables whose outcomes really cannot be seen, even if we believe that the predominant power rests in the hands of those who desire to be managers of the people. There are, however, two variable that I think are important:

    (1) A right understanding of the technology and, especially, its highly disruptive potential – because it is in the realization and adoption of its disruptive potential that we all advance the counter-totalitarian revolt. And do so intelligently, not emotively. Emotional reaction is doomed from the outset. Informed, dispersed action is insidiously effective against colonialists of all types.

    (2) Distinguishing between right use of blockchain technology and wrong use. That is to say, rightly distinguishing between what is a truly distributed, immutable blockchain and what is just a ledger with a trendy name. So far, the only true blockchain application is Bitcoin. Only in the case of Bitcoin is the blockchain itself open, public, borderless, neutral, and censorship-resistant. That's because in every other instance what is termed a blockchain is in fact the property of some group: a company, institution, or government. That means that their so-called blockchain is not censorship-resistant, because they can censor it, either on their own behalf or on behalf of those who have oversight of them. So those wrongly-termed blockchains are not open (transparent), nor public, nor borderless, and certainly not neutral.

    If you want to tilt at the windmill of totalitarianism, BTC is an essential tool and battleground. This is not something self-evident to Americans – yet – but no Venezuelan, Ukranian, Zimbabwean, Chinese, or Brazilian needs to be convinced. They have demonstrated to their own satisfaction that BTC provides a key opportunity to thwart government misbehavior and repression. We could do well to learn from them before we have to learn from our own bad experiences.

    But even short of the worst case scenario, most of us PPers know that fiat currencies are not money. We know that a bail-in of banks is only a matter of time. And we know what Microstrategy's CEO, Michael Saylor, knows – what motivated him to take a serious deep dive into BTC (after having superficially dismissed it in 2017), and then to move the vast bulk of his company's half billion dollars of free cash into the “digital gold”: that any value held in cash and cash equivalents is (as he put it) just an ice cube melting away at the rate of 2% per year. His deep dive also taught him that BTC is a harder hard money than gold, silver, or any other precious metal.
    What's needed here is imagination. I don't mean flights of fancy, I mean the ability to create mental images in new categories of thought. Educated thought. None of us BTC enthusiasts on this thread can make the difference for you, because your particular questions and concerns are tied to your existing perceptual categories and innate assumptions about how the world 'really' works. We can only offer testimonies from our own deep dives, which were (and are) anchored in our particular perceptual categories and assumptions. Even modified by what we've learned through our own self-education, we are only, in the end, speaking to ourselves. When something one of us says happens to have sufficient congruence with your self-dialog we can have some influence in how you think about the issue. But the real revelation for you can only come from your engagement with the wide range of material now available to you.

    The crypto community is so diverse it's inevitable that some subset of enthusiasts will speak to you in a way that enables you to grasp what all the hullabaloo is really about. Once you grasp that, you'll still need to make a decision for yourself – but at least it will be an informed decision based in current knowledge about the project.

    My appeal is that you take that deep dive. Places to start, if you need suggestions, are: the Intro to Bitcoin and Intro to Blockchain videos of Andreaus Antonopolous; the Bitcoin-related interviews from macro-economist Raoul Pal's Real Vision Finance site; and the crypto-related interviews by podcaster Anthony Pompliano. You can also get a lot of education and perspective from financial analyst Lyn Alden, and podcaster Stephan Livera.

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  • Sun, Oct 11, 2020 - 6:58am

    #40
    JimboJim

    JimboJim

    Status: Bronze Member

    Joined: Nov 14 2017

    Posts: 83

    3

    OK, I get it, but.....

    First time poster here, though I've been a PP member for a while.  Having worked as an electronics engineer for IBM, I embrace the basics behind Bitcoin and understand the issues associated with internet function that DaveFairtex brought up.  A year ago, I put a sizable many thousands of USD into BTC, ETH, and some of the more attractive smaller tokens (LNK, NMR, RCN, etc) so I have skin in the game.

    So my question is, let's say that the Fed comes up with their FedCoin and then declares that all transactions conducted within the US on exchanges such as Coinbase, Gemini, Bittrex, etc are now limited to the only "approved" coins, namely FedCoin and a USD Tether token.

    What options would I have in this scenario, assuming I can't travel outside the US, in using my other crypto if this edict were put into place?  Would I have to swap my other cryptos for FedCoin if I want to salvage what I have?  Help me out here, please.

    Thanks!

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  • Sun, Oct 11, 2020 - 11:01am

    VTGothic

    VTGothic

    Status: Gold Member

    Joined: Jan 05 2020

    Posts: 736

    2

    No crystal ball; only probabilities

    @JimboJim The truth is that we don't know what happens in the scenario you painted. If the government follows historical precedent they'll give us a grace period to get out of unapproved digital currencies.  But if they want to punish those who had the temerity to get into crypto in the first place, they'd lock it right down and tell us to go cry blood.

    If the only legal option is a limited set of coins, you have a choice to make about whether to be an outlaw. It's very likely black market exchanges would emerge, just as has happened in China. The risks and costs would be reflected in the premium.

    Let me point out, though, that similar scenarios can be outlined for cash, too. Or for precious metals. Basically, you are pointing out the reason to distrust government. We all live under that thumb, hoping it won't press down on us in a way that hurts us according to how we've allocated our excess wealth. (One more argument for owning arable land outright.)

    The only questions we can ask are questions around probabilities. I've heard gold bugs say the government will never again outlaw gold because they did that and in the end rescinded it. Personally, I don't see how that provides any inoculation against a repeat of that particular virus. At least, not in absolute terms. I do agree that the probability is low, but that's because we are not on a gold standard, haven't been for a long time, and the Fed doesn't see gold as a threat to dollar hegemony.

    Some of those same people have said in the next breath that cryptocurrencies are subject to declarations of illegality because they'd compete with a new government-sanctioned digital dollar right at the time the government is trying to get its new digidollar up, running, and widely adopted. Could happen; who am I to say otherwise? Autocrats do autocratic things. But I note Venezuela could not make its national digidollar stick.

    I do think that the window for making cryptocurrencies illegal has been ratcheting closed steadily over the last few years. The fact that Wyoming passed a comprehensive legal structure to incorporate crypto as money into its law, and to authorize a new banking charter for crypto custody in special depository banks, and that other states are looking at the Wyoming law as a prototype, and that the Federal government has also started looking at that law for guidance, and that the first bank under the new law regime has just been chartered with at least one more to be soon approved (both banks will be able to operate nationally) - all of means that the diverse cryptosphere is becoming integrated into the US domestic monetary regime.

    It also matters that two large companies (Microstrategy and Square) have made big public news with their purchases of Bitcoin. In addition, we know that several hedge funds have taken large BTC positions, and we know pension and retirement funds are salivating over the prospect of earning some serious percentages for their client retirement accounts to make up for the lackluster real performance of equity funds and bond portfolios. The more we see significant corporations and (sometimes desperate) financial firms add crypto to their portfolios, the less tolerance Big Money will have for Washington DC trying to shut down the cryptosphere - and because they pay the re-election bills they get heard.

    These trajectories run against the notion that the US government will try to shut down competitive money. More likely, they'll just try to manage it. But they'll be restricted in that regard by the appetite of the big money institutions who will insist on the ability to earn and keep some necessary percent of gains.

    Is all of that, or any of it, a guarantee? Certainly not. Autocrats autocrat. But every day the government doesn't drop the hammer on cryptos means the odds they will - or will successfully - recedes.

    The other issue is enforcement. Even China has had trouble enforcing her bans. In fact, it's schemes like coin banning and social credit-affected finance opportunities that encourage and stimulate grey and black Chinese markets for, esp, BTC. Similarly, it's as Venezuela and Brazil faced massive devaluation of their native currencies that locals turned to crypto exchanges, sometimes illegal exchanges, to preserve their savings. In such places and times the exchange rate might soar, but it's always a better deal than watching one's savings melt away under the heat of 50% inflation.

    So, for me: I judge the odds of an outright ban to be slim and moving further away. I think the likelihood of taxation on gain at the point of sale (whether to buy another coin, or to move into fiat) is very likely. I expect crypto to be taxed like a commodity. I also expect gains on the investment of cryptos to be taxed like any cash investment gains.

    You have to make your own assessment of the probabilities of such an event and the options you'd be willing to consider if it should happen. Ditto regarding your precious metals holdings. 'Cause, who knows?

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  • Sun, Oct 11, 2020 - 11:16am

    Jim H

    Status: Bronze Member

    Joined: Jun 08 2009

    Posts: 1552

    3

    Reply regarding Gov't skunkworks QC

    DaveF said,

    Put differently - if I had 10 billion dollars per year to spend 0n my top secret project focused exclusively on crypto - do you think I might be able to advance the state of the art a bit more rapidly?

    They will try, but there is so much venture capital and non-secret governmental investment going on that my outlook is that we should ask the question again once we see the dawn of useful semi-scaled NISQ machines.  One of the interesting dynamics  now is the realization that the early QC innovators;  IBM, Google, and Rigetti placed all their bets on the wrong (qubit) horse in pushing ahead with cryogenic qubits.  This technology has been a good proving ground for quantum computing, but it appears to not be readily scalable - so there is a discontinuity now while alternative qubit technologies with better fundamental properties emerge.  This excellent three minute video from UNSW pokes fun at cryogenic machines while talking about their Silicon qubit program;





    Alternative qubit technologies are coming to the fore - Honeywell just showed that with only six ion trap qubits, they can run programs of equivalent depth to IBM's 27 (cryogenic) qubit system, and this is a testament to the improved coherence and lessened thermal noise sensitivity of the ion trap system;

    https://www.newscientist.com/article/2246940-honeywell-claims-it-has-built-the-most-powerful-quantum-computer-ever/

    https://newsroom.ibm.com/2020-08-20-IBM-Delivers-Its-Highest-Quantum-Volume-to-Date-Expanding-the-Computational-Power-of-its-IBM-Cloud-Accessible-Quantum-Computers

    Again, these are toy computers compared to what we will need to do real phase 2 work.  The point is we are seeing fundamental innovation at the qubit level now, and I think it will be obvious that we are off to the races soon.  My personal opinion is that Ion Trap machines will likely be the first to offer useful levels of scale and performance, i.e. getting us to phase 2... but they may not get us to phase 3.  Universal Quantum computing, a UK-based startup, has an outline of what a scaled ion trap system would look like;

    5 Promising Quantum Computing companies from the UK to watch

    https://universalquantum.com/

    Another space to watch is research relating to what are termed, "Majorana" qubits.  Microsoft has placed their bets here, but we still don't have even a single working qubit demonstrated publicly.. but the theoretical attraction is great since it theoretically would have very long coherence times;

    https://physicstoday.scitation.org/doi/10.1063/PT.3.4499

    Again, the gap between what we have seen published in terms of qubit research and toy computer performance, and what a government would need to break cryptography, is too immense a chasm now IMO.  The large amounts of corporate venture capital flying around into QC startups helps to keep the status of progress at least a little bit more transparent.  The next decade will be very interesting for those watching quantum computing.

     

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  • Sun, Oct 11, 2020 - 1:35pm

    JimboJim

    JimboJim

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    Good points

    VTGothic - Your analog with the same potential existing towards precious metals as with cryptos is an apt comparison. Your examples help me assess what kinds of risks to weigh in order to make informed decisions.

    Thanks!

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  • Sun, Oct 11, 2020 - 1:50pm

    #44
    davefairtex

    davefairtex

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    dollar amounts

    Jim-

    Thanks for the detail - it sure does sound like there's a fair amount of money floating around the space.

    Do you have a sense as to how much?

    And this may be a bit of a longer-odds thing - but if you had some partially-functioning hardware from ... say ... a spacecraft and you were able to closely examine it for ... say ... 70 years, might that speed the research process?  And/or eliminate some of the dry holes?

    Every now and then I'll see something on MSM where they talk about UFO disclosures; the latest snippet involved examination of some metal fragments that have a very unusual atomic structure to them.

    https://www.thewrap.com/tucker-carlson-its-outrageous-the-government-is-still-hiding-evidence-of-ufos-video/

    USG has allegedly had these bits and pieces since 1947.  Maybe it has been helpful in speeding the pace of US tech development.

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  • Sun, Oct 11, 2020 - 2:02pm

    #45
    RHuk

    RHuk

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    5G, A,I QUANTUM, BlockChain, BitCoin, CB Digital Currencies, plus SPACEX/STARLINK

    Many people have 'closed minds' and seem to be asleep?

    My mind was awakened after viewing the following plus other videos:

    IBM SUMMIT Computer Size of football field

    GOOGLE QUANTUM Computer size of refrigerator.

    Digital Asset Invester @ 11.25.and 12.47 time stamps





    2.40 & 43.26 Timestamps

    glenn beck ep 60 jeff brown google quatum computer

    Executive Order 13772.  Donald Trump Photo

    https://entertainmentheat.com/donald-trump-and-executive-order-13772-ripple-ledger-x-and-faster-payments-taskforce/

    STARLINK - No of satellites being manufactured = 120 /month.

    STARLINK launches = 12 so far.  Average 60 per Falcon 9 Launch.  775 so far.

    12,000 to 40,000 planned?

    Some satellites being de-orbitted from LEO Low Earth Orbit.  Design change sunshade etc.

    4,000 Linux computers
    Google Search:   SpaceX relies on the Linux operating system in its satellites as well as its rockets. “Each launch of 60 satellites contains more than 4,000 Linux computers,” Monson said. “The constellation has more than 30,000 Linux nodes (and more than 6,000 microcontrollers) in space right now.

    Ripple SWELL.  14 Oct 2020 Sheilla Waren (World Economic Forum) Keynote Speaker

    Ripple XRP = BANKING BRIDGE between old SWIFT and new Central Bank Digital Currencies.

    XRP only Crypro Digital currency that is ISO 20022 Compliant.  BITCOIN ??

    WEF/IMF - THE GREAT RESET - 4th Industrial Revolution?!

    What is going to link 1.7Billion Unbanked & 2.0B UnderBanked People?









    DAVOS and WEF  Jan 2021 delayed until May 2021?

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  • Sun, Oct 11, 2020 - 2:07pm

    Jim H

    Status: Bronze Member

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    Venture Capital going into QC...

    As a matter of fact I do have that Dave!  I gathered some data manually late last year because I wanted to see what the year-over-year growth was relative to the previous years... here is the chart I put together as a result, building on a 2018 chronology of same;

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  • Sun, Oct 11, 2020 - 6:28pm

    #47
    dreinmund

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    Many interesting points in this thread

    I appreciate all the comments and explanations, even those that were delivered with religious fervor :-). Special thanks to davefairtex for identifying potential risks.

    I'm trying to sort through the risk / reward of Bitcoin as compared to other hard assets (PMs, farm land, rental properties). The more I learn about Bitcoin and the underlying technical design decisions and limitations, the more I feel that Bitcoin is indeed closer to digital gold than I wanted to admit, but for a DIFFERENT reason than I initial thought.

    Bitcoin's implementation of a blockchain, relying on proof-of-work, was revolutionary 10 years ago, but is already very dated. There are multiple problems with it, which can be either seen as a feature or a bug.

    E.g. it takes 10+ minutes to reach consensus finality, and even then it's never 100%. You just get closer to 100%. The heavy reliance on energy is actually a feature - the network needs to be slow to validate a block - otherwise things end up in chaos. There is no way to fix it directly with Bitcoin. A second layer on top of Bitcoin will actually make Bitcoin like a digital gold reserve. Also, at the point when there will be no more new Bitcoins mined, transaction fees need to be implemented to keep the network going.

    Therefore, from a purely technical perspective, there are already much better solutions. (For nerds, check out Hedera Hashgraph, a proof-of-stake based, very fast, public distributed ledger system that is asynchronous Byzantine fault tolerant, and reaches finality in seconds.)

    The myriad of alt/sh!t coins show that the barrier of entry is low, but the barrier of success quite high. What makes Bitcoin strong is the existing user base, and the "faith" in the system. This can not just be usurped by better technology. Very similar to gold.

    If indeed institutional investors start pouring into Bitcoin, followed by large corporations, the supply-demand equation alone will catapult Bitcoin up. But this hinges on one big decision: governments deciding to "milk" Bitcoin via taxes, rather than trying to stifle adoption. If governments were to disallow conversion from Bitcoin to fiat, it would mean no institutional investors, and no adoption by corporations. Bitcoin would remain a fringe medium of exchange / store of value. The moonshot can not be achieved in that scenario.

    The quantum computing risk as outlined by Dave comes on top.

    For now, I will remain overweight on gold. Gold has a track record of thousands of years. With Bitcoin, it's too early to tell if it will be around in its current form in 20 years. SOME form of currency based on a distributed ledger system will surely be around. But betting on the earliest horse might prove premature.

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  • Sun, Oct 11, 2020 - 8:28pm

    #48

    000

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    Rumors of horseless carriage are overblown





    Is not energy the ultimate currency? then bitcoin would be the advertising mechanism, no?

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  • Mon, Oct 12, 2020 - 1:03am

    #49
    RHuk

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    Cash is Trash; Wealthy buying BITCOIN, Raoul Pal selling Gold to buy Bitcoin

     

    "Cash is Trash"     Ray Dalio

    Raoul Pal  " He and The Wealthy out of cash and into Bitcoin.  Raoul even considering selling his gold to buy Bitcoin"





     

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  • Mon, Oct 12, 2020 - 1:24am

    #50
    RHuk

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    513,542 Bitcoin held by just 8 Public Trading Companies

    Interesting Information:

    513,542 BTC appear to be held by just 8 Companies





    I have read elsewhere that many of the top Wealth and Investment Funds are invested in Grayscale.  e.g. Rothschild = $1.4B

    BITCOIN takes minutes to hours to mine and LOTS of electricity.  = NOT GREEN

    but store of value?

    XRP  transaction takes 3 to 5 seconds and costs cents $ = FUNCTIONALITY

    Expression    "Watch what they do as well as what they say"

    My thinking is to DIVERSIFY into a handful of CRYPTO which appear to have purpose.

    Investing in companies (Stocks) that also trade in CRYPTO may also be beneficial??

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  • Mon, Oct 12, 2020 - 3:09am

    DaveDD

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    Energy concerns

    Actually, there are some interesting projects that consume way less energy, scale better, cost less when transferring monoy, and are actually more distributed than Bitcoin. Let not forget that Bitcoin was a proof-of-concept, and as such very important, and most likely to stay with us for a long time. Yes, I do have some Bitcoin in my cryptoportfolio, I’m no fool, but the majority consists of  energy friendly, exiting “new” projects.

    Dave

     

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  • Mon, Oct 12, 2020 - 6:15am

    VTGothic

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    You've got it

    @dreinmund
    Good analysis on the fundamentals of BTC and its value proposition.

    I trust your comment "for now I will remain overweight on gold" implies you have some exposure to BTC also? Given your grasp, that would be prudent.

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  • Mon, Oct 12, 2020 - 9:15am

    dreinmund

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    dreinmund said:

    I’m in the process of setting up crypto accounts and cold storage wallets. I will probably stick to BTC and ETH, with some HBAR as a technology optionality on a better “blockchain”.

    Just as an FYI to everyone that’s not active in the space yet - if you live in the US, and you want to buy crypto, it’s almost impossible to do it anonymously - everything I looked at has KYC requirements that will ask about some from of identity confirmation.

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  • Mon, Oct 12, 2020 - 10:02am

    000

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    Down the rabbit hole: anonymously

    anonymous is not the point of bitcoin. security is. bankers and robbers have had quite enough fiat anonymity for a few centuries don't you think. are you a banker? paradoxically, if one wants to truly possess bitcoin one must accept the responsibility of being your own banker. if not then one can have a claim on bitcoin held by an intermediary, custodial banker/exchange. Soon, all surviving banks will have the bitcoin option added to their menu of services, like USAA currently does (lucky veterans and active duty!) but then you will not have changed your relationship to money at all. or have you, moohahahaha! happy hollow-ween.

    “But it’s no use now,” thought poor Alice, “to pretend to be two people! Why, there’s hardly enough of me left to make one respectable person!” —Chapter 1, Down the Rabbit-Hole

    "If you don't have the keys, you don't have the coin" -- Andreas M. Antonopoulos

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  • Tue, Oct 13, 2020 - 3:37am

    #55
    RHuk

    RHuk

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    Legarde ECB - Confirms Central Banks working on Digital Currencies! FINANCIAL RESET coming.

    Legarde ECB - Confirms Central Banks working on Digital Currencies! FINANCIAL RESET coming.  Could Ripple XRP be the 'BANKING BRIDGE'?

    XRP is designed as Banking Bridge and to provide "ON Demand LIQUIDITY"

    XRP is designed under ISO Standard 20022 and mentioned in IMF documents.!





    https://www.weforum.org/whitepapers/central-bank-digital-currency-policy-maker-toolkit

    XRP looks like the Gold Standard - Banking Payments?

    Stellar XLM (Very Quiet Hush Hush!)- looks like Silver Standard - Small payments?

    Where does AMAZON fit in?

    Starlink System - 5G Internet for ALL - Also Linking the Unbanked and Underbanked?

    The 4 th Industrial Revolution?

    BITCOIN as a store of Value - Prudent Diversification?

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  • Tue, Oct 13, 2020 - 4:47am

    #56
    Nate

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    central banks and digital currencies

    Last week Armstrong's private blog said the ECB is ready to launch a digital currency and the ideal date was January 1, 2021.  For those with lots of time on there hand, here is a link from that post:

    https://www.ecb.europa.eu/pub/pdf/other/Report_on_a_digital_euro~4d7268b458.en.pdf

    It does appear that this is 'for all the marbles' (h/t Dave)  and the stars have aligned to utilize a digital currency  squeeze the last drop of blood from the common folk.  I also get the sense that Revelation is playing out before us - no one can buy or sell unless he has the mark of the beast.

    The you tube in the previous post (#55) is really good.  Christine Lagarde is pure evil.

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  • Tue, Oct 13, 2020 - 7:03am

    #57
    westcoastjan

    westcoastjan

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    More great information to consider...

    RHuk and Nate - thanks for the interesting info.

    I have in the past at PP posted links from articles on a website called Philosophy of Metrics (POM), where there were many extensively and well researched articles about the SDR and XRP. The site owner appears to have taken a break from producing his often esoteric articles but what he has written in the past few years is still highly relevant, and his predictions quite accurate.

    This is the link to many of the SDR-XRP related articles, for those who are interested.

    Here is some of what he wrote in the 2018 article titled 'XRP Will be the Dominant Monetary Asset of the World':

    "... I had always considered that the SDR of the International Monetary Fund would be used as the global reserve asset in place of the dollar. It is an asset which no one nation controls. But with the growth of blockchain and the crypto market, we can see that Ripple’s XRP is being engineered for this purpose. Already the Bank of England, the Federal Reserve, and the Saudi Arabian Monetary Authority have partnered with Ripple on test projects, among a host of other banks, like RBC, TD, and a 61 bank consortium in Japan.

    The XRP interledger will connect all other ledgers, whether fiat or crypto. The interledger will be truly decentralized and not controlled by any one nation, bank, or institution, including Ripple themselves. It is something all nations can agree upon and use, as XRP transactions take 3 seconds and cost fractions of a cent. Compare to SWIFT which is expensive and takes 5 days.

    Central banks will likely begin this year diversifying their foreign exchange reserve accounts with the top crypto assets. The rush for regulation is creating volatility in the first phase of the crypto market, but will allow for massive institutional money to enter during the next phase. Nothing in its digital version has failed. This will be the same with money. Fiat currencies will be replaced over time with their crypto versions.

    The world is truly on the edge of a fundamental change. The internationalization the yuan is just one. The developing cross-border payments function of Ripple XRP, and the emergence of the whole new industry of micropayments it will allow, will create competition and a new level of ingenuity which we can only imagine right now." ...

    For the crytpo keeners, I highly recommend reading this guy's stuff.

    I do believe that the Covid-19 crisis provided the opportunity they wanted/needed to capitalize on to roll this out. Whether by accident or design, who knows. I see massive changes coming at us hard and fast. We are being further corralled into a global system with dystopian characteristics. There is not much we can do about it except educate our selves and try to be a bit ahead of the curve to help with personal decision making.

    Jan

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  • Tue, Oct 13, 2020 - 8:08am

    Mohammed Mast

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    Mohammed Mast said:

    XRP is total bullshit. Is it crypto? Yes is it decentralized? No. Jeb McCaleb is still selling off his millions of XRP. Will it be the foundation for central bank digital currency? I certainly hope so. Then the bullshit will be out of the space and people interested in freedom can get on with it.

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  • Tue, Oct 13, 2020 - 8:17am

    #59

    Jim H

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    6

    Very well stated Jan...

    Jan said,

    I see massive changes coming at us hard and fast. We are being further corralled into a global system with dystopian characteristics. There is not much we can do about it except educate our selves and try to be a bit ahead of the curve to help with personal decision making.

    The severity of the police state crackdown on folks who don't comply with Covid mandates in places like Australia, UK, CA, and NYC (think Hasidic community) are hard to stomach.  We are in a new era of authoritarian rule.

    My outlook is that the outcome of the US election will determine whether this process is allowed to come to complete fruition, or not.  It's really up to us in the US - I do think that we have a chance to turn this around and reverse the process.

    Here are the choices as I see them;

    1)  BLM/Marxist/Woke/Critical Race Theory vs MLK's classic anti-racism vision and meritocracy (I will be writing much more about this as we approach the US election)

    2)  Captured statist propaganda news vs a Free and reasonably neutral Fourth estate

    3)  More Neocon War mongering vs ongoing Peace initiatives

    4)  Dependency and Statism (socialism/communism/Marxism) vs Freedom and primacy of individual rights

    I am sure many folks here could add to my list - it's not exhaustive.  By drawing a comparison, I am not suggesting that the US constitutional/capitalist model is perfect... there is much work to be done.  And yet, the progress that we have made in terms of equality with regard to race/sexuality/ableness have all moved forward dramatically in my lifetime.  We are not done but the US constitution has proved supportive of continuous progress.  We need to have honest conversations about how to really address homelessness, our continuing inability to root out bad cops, and the true costs of our footprint on the environment.  There's more of course, but we are not going to have these conversations if we are no longer free.  If you think the NGO's of today like the UN, and the WHO, have the solutions you have not been paying attention.. these are just captured, globalist institutions intent on subverting the US Constitution.

     

    At least 100 million people died during the last century as authoritarian regimes imposed various "solutions" on their populations.  If you think it can't happen again, you are being naive.

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  • Tue, Oct 13, 2020 - 11:21am

    #60
    VTGothic

    VTGothic

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    Joined: Jan 05 2020

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    4

    Down the Rabbit Hole via Detour

    I tell ya what: this site really, really doesn't like it when someone takes time to compose in the Comment window. But I've learned to save a copy before hitting that 'post' button.

    I think Parker Lewis has responded very cogently to every objection and concern I've read on this thread in a series of essays he's penned over the last 13 months. They're all collected in one place, which is convenient.

    Having read them, I took some time to focus on what I think is the nugget of his perspective, and what is the essential conclusion he draws from his thinking, which - it having been disallowed here (for taking too long to compose, I think) - I've posted in the Forum, here: https://www.peakprosperity.com/forum-topic/for-a-guided-tour-of-the-btc-rabbit-hole/

    That's also where I linked the archive location of his 15 essays.

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  • Tue, Oct 13, 2020 - 12:41pm

    bob

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    energy

    I just read an article in Science Daily that said usable energy is available at room temperatures from a new type of material. It's low voltage and low powered, but essentially free energy. The belief is it will replace batteries in small devices. What will that do to the price/value of bitcoin if eventually it can be 'mined' for free?

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  • Tue, Oct 13, 2020 - 2:14pm

    #62
    dreinmund

    dreinmund

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    Posts: 273

    1

    dreinmund said:

    I know that crypto proponents claim that the energy issue is either solved or won't be an issue in the future. I still think it's an area that merits discussion.

    • Green / alternate energy

    I don't think green / alternate energy will be the savior that they sometimes claim. We know that even solar and wind is not viable without massive fossil fuels to manufacture and set up the "green" infrastructure. EROI is crap.

    • Comparison to energy used in mining

    Some argue that the energy used to "mine" cryptocurrencies (which is nothing other than validating the chain and recent transactions) is comparable to energy used to mine precious metals.

    Minor detail: energy expended to get gold or silver out of the ground and mint it is expended ONCE, and doesn't have to be continuously spent to maintain gold and silver. Somehow, this reminds me of recent trends where software is shifting from buying it outright to a service with recurring revenue stream. With current cryptocurrencies, the ongoing energy input is like "renting" the ability to "own" them.

     

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  • Tue, Oct 13, 2020 - 3:15pm

    bob

    bob

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    Joined: Apr 02 2020

    Posts: 14

    0

    delay

    d

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  • Tue, Oct 13, 2020 - 4:01pm

    westcoastjan

    westcoastjan

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    Joined: Jun 04 2012

    Posts: 989

    4

    please provide supporting data

    Hello rleever. Your comment/question is not worth much without any supporting data or links for readers to follow up on. You are relatively new here. Opinions & speculation only get people so far here at PP - just so you know in case you are looking for discussion engagement.

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  • Wed, Oct 14, 2020 - 6:20am

    #65
    VTGothic

    VTGothic

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    3

    Does 'case, case, case' rise to a nascent 'cluster'?

    Following the earth-shaking announcement by MicroStrategy almost 2 months ago, and the very recent announcement by Square just a few days ago, now - yesterday - NYC-based investment advisor and management firm Stone Ride ($13 billion under management) has publicly acknowledge that it holds 10,000 BTC - approximate value, $115 million.

    Stone Ridge holds its BTC through subsidiary NYDIG. NYDIG's CEO echoed the sentiments of Microstrategy's Michael Saylor when he said:

    The macro backdrop against the public health backdrop has caused a lot of people to rethink their portfolio composition. (source)

    Saylor has also said that it was the lock down and the Fed's follow-on multi-trillion dollar money printing that got him thinking about how to protect his company's retained earnings. Stone Ridge has apparently engaged in a similar exploration that has led to a shared conclusion.

    We are watching case, case, case now coming increasingly close enough to one another to form a nascent first cluster of corporate investors entering BTC with invested funds in the range of multi-millions of dollars. As Parker Lewis has said,

    There are no circuit breakers in bitcoin and there are no bailouts. Each individual participant is maximally accountable and it is a market devoid of moral hazard. When the dust settles, what does not kill bitcoin only makes it stronger. In a literal sense. It is surviving and thriving in the wild, without any central coordination. It is not for the faint of heart, but it is the land of the free and the home of the brave. When it survives, there will still only be 21 million bitcoin, and its very survival will reinforce its place in the world. Increasingly, with each monetary stimulus injected into the legacy financial system, bitcoin’s core value function will become more apparent and more intuitive to more people. It will not just be by chance; it will be so because of the stark contrast bitcoin provides. Even with all its volatility, it is laying the foundation of a more stable monetary system.

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  • Wed, Oct 14, 2020 - 2:28pm

    bob

    bob

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    energy

    I asked this earlier but didn't get a reply.
    recently a Science Daily reported on research from U o Ark about using graphene to produce what would be essentially free energy.
    https://www.sciencedaily.com/releases/2020/10/201002091029.htm
    My question is how would this affect Bitcoin Mining if the processes didn't require using the standard energy grid but instead harnessed this process? Granted there would be a one time cost in acquiring the energy source but after that there should be zero cost.

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  • Wed, Oct 14, 2020 - 2:50pm

    #67
    nhuvelle

    nhuvelle

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    2

    nhuvelle said:

    Dear Peak Prosperity readers,

    I encourage you to learn more about bitcoin, to ask more questions and really take the time to study it. I see the same surface level arguments being spouted by naysayers year after year. They all disintegrate over time. All that's left is bitcoin and the absolute power of the free market forcing it's will on the world. It cannot be stopped. It will continue to eat all the world's wealth until it has changed our society forever and for the better. Of course there are always unknown unknowns, but that is not a reason to not invest in bitcoin. And even if you are not a believer, you must admit it is much riskier to NOT own any bitcoin than to own a little bit.

     

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  • Wed, Oct 14, 2020 - 2:59pm

    #68

    Jim H

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    Posts: 1552

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    Rleever, and free energy

    I saw this graphene story when it hit the news a few weeks ago.  Here is the press release from the University, which contains a link to the underlying journal article;

    https://news.uark.edu/articles/54830/physicists-build-circuit-that-generates-clean-limitless-power-from-graphene

    I am skeptical, and I asked someone much smarter than I, a physicist at Sandia, what he thought of the paper.  Here's what he said,

    "this seems to violate thermodynamics, so there must be some mistake in their measurement or analysis, or their description of their setup".

    In any event, these are tiny, tiny amounts of power we are talking about.  The only application for this, were it to work, would be powering long lived (read no battery) remote IOT devices like sensors.  Best regards, Jim

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  • Wed, Oct 14, 2020 - 3:50pm

    Mots

    Mots

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    Posts: 510

    3

    Energy is Everything, Politics and bitcoin is nothing

    I think that the bitcoin aficionados here are confusing bitcoin with the crypocurrency invention.   Yes, cryptocurrency is a major revolution, no the original bitcoin is not the second coming of Christ, any more than the first mass produced Ford is the be all or end all, or the first Apple I is the only and best computer to use forevermore.....

    A.  Prove me wrong about this fact:  The amount of energy consumed and diverted from real wealth production to "mine" 100$ of bitcoin is about as much as the energy used to mine 100$ of silver, which is a lot and hurts us.  The free shit for nothing bitcoin investment of time is another form of energy that is diverted from wealth production and is an impediment to peak prosperity via sustainable community building.  An example of this is the comment above` you can invest $11,000 today and in 5 years have increased your money over 90x.` OK so lets divert energy away from community wealth production and join the banksters in the great American looting game..... This is a big part of bitcoin apparently.  Each of the previous financial bubbles (the build out of the internet was an example) arose from advances in technology that took time to absorb and the cryptocurrency revolution is not an exception.  Things are kind of unstable now and not dominated by real wealth production but instead money for nothing games.

    B. Prove me wrong about this fact:   Wall street has figured out how to BS the value of bitcoin with futures trading in bitcoin.  The free market is over for bitcoin.  Vast currencies can be pulled out of a banker's butt and is used on a daily basis to jack the bit coin price.  This not our savior.  see for example https://www.youtube.com/watch?v=qiECo7ZnXeU  C. why or how is Greg M incorrect in this video.  Have you considered his arguments?

    Bitcoin takes too long and is not trivial to use.  Bitch and complain all you want but the international bankersters are coming out with their own cryptocurrency for international transactions that will be more efficient (esp. energy wise)  (D. prove me wrong on this fact), more stable in valuation (E. this is another fact, prove me wrong), and easier to use than bitcoin to buy advanced products from China.  And, corrupt governments are rolling out their own digital currencies and will force you to pay taxes with a currency that is not bitcoin.

    A completely ignored fact is that government=globalist bankers and they are one entity.   Even if a government politician cannot control bitcoin, the globalist investors do control bitcoin,  They are really one entity.  G. prove me wrong on this fact that the bankers control

    We need to work with a currency that is tightly linked to value added real production and not controlled by the corrupt investor class of money-for-nothing arm chair keyboarders who do not produce wealth.   We need to build the sort of tools that Charles Hugh Smith alluded to in his new book.  Bitcoin doesnt address those problems that we discussed in the comments section of his talk with CM.

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  • Wed, Oct 14, 2020 - 4:37pm

    #70
    nhuvelle

    nhuvelle

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    nhuvelle said:

    I agree with Mohammed Mast. The anti-bitcoin arguments on here are all total dogshit. All of them. There is no intellectual honesty on this site when it comes to bitcoin. News flash: It's OK to admit you don't understand bitcoin or you are scared of it, don't trust it. But it's enough already with these stupid fucking arguments. DaveFairtax, are you really trying to tell us you've done cost/benefit analysis on the potential impact of quantum computing and have determined that bitcoin is a bad investment because of it? This is your scientific opinion on the matter? Give me a break.

    Mots,

    Terrible post. You are wrong. Just plain wrong about everything. LOL I almost can't believe how bad your post is.

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  • Wed, Oct 14, 2020 - 4:57pm

    Mots

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    Nhvelle: "arguments on here are all total dogshit. All of them.."

    I dont have a dog in this fight.  I really dont give a shit, dog shit or otherwise...........

    why not address some of my facts?  I am merely responding to the basic facts

    I would be extremely happy to find out that my facts are wrong since I would like to use a stable reliable source of value for trading that is easy to use.  I really would like to find a reliable tool that is fair, simple and is linked to and encourages real wealth production.  The value of a man's digital wallet contents should be determined by his efforts and how well he contributed to the needs of those around him.  Not by invester bankster groups or speculators.  The basic elements of the cryptocurrency invention can be applied to a local based real bills type of currency that can mesh with payments to the outside wherein only wealth creators and buyers of their goods set the value.  Bitcoin is a nice experiment that demonstrates some nice principles.  I was hoping that hashgraph would be used in a format that works for local transactions and wonder what has happened with that.  I am interested in discussing the advantages/disadvantages of that and dont have time "for get rich without working!" schemes......

    I was hoping that the cryptocurrency invention would be applied for a real bills usage (look up the real bills doctrine). This, unlike the simplistic use of bitcoin as an investment by those who do not participate in real wealth production could cut out the bankster class and insulate from parasites freeloading off of wealth creators.   Maybe such discussion of the real value and use of the cryptocurrency invention must be sought on a different blogsite where deeper cryptocurrency thinkers can be found.

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  • Wed, Oct 14, 2020 - 5:43pm

    robie robinson

    robie robinson

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    nhuvelle

    your profligate use of expletives is charming?

    when crypto goes to the moon, it will take the moon to buy food . a summary of Mots.

    husbandfatherfarmer, and one who has little respect for....

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  • Wed, Oct 14, 2020 - 6:05pm

    nhuvelle

    nhuvelle

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    nhuvelle said:

    Mots, I'll give you credit it does seem like you are trying to learn. Unfortunately your thoughts are so absurd to me that I don't have the energy to rebut them all. Why do I have to prove you wrong that "Wall Street has figured out a way to BS the value of bitcoin" and "the free market is over for bitcoin". Bitcoin is the freest, fairest market in human history. I think there's a case to be made that free market capitalism was never even possible before bitcoin. Your claims are beyond absurd. I can't engage with them lol I'm sorry. Our starting points are too far apart.

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  • Wed, Oct 14, 2020 - 6:24pm

    Jim H

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    Posts: 1552

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    nhuvelle

    You are acting like an arrogant, petulent child  - you have no idea the depth of some of the intellects you are engaging with here, especially when it comes to Mots.  While I still tend toward a positive outlook on Bitcoin, it's because our dept-based fiat currency is so corrupt and so non-transparent... Bitcoin has it's place.

    The argument Mots makes here is absolutely relevant;

    B. Prove me wrong about this fact: Wall street has figured out how to BS the value of bitcoin with futures trading in bitcoin. The free market is over for bitcoin. Vast currencies can be pulled out of a banker's butt and is used on a daily basis to jack the bit coin price. This not our savior. see for example https://www.youtube.com/watch?v=qiECo7ZnXeU C. why or how is Greg M incorrect in this video. Have you considered his arguments?

    Once a leveraged paper market is created whereby toilet paper digital fiat can be used to move the market around, you can no longer call Bitcoin a free market.  Mostly free still?  Maybe, but still.. it's now polluted.

    https://www.cmegroup.com/trading/bitcoin-futures.html

    Oh look, our old friends at CME.. we should trust them, right?  At least there is an underlying market where Bitcoin itself is traded.. the bankers have been so successful at their games with Gold and Silver over the years that there literally is no underlying, physical market.  The tail wags the dog in PM's.

     

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  • Wed, Oct 14, 2020 - 8:15pm

    dreinmund

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    dreinmund said:

    nhuvelle, people like you that attack anyone that asks questions, and are full of arrogance and intolerance are why people don't want to believe in cryptocurrencies.

    As to the merits of your argument - well, it confirms that cryptocurrencies are mostly a faith-based affair. That doesn't make it worthless or any less viable. But unless this attitude changes, crypto is not going to go mainstream. And without going mainstream, you can kiss the moonshot valuations good-bye.

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  • Wed, Oct 14, 2020 - 8:58pm

    #76
    nhuvelle

    nhuvelle

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    nhuvelle said:

    The good thing about a truly free market, which bitcoin and only bitcoin is, is that it doesn't matter if the space is filled with douchebags like me. If you don't believe in bitcoin now, you might FOMO in at 50k or more likely at 250k. But the free market will not be denied it doesn't matter what you think or what I say. Have a good week everyone :).

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  • Wed, Oct 14, 2020 - 9:05pm

    #77
    nhuvelle

    nhuvelle

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    nhuvelle said:

    Also Mots, you're saying you want a cheaper to produce money? It shouldn't be as costly as silver?? Do you not understand that having the marginal cost of production of bitcoins move up in lockstep with the price is the whole point of this thing? Proof of Work requiring miners to spend their thermodynamic energy combined with bi weekly difficulty adjustments to keep the system in a perpetual non-equilibrium state is literally the most important thing to understand about bitcoin. And massive price increases are an important piece of the equation. This is what the "Blockchain not Bitcoin" people don't understand IMO. See y'all in the citadels.

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  • Wed, Oct 14, 2020 - 9:19pm

    Mots

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    a cheaper to produce money?

    my main point is that we are all ignoring the most important issue, raised by CHS:
    as I stated we need " a reliable tool that is fair, simple and is linked to and encourages real wealth production.  The value of a man's digital wallet contents should be determined by his efforts and how well he contributed to the needs of those around him"

    Bitcoin does not do this and actually is getting more and more corrupt/bankerized with time.

    >>>>Money issuance should be determined solely by and directly limited by real wealth production.<<<<<<

    Diverting a large proportion of precious energy to "mining" bitcoin is NOT a solution.  Hashgraph uses vastly less energy and has some pluses and minuses but overall would be a better candidate to harness for a real goods currency system that directly connects to and represents real wealth.  This is apposite to banker and hedge fund managed monetary moonshots.

    The real bills doctrine could be embedded into a labor cryptocurrency to make this happen, as intimated by CHS.

    I hope that people do not spend too much precious time and resources on participating in bankster games. We have small resilient communities to build.

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  • Wed, Oct 14, 2020 - 9:49pm

    nhuvelle

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    nhuvelle said:

    Agree to disagree Mots. I think the high energy expenditure is absolutely necessary for Bitcoin. But it's not "diverting" precious resources. Au contraire. The hyper competitive nature of bitcoin mining incentivizes miners to seek out the most efficient, renewable energy sources. I think this will be amazing for our energy on this plane. We are going to go from a world with finite energy and infinite fiat money to a world with infinite energy and absolutely scarce money.

    Edit- And besides, I own my purchase power I can do what I want with my electricity. It's not wasteful if it's how I want to use it.

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  • Thu, Oct 15, 2020 - 9:06am

    #80
    RHuk

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    IMF - Head of IMF Calls for NEW Bretton Woods Agreement

    https://www.imf.org/en/News/Articles/2020/10/15/sp101520-a-new-bretton-woods-moment

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  • Thu, Oct 15, 2020 - 10:20am

    #81
    tbp

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    Threats/downsides to BTC < threats/downsides to fiat and PMs

    Quantum computers breaking the encryption is a potential major disruption if done suddenly without warning, but like Antonopoulos says, they only get one shot. We would either checkpoint and revert with a quantum-resistant algorithm (similar to the 2010 bug when billions of BTC were created and the chain was successfully reverted within a day), or in the worst-case scenario we would transfer to already quantum-resistant cryptos, causing BTC price to plummet and potentially die... but that would only be the end of BTC, or the first version/period of it, not of crypto itself.

    With Internet cuts we still have satellite and radio transaction broadcast... or you can simply not use crypto during such times (other assets like PMs, fiat, and barter would likely be more appropriate).

    If prolonged Internet partitioning/sharding occurs, as I wrote in the post BTC threats: quantum computing, partitioning, we'd likely end up with parallel chains (forks) like, say, Western BTC (BTCW) and Chinese BTC (BTCC), which can operate in parallel as with BCH and eventually merge back.

    In a carefully planned attack scenario by either of (or a combination of) NSA, CCP, SSP, or Google, these two attack vectors could be combined, but even then I don't think they'd be able to do long-term damage. I'd say fiat and PMs have even greater potential downsides.

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  • Thu, Oct 15, 2020 - 11:54am

    #82

    sand_puppy

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    Adam, Might be a good time an place to post your primer on bitcoin for beginners (like me)

    Pretty sure you did an article with step by step instructions on how to open an account, purchase BTC, and move it to a hard wallet.  Could you repost that please?

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  • Thu, Oct 15, 2020 - 2:39pm

    nhuvelle

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    re: bitcoin for beginners

    Hi Sand puppy,

    If you want to dive in yourself I recommend checking out this link: https://bitcoin-intro.com/

    If I were to guess at the demographics of this website I would guess that a lot of people might want more individualized help with their bitcoin journey. There are a number of trusted companies that can help you buy and secure your bitcoin using "collaborative custody" i.e. only you can control your bitcoin, they cant touch it, but they can help you if screw up. A lot of the most experienced bitcoin users still opt for services like this instead of doing it all themselves. Here are the top 3 to check out:

    https://unchained-capital.com/

    https://river.com/

    https://keys.casa/

    I recommend giving each of them a call, I think all of them give you a free first time consultation to go over your individual situation. And whichever way you choose, I encourage you to start ASAP! The bull run could accelerate at any moment :).

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  • Fri, Oct 16, 2020 - 12:45am

    #84
    Ruth estior

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    Reference for setting wallet, find proper way to buy and deposit bitcoin

    In US:

    https://www.investopedia.com/tech/how-to-buy-bitcoin/

    In Chinese: 比特幣購買

    https://to-coin.com/buy-bitcoin/

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  • Fri, Oct 16, 2020 - 6:55am

    dreinmund

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    Worst-Case scenario

    tbd wrote: "worst-case scenario we would transfer to already quantum-resistant cryptos, causing BTC price to plummet and potentially die... but that would only be the end of BTC..."

    That's exactly my point. There is nothing inherent in Bitcoin that guarantees it will be around and valuable in 20 years. There might be a high likelihood, but no guarantee.

    The Bitcoin firebrand preachers make it sound like it's a sure bet. It's not.

    Some forms of cryptocurrency will be around, and some forms of public distributed ledgers will exist and have widespread use, but it might not be BTC and blockchain.

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  • Fri, Oct 16, 2020 - 7:42am

    nhuvelle

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    nhuvelle said:

    ^You're wrong. Bitcoin has already won. It doesn't matter what you think. "Oh you're so toxic this is why people don't like bitcoin". No. I'm literally just trying to help you. Think of it like tough love.

    And obviously nothing is "guaranteed" as in 100% mathematical certainty so I am assuming you didn't intend to use that meaningless technical definition of the word here.

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  • Fri, Oct 16, 2020 - 8:52am

    #87
    VTGothic

    VTGothic

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    It's true Bitcoin might not be around in 20 years, but...

    ...it's at least as true that it very well might be. The question is: is the possibility that it might not be around reason to not invest in case it might be?

    Your bank account might not be around in 20 years. There's a very good chance your "blue chip" company might not be around in 10 years, given that at least a third are zombie corporations. Are those reasons to stop saving money or holding investments?

    There's an equally good chance that the USD won't be around in 20 years, given the high debt overhang, the move of the world away from dollar dominance, and the potential threat BTC poses as a verifiable hard money. Add in that USD is going to go digital itself, which will actually weaken it and allow power mongers to use it as a cudgel against misbehaving citizens in the US and across the world. Should we all abandon USD today because it might be toxic or gone in 20 years?

    Quantum computing might make all of this discussion moot. Shall we abandon all computer-based tech because of what might happen one day?

    There's just no point to this kind of argument. It's selectively engaged, which means it's merely rhetorical: a quest for a rationale to reject something that is personally uncomfortable for some other, unnamed (perhaps unrecognized) reason. It seeks to dismiss without serious engagement and examination.

    At this point, and looking forward, it is my personal estimation (for whatever that's worth to anyone else, which ain't much) from taking a long, deep dive into cryptocurrencies (and from keeping up to date on developments technical and social), that BTC is the cryptocurrency with a proven use case and future. I believe it will steadily bring sovereign currencies into more disciplined behavior by providing an alternative, more secure and less volatile store of value across time, that is untouchable by any person or agency that wants to take or strangle a person's access to her own wealth. And those sovereign currencies that won't learn to behave better will go by the wayside as citizens freely opt for the better money.

    I don't think BTC can be stopped. And every time someone else adds BTC to their own portfolio the network gets stronger and the opportunity to stop BTC shrinks. When medium-sized and large corporations start parking money in it, the writing on the wall gets underscored in deep, dark lines. Those who pay the re-election bills of politicians will not allow those politicians to cause them to lose their BTC-held funds. And the more politicians and the Fed water down USD or other sovereign currencies, the more corporations and high net worth individuals opt to put some portion of their wealth in the more stable option: BTC. It's a virtuous cycle.

    Because I don't think BTC can be stopped, I think everyone should now have some exposure to BTC. (Even Fidelity Investments thinks up to 5% exposure in personal investment accounts is a good idea.[source]) Hey, maybe in 20 years that will have proven to be a mistake. But what if it isn't? In that case, the 10x to 50x - perhaps even 100x - increase in value will have life-changing implications for the millions of people who dip one foot into this pool of water.

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  • Fri, Oct 16, 2020 - 9:24am

    dreinmund

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    dreinmund said:

    nouvelle, how old are you ?

    Name one 1st generation invention that remained unchanged and was never replaced by a better 2nd, 3rd and fourth generation ?

    Are you still riding in horse carriages, instead of cars ?

    Are you still using big clunky cell phones, instead of smart phones ?

    Are you still using a cable-connected landline phone ?

    Are you still using MS-DOS ?

    Are you still using a black & white TV ?

    Are you still buying CDs ?

    Are you still watching movies on VCRs ?

    Are you still writing paper checks (obviously not) ?

    Are you still using light bulbs with carbon filament ?

     

    What's more amazing is that literally, the one thing that remained "unimproved" over thousands of years is gold. Go figure.

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  • Fri, Oct 16, 2020 - 10:06am

    nhuvelle

    nhuvelle

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    nhuvelle said:

    I'm 33 years old. I don't have time right now to write a long post, but remember bitcoin is a difficult subject and it's important to think as clearly as you can. Simple analogies like you are offering only work on the surface. None of those products have network effects. They work the same whether you are the only one still using the outdated technology or not. Also, and this is EXTREMELY important: Cryptocurrencies do not actually compete on their technological attributes, they compete on their MONETARY attributes. In which case being boring, stable and batle tested is preferred.

    As you say gold is the only thing that has lasted unimproved. I have respect for gold. But now bitcoin IS DISRUPTIVE TO GOLD. That's how big of a deal this is. Bitcoin beats gold across all properties that make gold valuable: Durability, divisibility, portability, recognizability, and most importantly scarcity. Are you still going to use your old clunky gold like your black & white tv?

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  • Fri, Oct 16, 2020 - 10:42am

    #90
    dreinmund

    dreinmund

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    dreinmund said:

    nouvelle, you might be too young to remember the dot com bubble.

    We have heard the same arguments back then. "This time is different". "Technology / network effects". "Product / service xxx is going to change mankind forever". While these things can be regarded as true in the broader sense (like internet), if you tried to monetize it ("betting on the right horse"), you lost a LOT of money.

    I agree with your assessment that BTC / crypto competes on monetary attributes. But what this really means is that it's all about faith (you call it "network" effect). The issue I have is that mere 10 years is not enough to judge if something can develop the same level of "faith" that gold has build for thousands of years. It's just too early. That doesn't mean it can't happen.

    You dismiss that technology progression is actually relevant ("They work the same whether you are the only one still using the outdated technology or not.")

    I assure you, it is. Technology progression (like quantum computing) is a threat to crypto. Heck, I can even see threats to gold - what if a planet / asteroid full of gold is discovered ? Or someone makes alchemy actually work. It could be just a matter of time.

    Gold didn't achieve universal "faith" in a handful of years. Even more, it would have never developed this status if technology had made it obsolete just a few years later. It's not how this works. Look at other items that were money for dozens or hundreds of years, and had developed a lot of faith, but ultimately fell out of favor. They got usurped. It's rather presumptuous to think nothing could ever happen to BTC.

    I think that technology progression is a greater threat to crypto in the next 10-20 years than it is to gold.

     

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  • Fri, Oct 16, 2020 - 11:34am

    nhuvelle

    nhuvelle

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    nhuvelle said:

    Another important thing you seem to be missing wrt technology network effects: When you have e.g. a Myspace account you can also open a Facebook account and choose the better technology. When you hold a dollar in Bitcoin, that is a dollar you cannot hold in another cryptocurrency at the same time. This creates a massive competitive moat.

    Lol stonks, you're right I was too young for that when it was happening. But please do think deeply about this- How long did the dot com bubble last? How crazy did the prices get? Now consider that the Bitcoin "Bubble" has lasted 11 years so far and it is the BEST PERFORMING ASSET OF ALL TIME. How many years of it being the best performing asset do you need to witness until you capitulate? Consider that if you do not agree with the free market, it is more likely that you are wrong than the market is wrong.

    Everyone is defensive at first. I'm not trying to attack you or disrespect you in any way. Most of the world still thinks the same way you do, which is why we are still sooo early. And there is so much glory to be had for early adopters! Imagine being able to buy shares in the internet itself in 1980 or whenever.

    Maybe just buy some bitcoin to start. Where your money goes your mind will follow...

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  • Fri, Oct 16, 2020 - 2:50pm

    #92
    dreinmund

    dreinmund

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    dreinmund said:

    When you hold a dollar in Bitcoin, that is a dollar you cannot hold in another cryptocurrency at the same time. This creates a massive competitive moat.

    I fail to see how this cements the status of bitcoin. You can easily transfer between BTC and and myriads of alt/shitcoins, it's fast and cheap.

    I think you just made an argument against BTC, rather than for.

    How long did the dot com bubble last? How crazy did the prices get?

    Very crazy. Started in the mid 90s, and peaked in 2000, and deflated until 2002. Check out a chart for Cisco, going from a few cents early 90ies to $80 in 200. Then it dropped by over 80%, and chopped sideways for almost 20 years. Chart looks a lot like Bitcoin 🙂

     

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  • Fri, Oct 16, 2020 - 3:12pm

    #93
    nhuvelle

    nhuvelle

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    nhuvelle said:

    It sucks when you donate some time trying to help someone on the internet and they just turn out to be a stubborn idiot.

    If you are willing to make a bet vs me on bitcoin's success over the next few years I'm all for it. We can lock up some btc in a multi sig vault, great for situations like this. But I already know that you won't put your money where you mouth is so not sure why I wasted my time with this post.

    None of you scared bitcoin bears will actually put your money where your mouth is. It's rather telling tbh. I'm willing to go allin on my belief. Come get it, let's get some real answers here.

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  • Fri, Oct 16, 2020 - 4:18pm

    dreinmund

    dreinmund

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    dreinmund said:

    Oh, your next best argument: name calling.

    I guess you're also too young to know that this is the surest sign of someone losing an argument on the internet. We're done.

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  • Fri, Oct 16, 2020 - 4:20pm

    nhuvelle

    nhuvelle

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    nhuvelle said:

    I'm not trying to win an argument lol. I'm literally trying to help you out. The price of bitcoin will settle this argument in due time.

    The surest sign that someone is wrong is that they are all talk but won't put any skin in the game.

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  • Tue, Oct 20, 2020 - 7:23am

    #96
    nhuvelle

    nhuvelle

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    Posts: 53

    1

    Bitcoin NOT Blockchain

    When you know you know.

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  • Tue, Oct 20, 2020 - 9:03am

    Jim H

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    Posts: 1552

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    On the subject of scarcity...

    nhuvelle said,

    Bitcoin beats gold across all properties that make gold valuable: Durability, divisibility, portability, recognizability, and most importantly scarcity.

    I would ask that you substantiate your argument regarding scarcity.  I will argue alongside you that Bitcoin has the quality of scarcity integrity... it can't be, "printed" and there will never be more than ~ 21 million in existence.  But to just say, "scarcity"... I'm not sure what that means, since Bitcoin is in fact so highly divisible.  As you well know, Bitcoin is designed such that a person can own a unit as small as 0.00000001    BTC.  Gold is that way too, only more so.. while the idea of owning only a few atoms of Au is absurd, you get the idea.. both are highly divisible, which is a good quality for money to have.  

    Yes, the value of all the Gold in the world today is approximately $10 Trillion, as compared to Bitcoin's $220B, but does that signify scarcity?  My opinion is that this difference in total market cap. just speaks to Gold's maturity as a high scarcity integrity money-like asset.  Maybe Bitcoin will catch up.. maybe not.

    How scarce is Gold?  I did the calculation years ago and published it here on PP.com (or maybe it was Chrismartenson.com then : ) and I found that if you divided all known Gold evenly across the entire world population, each person would have about 0.9 ounces.

    I thought this was an interesting metric that spoke to the relative scarcity of Gold as an asset.  What is all fiat lost it's value and Gold was the remaining money.. what would an ounce be "worth" in that scenario?

    Given the divisibility of Bitcoin, there are actually quite a lot of units, or Satoshi's out there, so maybe in a sense Bitcoin is less scarce than Gold.  What is the smallest useful unit of Gold that you won't lose in your pocket lint?  1/50th of an ounce?  See, I could make the argument that Gold is more scarce than Bitcoin.. but I won't.. because it becomes kind of absurd.  Just as absurd as saying with confidence that Bitcoin is more scarce than Gold.......

    Anyway, I appreciate your comments nhuvelle.. keep toning down the arrogance and toning up your critical thinking and rationale and we will be having some interesting discussion for sure.  Best regards, Jim

     

     

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  • Thu, Oct 22, 2020 - 9:24am

    #98
    nhuvelle

    nhuvelle

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    nhuvelle said:

    Paul Tudor Jones this morning on CNBC with another ringing endorsement. The line about how bitcoin has intellectual capital behind it 🙂

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  • Thu, Oct 22, 2020 - 9:26am

    nhuvelle

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    nhuvelle said:

    "We're in the first inning of bitcoin" mmmmm

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  • Thu, Oct 22, 2020 - 9:35am

    nhuvelle

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    nhuvelle said:

    Jim H,

    I will try to tone down the arrogance but no promises ;). Especially as we enter this bull run of bull runs.

    Scarcity of a tradeable good can be measured using a Stock to Flow ratio. Where stock is the current total supply, and flow is the annual production of new supply that enters the market.

    Actually I'll just post this link instead of explaining it as my thoughts come directly from this article and it's updated sequel:

    https://medium.com/@100trillionUSD/modeling-bitcoins-value-with-scarcity-91fa0fc03e25

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  • Wed, Oct 28, 2020 - 6:37pm

    Barbara

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    JPMorgan Invites Banks and Fintechs to Build on Its Revamped Blockchain Network

    “Think of it as the foundation of an enterprise mainnet.”

    That’s how Christine Moy, head of JPMorgan’s newly rebranded Liink banking network, described its aspirations towards decentralization in the realm of big business.

    The revamped Liink, which is based on a fork of Ethereum, is more of a “decentralized network,” said Moy, and less like a “central command product.” As such, Liink now invites its 400-plus financial institutions (including 25 of the largest 50 banks) to start building on top of the platform.

    https://www.coindesk.com/jpmorgan-invites-banks-and-fintechs-to-build-on-its-revamped-blockchain-network

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  • Wed, Oct 28, 2020 - 8:29pm

    Mohammed Mast

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    Screw Jamie Dimon

    And the dirty deals he rode in on

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  • Thu, Oct 29, 2020 - 3:23am

    VTGothic

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    centralize decentralization?

    @Barbara

    Nice article. I like:

    Christine Moy, head of JPMorgan’s newly rebranded Liink banking network, described its aspirations towards decentralization in the realm of big business.

    Andreas Antonopolous had the perfect response to corporations rebranding to take advantage of blockchain and its potential to decentralize. I don't remember it all word-for-word, but I do remember he said it's the difference between "revolution" and "revolutionize," or between Che and a Che T-shirt worn by a hipster in a Brooklyn coffee shop. They want it all tamed and broken to their lead.

    By definition, of course, no system under centralized control is decentralized. The rebranding is not really a change in structure so much as a re-defining of the terms to fit the corporate brochure's glossy new language.

    This is the intention of Central Banks as they get into the "cryptocurrency" game, too. In the name of copying Bitcoin's decentralized structure they will create coins that give them even tighter supervision of and control over every individuals' financial life and behavior.

    They're trying to maintain command and control in a world that increasingly won't need them.

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  • Thu, Oct 29, 2020 - 8:49am

    Mohammed Mast

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    Andreas on Big Banks

    Interview with Abby Martin on why big banks are terrified of BTC

    https://www.youtube.com/watch?v=5AQ9Yuv0yiY

    This was 4 years ago

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  • Thu, Oct 29, 2020 - 2:11pm

    David Kendrick

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    Safe

    No, unless you go for mining and a 51% attack. Proof of work and transactions mean multiple miners can disprove your hacked block transaction.

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  • Thu, Oct 29, 2020 - 2:31pm

    000

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    Hash rate, eggs and spam

    One must understand this while entering crypto. It's equivalent to ordering an Uber during the rush hour:

    https://www.coindesk.com/bitcoin-transaction-fees-hashrate

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  • Fri, Oct 30, 2020 - 2:00am

    Mots

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    Hash rate, eggs and spam

    000
    If I want to buy a coffee using bitcoin, how much is the transaction fee and how long do I have to wait?

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  • Fri, Oct 30, 2020 - 3:28am

    davefairtex

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    paying using bitcoin

    So you probably don't want to pay for coffee, but paying for (say) server time is something I've done.  If you actually have the bitcoin lying around, its pretty fast.  As in  - seconds.  Because the company doing the receipt accepts the transaction as valid before the confirmation lands in the blockchain (which can take 10+ minutes).

    By convention, once it is posted to the memory pool (the pending TX queue), "that's good enough."  And almost always this is true.

    You can post a TX without a fee - it  just might take even longer to actually get formally added to the blockchain vs queued up waiting in the mempool.

    What rate do they give?  It was basically a forex transaction for me, so they can hide fees inside the rate they quote me for the TX.  So YMMV.

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  • Fri, Oct 30, 2020 - 8:06am

    000

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    Cryptooooo! BTC will eat the FED

    LOL





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  • Fri, Oct 30, 2020 - 2:48pm

    Mohammed Mast

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    BTC

    Elon is enveloping the globe with Starlink. Every square centimeter will have cell coverage. A smart phone, and a Starlink acct is all you will need to conduct crypto business. The large exchanges will likely become extinct thanks to DEFI.

    P2P transactions will make crypto an actual currency. There will be no need to link to the corrupt legacy system. The future is now. STACK SATOSHIS

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  • Fri, Oct 30, 2020 - 2:56pm

    Mohammed Mast

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    Buying Coffee.

    At current valuation in USD you can buy 2,720 latte's at Starbucks in seconds with zero fees if you use an exchange and Starbucks uses the same exchange, via email. Or if nostalgia for the legacy system is your thing use your Coinbase Visa card. The transaction will process before you  well before you get your latte'.

    Though I prefer Chai

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  • Fri, Oct 30, 2020 - 3:29pm

    Mots

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    BTC: "P2P transactions will make crypto an actual currency."

    Thank Mohammad
    P2P seems like the best part of bitcoin.
    I also look forward to the day when we have P2P communications and would like to work with other amateur radio people here on a private system.

    P2P is where its at for peak prosperity as centralized, racketeered systems collapse, in my opinion.  I wonder how a P2P payment system can be adapted to meet the requirements of CHS's labor backed currency.........

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  • Fri, Oct 30, 2020 - 4:25pm

    Mohammed Mast

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    P2P

    It is very simple. First of all CHS does not have a Labor  backed currency so let's get that off the table. We already have a P2P currency. Actually many of them Edward Snowden uses Monero. I have sold, as have others, goods and services with crypto. I pay my plumber with Ether. There is no reason in the world to try to conceptualize a wheel. We have numerous options for wheels. BTC is a wheel that rewards savers. DUH. BTC is P2P. DUH. BTC is secure. DUH. BTC is transparent. DUH.

    Unfortunately you and many others are looking at it as a sepia toned snap shot. It has gone beyond still photography, it has gone beyond silent movies, it has gone beyond talkies. It is well beyond 3 D. The space is changing by the second.

    Whenever I work for someone I always tell them they can pay me in crypto.

    Here is your free introductory offer to earn crypto. You don't have to buy it  you can earn it with your "labor"

    Are you interested? Are you willing to go into the rabbit hole?

    You and many others here are very smart. I have said this many times here. What is clearly holding you back is fear. Your fear is preventing you from seeing opportunity. There is an opportunity for you and everyone here to "earn" crypto. There is nothing preventing you from earning crypto but your own prejudice. Here is an example. Does this site accept crypto for subscriptions? Does it accept it for T shirts? Does it accept it for seminars ? Why not. I am not going to pay USD for anything this site offers. However I might spend some Ether which cost me $2 for something here. Get it? Here is another one. Dr Doom has spent most of his time denigrating crypto. What if he offered to help people get started and explained everything to them for a small pmt. of crypto? What if he  produced an instructional video? Or a book? He is the resident genius techie and people here trust him. What if he set up an escrow for transfer of goods using crypto via smart contracts?

    You write about solar. Could you sell your writing for crypto? Could you be a consultant for someone wanting a system? Could you design a system for someone?  I don't know what other skills you or anyone here has that they could market but if you can get paid in fiat you can get paid in crypto. Why not be a part of a revolution to start a democratic, transparent, trustless P2P economy. THE FUCKING TECHNOLOGY IS HERE RIGHT NOW. All you have to do is do it. Why not?

    Seriously why no? It checks all the boxes? Why wait for CHS to do something that he has not done, is not doing and will never do? There is no need to do anything, it is done.

    You want a P2P labor backed currency it's here dude. "Will work for Bitcoin"

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  • Fri, Oct 30, 2020 - 10:57pm

    davefairtex

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    labor backed currency

    I think there might be a misunderstanding about what a labor-backed currency is.

    All bitcoins are created by mining - this structure rewards people who do the work of keeping the bitcoin network running by giving them brand-new bitcoin.

    A labor-backed coin (laborcoin?) would reward people who provide labor that was determined "to be in the public interest" by giving them brand-new laborcoin.

    More people doing "public interest" work?  More laborcoin would be created, and then handed to the workers.

    I'm not taking a position on this either way - just explaining the structure.

     

     

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  • Fri, Oct 30, 2020 - 11:47pm

    Mots

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    labor backed currency

    Thanks Dave

    The main point as I see it, is to get rid of the bankers and politicians and free-shit-for-nothing slugs who ruin it for wealth creators.

    A labor backed currency based on the Real Bills Doctrine would serve the wealth creators and be self-limiting such that units would only be issued that correspond to real work-value added.  Us wealth creators (I hope that I speak for everyone here) need to shake off the speculators and bankers who merely steal from us and enslave us.  Doesnt everyone care about building or re-building a prosperous world unencumbered by free shit for nothing grifters/bankers?  We need a real labor based currency and not something that is gamed and valuated by grifters.
    The old ways of "investing" money to grow based on other's efforts does not work in a world that is no longer exponentially growing.  The amount of and evaluation of a crypto should directly be determined by labor, not by religious-like focus of attention on get rich quick, which served the banking class well in the previous world of exponentially growing resources/oil/wealth.....
    We really need that labor backed real bills doctrine based crypto or something that would operate the same way.

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  • Sat, Oct 31, 2020 - 3:10am

    davefairtex

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    real bills doctrine

    Mots-

    Can you be a bit more specific about the conditions under which your Motscoins would be created?  Reading the Real Bills Doctrine, it sounds like the only way you can create money under that system is by creating some physical good and assigning a value to it.  Do you receive the coins in that situation whether or not you can sell the item?

    How would this work for services?

    Or are the coins "borrowed" into existence (from - whom?) by the manufacturer and must be later repaid with interest once the product is sold?

    I think I just need a little more detail.

    By the way, I'm not anti-bankster if they siphon off just 1% of GDP - they loan the money, they take the risk.  I'm anti-bankster when they siphon off 4-5%, like they do today.  And whenever they get convicted of any crime, its always a monetary fine that the shareholders end up paying, while nobody goes to jail.

    Send them to prison when they do wrong, and trim the scams back down to 1%, make banking boring again, and I'd be fine with it all.  Like central banking - when all they did was make loans on good collateral during turbulent times, I'm fine with it.  Its the crazy mission creep that's out of control.

    And yes, I think banking will still work going forward.  There will always be some number of "self-liquidating debt" projects even if things contract.  Not every project will be loss-making.

    But I'm totally open to hearing different approaches.  Especially ones that put writing software front and center.  🙂

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  • Sat, Oct 31, 2020 - 8:51am

    Mohammed Mast

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    Money

    It is quite clear some people do not understand Liberty. It is also clear that most people do not understand money.

    Thus they end up with neither.

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  • Sat, Oct 31, 2020 - 10:24pm

    Mots

    Mots

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    the real bills doctrine and a labor backed self issued currency

    Dave, thank you for your question.
    Shortly after 2008 (and reading CM's work in detail) I invented a labor backed currency and wrote a 25 page summary including an example.
    Here are some short passages from my document (which I am happy to send to anyone that gives me an email):

    "A self regulating individual-issued currency is described that allows each wealth producer to issue currency. Freedom and independence is promoted as the currency amount and quality are controlled directly by the acts of the issuer in tight cooperation with the community that utilizes the currency. A central database is used to allow members of a community that may encounter the currency evaluate the quality and quantity of the currency and thereby expose the currency itself to immediate and constant market force reality-checks............In an embodiment, each producer of wealth issues his or her own money when the producer wants to receive something from others in a transaction. The issued money acquires value via reputation and/or via collateral backing. Interest is not required, and the monetary currency, which from a legal perspective is a straightforward contract with others, is self regulating. If one person issues too much money without backing (either in reputation/ability to perform, and/or by available collateral for alternative redemption) then that money (and only that money) is damaged and further issuance not welcomed. This system allows a wealth producer to work hard and to create good reputation and wealth without having to give away wealth products to faraway places to satisfy banking schemes."

    "

    Currency can be printed from a personal printer using a software program. The program prepares a front side of the currency unit that displays identification of the issuer, such as his name, trade name, address, website and/or email address. The back side optionally displays conditions of the currency, such as the work or service to be performed, conditions of redemption etc. The issuer’s signature preferably is on the front but may be on the back. Contact information, such as website, access codes and the like may be included to allow the currency recipient to look up the public database on the currencies issued by various individuals and organizations.

    The Personal/Organization Currency Value is determined by Reputation and/or Collateral

    Currency may be issued for a variety of goods and services and may be denominated in any units or measure that makes sense. Currency may be issued in kilowatt hours, solar (sunlight dependent) kilowatt hours, an amount of kilowatt hours based on time of day or other consideration, volumetric or energy unit measure of oil, biodiesel, synthetic gas, natural gas, other hydrocarbon, wood, wood pellets, or other measure of energy. Currency may be issued in units of food, futures of foodstuffs, futures of energy or other materials etc.

    Valuation of a personal currency is important and can be achieved a variety of ways. The public database facilitates the generation and dissemination of reputation of the currency issuer. Data such as successful redemptions of currency, rate of circulation of the currency before (or without) redemption, and total amount or rate of change in outstanding currency allows judgment on the value of a person’s individual currency. The data base preferably includes assets of the issuer that are tied to (burdened by) the issued currency. Currency reputation is enhanced by contractually backing the issued personal currency with collateral of the issuer. Collateral may be tied to specific currency units and in fact may be the sole basic value of an issued currency. Currency may be issued and valued solely on the basis of the ability to redeem for a precious metal such as gold or silver. Combinations of these also are possible.

    Public Database Facilitates the Currency Use

    In an embodiment a server or other data base holder is connected to a net such as the internet and provides information about the individual currencies. Preferably the data base has identification of an individual (such as name, address) linked to a history of his currency. For example, a currency history could include at least one of: proportion of contracts fulfilled, average pendency (time before fulfillment) of currency contracts, complaints received, total outstanding currency contracts, circulation of the issuer’s currency contracts, and the like.

    A “public” database may be freely accessible to members of a group and is “public” with respect to that group. For example a barter or currency club may be organized to share their local currency and utilize password restriction to access their “public” database.....

    Basically I propose merely using electronic technology and basic contract law to supercharge what we already do in sustainable small communities..........

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  • Sat, Oct 31, 2020 - 11:15pm

    Mots

    Mots

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    labor backed currency

    Dave

    Here is an example of a labor backed currency.  Although this obviously can be implemented totally by electronic form, it is much more fun to give and receive real paper with the issuer's picture and signature on it as well as enter a database.  This is designed for real communities that are cohesive and which ALREADY have an informal banking system of doing good for others to incur favors (the Japanese are real champs at this and quickly take care of fraudsters at the community level).   Currency should be fun to use.
    Front and back of the paper (which is not necessary but more fun) are presented below:

    Untitled 1

     

     

     

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  • Sat, Oct 31, 2020 - 11:20pm

    davefairtex

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    asset-backed currency

    Mots-

    Hmm.  It kinda reads like a patent.  🙂

    So when you say the currency is issued in "units" of various standard things - it sounds like an asset-backed currency rather than a labor-backed currency.  Perhaps that's a nit.  I didn't see any examples of "labor" in there.  As in, "an hour of legal consultation."  "One day of at-home nursing care."  Etc.  This isn't an objection, it is just an attempt to be accurate.

    Currency may be issued in kilowatt hours, solar (sunlight dependent) kilowatt hours, an amount of kilowatt hours based on time of day or other consideration, volumetric or energy unit measure of oil, biodiesel, synthetic gas, natural gas, other hydrocarbon, wood, wood pellets, or other measure of energy. Currency may be issued in units of food, futures of foodstuffs, futures of energy or other materials etc

    I can see why you object to all the rest of the currencies, including bitcoin, because they aren't backed by anything - that is, you can't redeem them for anything.  There is no "asset" standing behind the currency - which both puts a floor and a ceiling on its value.

    This plan would certainly remove all the power from the government/bankster cartel, which is definitely a worthwhile goal.

    Ok, so, let's go through a typical transaction.  So with all these different units, and different reputations (resulting in various levels of discounts) - let's say a prospective car buyer comes in with a bunch of different bills, hands them to the used car dealer, who then has to go through a process of...valuing each bill, negotiating a discount with the buyer ("no this guy is a scumbag, I'm not taking his currency, this one is all right, this other guy is great, I don't need more volts, do you have any wheat?") - it would seem to inject a fair amount of friction into everyday transactions.

    I mean, I have enough trouble buying wine, with all its infinite variety.  And I have wine-searcher!  And the variability is only across a single axis!

    I think there's a reason things evolved to a standard national currency, versus banks issuing their own bills, some blowing up, with discounts, etc.  A national currency is just a lot more efficient.  Of course this also grants a lot of power to the issuer, which is eventually used to their advantage.

    I guess that's the eternal cycle.  Complicated local systems are (generally) more secure, but more efficient options can much more easily be rigged.

    I mean - Amazon is a case in point.  Very efficient.  No need to have accounts on a thousand different websites.  But do I trust them?  My gosh no.  I know these people are weasels, charging me one price, while charging someone else another.  And once they own the world...company store.

    So is there a way we can get some sort of automated efficiency while retaining the local asset backing and security?

    EDIT: I see, you implemented this as an assist/bookkeeping system for already-functioning communities.  This assumes for the most part that people don't travel far - or conduct transactions in distant places.  I mean, they could - MonsterMegaCorp could have its own currency too.

    Replacing your database with a blockchain would be a pretty easy step.  A blockchain is just a public database, after all.  You'd need someone - a bunch of someones - to run the database nodes - and they'd have to be paid - possibly by mining.  Or a stake.  A QR code could identify each note.  It would fix the counterfeiting problem, at the cost of de-anonymizing the transaction.  [Identifying who did counterfeiting might be a little difficult if this thing got too popular - or if the notes came from far away.]  Issuing a note might cost something.  It probably would, actually.

    Still not sure how the exchange rates & discounts and convertibility would work.  For this not to make people's heads explode, you'd probably need some sort of convertibility.  "volts per needlepoint-hour."  Or something.  Otherwise its just barter.  Which went away because transactions just had too much friction.

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  • Sun, Nov 01, 2020 - 1:11am

    Mots

    Mots

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    labor backed currency

    Hi Dave
    The example given is 5 hours of labor for the currency bill (I left out some detail).  As we do now in carpentry etc. some people may prefer issuing a money bill useful for 1 hour of personal labor, or for a particular job of repairing a door for example.  A new unfamiliar member would use a mix of asset backing, such as good for one hour of labor with asset redeemable of 0.1 oz of silver.   This helps take care of an estate if a person dies with money bills outstanding.  A new untested person would use a higher asset redeemable value to make his money more valuable before developing a reputation.  This kind of stuff is done by contract law.
    We have tons of computers and AI, right?  That is how the complexity of multiple sourced bills is handled.  Already when I buy something from China I use at least two currencies and sometimes three.  Computers are smart enough to keep a ledger of value based on experience and other data and to instantly compare and collate different individual currencies into one transaction.  At some point a private club of currencies may gravitate to using the backing asset such as silver to merely compare and collate using the asset without even considering the reputation and other actions of each issuer.  However, a big part of the human experience is that we constantly review and discuss each other`s value and this merely recognizes what has been going on for millennia.    We should be focusing our mental energies on these factors and thereby encourage real wealth formation instead of gamesmanship seeing who can out game a banker for instant wealth taken from the wealth creators.

    Tracing  between large groups or with a large group is done now by shoehorning the local currencies into a more universal currency.  Most of the international transactions nowadays are carried out by actors who generate units of their local currency and convert to a foreign one (the US dollar) for the transaction.  After the dollar collapses I expect that a gold backed digital currency, maybe from China or bitcoin will be used by many.  It will be an interesting ride my friend....

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  • Sun, Nov 01, 2020 - 1:27am

    davefairtex

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    gold backed digital currency

    Mots-

    I think there's a zero percent chance that the CCP will ever issue a gold-backed digital currency.  That's because, if they did, there would be no ability to engage in corruption which is legion in the banking system over there.

    The trick is - a powerful CCP mogul gets the bank to loan his girlfriend money, which she never has to repay.  He takes 80%, she keeps 20%.  Loan is on the books, always marked as good.  That's what happened to Fan Bingbing.  Supposedly.

    This is something that doesn't only happen in China.

    This is why the RMB is not treated with much respect internationally.  Its also why the very first thing moguls do is get their money out of the country.  Its also why the CCP does not open its capital account.

    If China ever comes up with a - fully convertible - gold-backed digital currency, then that will only happen when the CCP is no longer in control of the country.

    A pretend (i.e. non-convertible) gold-backed digital currency - that's entirely possible.

    Look at the banking reserves around the world.  China is the #2 economy in the world.  Yet, what is its percentage of central bank reserves?  Today: 2%.

    Why do you think that is?  Are all those central bankers just "anti-China?"  Or do they know something we don't?

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  • Sun, Nov 01, 2020 - 1:35am

    Mots

    Mots

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    `corruption in the banking system is legion over there`

    good points

    is there a sound money out there?  I define sound as being backed by real wealth and being tied to real wealth.

    Is bitcoin sound money?  Virtually all the comments on bitcoin seem based on the illusion of wealth wherein we are supposed to buy bitcoin and sell it later and thereby abscond with real wealth produced by others (who therefore lose by a kind of theft) by gaming the system.

    I assume that the purpose of an economic system and of a currency or a money is to act as a tool to facilitate real wealth production and distribution for all of us to have a better life.

    It seems that `sound money` is rarely discussed or considered here so I welcome your comment.  I think that the real bills doctrine has a role to play in making a sound money.

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  • Sun, Nov 01, 2020 - 2:32am

    davefairtex

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    sound money

    We talked here about this long ago.  Lots of discussions of sound money.

    I think the general agreement was, if the issuer couldn't make more of it upon demand - if there was some structural limit on money creation - then that was sound money.

    'Is bitcoin sound money?

    Yes.

    Virtually all the comments on bitcoin seem based on the illusion of wealth wherein we are supposed to buy bitcoin and sell it later and thereby abscond with real wealth produced by others (who therefore lose by a kind of theft) by gaming the system.

    Bitcoin proponents are all about getting the first mover advantage.  They believe they are doing the equivalent of buying Manhattan from the Indians for $25.  Is that theft?  Or simply seeing the future faster than someone else?  If debasement is baked into the cake, then any "sound money" that everyone agrees with has value will end up being a store of value.

    I assume that the purpose of an economic system and of a currency or a money is to act as a tool to facilitate real wealth production and distribution for all of us to have a better life.

    I think that's half right.  Money has two purposes: a store of value, and a medium of exchange.

    Storing value is critical.  If you can't store value, you will never defer compensation, there will be no savings, and no investment.  You cannot "save for a rainy day", or "prepare for your retirement."  This seems unfortunate.

    "I'm gonna save a few wheat tokens so I can be able to eat if/when I'm unable to work."  Otherwise, you have to store the wheat yourself.  And wheat goes bad.  Etc.

    You can of course save gold - but then why not just use gold as money?

    The real bills doctrine is one abstraction layer above barter.  But it doesn't seem to be sound money to me.  Because you can't really save it.  It is too dependent on the individual - as you pointed out, if they die, that's a problem.  Old-people money will be worth a lot less than young-people money.  It will suck to be old.

    At the same time, it clearly works in real life.  So maybe we can find some way to facilitate it.  Labor-money which allows personal creation (perhaps at some kind of discount), interoperating with some other store of value.  You were kind of hinting at that.

    And there is a limit to issuance.  The system should provide a cap for individuals, and companies.  That would keep it sound money.

    Bitcoin could work as the store of value component, so would a convertible gold-backed bitcoin.  And if I wanted to retain your legal services, I could just go on the open market and find your outstanding issued bills, buy them up, and then wave them at you when I came to your office.

    Who knows.  They might even go up and down in value depending on demand.

    I think its an interesting system.  Never really heard about something like this before.

    Hmmm.  Yeah.  There would definitely have to be a discount on your hourly rate for it to be worthwhile.  You issue 1-hour notes at a 10% discount.  I can redeem them for full value.  That makes it worth my time to hoover them up.

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  • Sun, Nov 01, 2020 - 3:39am

    VTGothic

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    A couple thoughts on Mots' and davefairtex's conversation

    It's an interesting back and forth, Mots and dave; thank you, guys, for its civil tone and the time you're taking to flesh out Mots' idea. Reading through, this morning, I have two reflections.

    First, for me Mots' explanation of his labor-backed individually-produced currency system convinces me it only has a hope of working in a fairly closed, small community. In such a setting, however, any system the locals devise is sufficient; hence Ithica Hours. But like Ithica Hours, there's a reason such systems, fairly described by dave as one step of abstraction up from barter, don't translate well beyond the hyper-local. And why Ithica Hours and its ilk have ultimately failed.

    Applying IA to such a system seems to me to simply add a level of complexity that will more likely amount to confusion: if person A shows up to purchase something from person B using scrip from persons B, C, D, and E, even pointing out the relative values of each scrip according to the latest AI-derived relative values index would require person B to both confirm and affirm those valuation claims made by person A and, having done so, consider them personally acceptable under the immediate circumstances. How much easier would the whole transaction be if they all agreed to use one community-wide scrip. That, then, gets to the prior issue of how the local marketplace values each producer's output in that common scrip. In close communities that process, formal or informal, can be fraught with conflict. It's very hard to tell a carpenter that she really sucks at crown molding work, especially if she's a neighbor and that's her source of livelihood.

    I think that the smaller and more intimate a community, the harder it becomes for the marketplace to conduct a free and impartial evaluation of the value of each person's labor and end results.

    Second, as one early adopter of BTC I want to point out that I am not buying in low to sell high at a later date. There are speculators doing so, of course, especially latterly. They come and go. My intention, as that of most hodlers, is to hold BTC until it has enough network built out to be usable as currency to actively buy and sell goods and services. I want to use it (or a secondary, BTC-backed layer) as money - real money that reliably stores and expresses value across time and geography, unlike fiat currencies. That's the real vision of BTC diehards.

    The volatility in BTC is already beginning to dampen, and will more do so as its market cap grows and participation rates increase. Over the next 30 years or so it very likely will become a truly global alternative to what will become increasingly volatile national currencies.

    Any true money (distinct from fiat currency) properly represents the virtues Mots champions. When embraced broadly, that is, beyond some very local community, such money (which can be precious metals or a secondary pm-backed layer as readily as BTC-backed) can store the value of production and facilitate trade without the wild speculative gyrations we have seen in currencies since the debasement and then untethering of once gold-backed national monies. When money is sound, banks and even speculators provide the necessary virtue of liquidity (along the lines dave suggested when he said a kind word about bank margins).

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  • Sun, Nov 01, 2020 - 6:16am

    Mohammed Mast

    Mohammed Mast

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    Sorry Dave

    The following statement is an assertion for which you have no proof.

    "Bitcoin proponents are all about getting the first mover advantage.  They believe they are doing the equivalent of buying Manhattan from the Indians for $25.  Is that theft?  Or simply seeing the future faster than someone else?  If debasement is baked into the cake, then any "sound money" that everyone agrees with has value will end up being a store of value."

    You and others would call me a proponent of BTC. I am not a proponent of BTC (crypto) to gain "first mover advantage". Mots is stuck doing the time warp again " it is just a jump to the right, it's just a jump to the left" He and lots of people are overthinking cryptocurrency.

    Mots ignored my post for good reasons< albeit personal and prejudiced. BTC and other cryptos are "labor/energy based." Crypto is a medium of exchange. As VT pointed out the currency promoted by Mots is extremely limited to a very small group/area. Ithaca hours failed. Local currencies are not decentralized, they require a great deal of input to keep them up and running. I brought Paul Glover to our town to give a presentation on Ithaca hours in 08. A group of us worked hard at getting one established. Then came BTC. It made local currency obsolete. BTC is in fact a global local currency. I have used it as a medium of exchange. I have used it as a store of value. One problem with local currency is they can be counterfeited. It is impossible to counterfeit BTC. If I want to send my local currency to Vietnam to buy a container of plywood, how does that work Tip it doesn't.

    Are SOME people wanting to take advantage of being early adopters. Mark Rees comes to mind. It would be good to remember some things about BTC. It was developed and launched in response to the 08 meltdown. It was conceived as a democratic form of money, decentralized to prevent the hierarchy from gaming us by controlling money. The vast majority of early adopters were anarcho capitalists. I know this because I spent many hours on forums discussing the ramifications of the technology. Are most people now speculating? Perhaps or maybe many are hodling like VT and myself for the day when it has greater acceptance and velocity.

    A big problem with labor backed currency has been exposed by SC2. What if there is no labor? Unemployment of 40% means no one earning money. What about people unable to work? What about the elderly? The infirm?

    Once again we have a global local currency, actually many that are far more efficient than paper very local currency. There is zero need to invent another one. A better a strategy is to embrace what we have and make it stronger. 2 billion people around the globe are unbanked. Crypto changes that with a cell phone.

    The future is here.

    Will work for crypto.

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  • Sun, Nov 01, 2020 - 6:21am

    davefairtex

    davefairtex

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    labor-backed coin = local money creation

    There's one more attribute that Mots is talking about.  Something that bitcoin doesn't provide, that is actually super useful to a community.  And that is, being able to create money without requiring a bankster.  (Or being a "miner".  Or borrowing bitcoins from your neighbor.  What if your neighbor doesn't have any coins?  What if none of you do?  What then?)

    His monetary system basically allows individuals to borrow money into existence without use of a bank, on the strength of their word and/or reputation and/or skillset.

    It turns out, this is super useful, especially in a deflationary environment.  That's what local Depression currencies were all about - eliminating the banksters and the payday loan weasels and the loan sharks (basically the same group) that take a cut of everything and provide little value.

    With a "labor-backed currency", every person can basically create money from nothing, based on their promise to provide their own labor (or product) to the recipient.  You are the bank.  Everyone is the bank.  Your debt is extinguished when you do work, or buy back the obligation from the market.

    Bitcoin can't provide this feature.

    This is a form of elastic money.   There are a lot of details to be worked out, but this is the essence of what he's talking about - a high tech framework for all the local currencies that popped up during the Great Depression.

    Companies do this right now by financing their accounts receivable.

    This would basically provide this ability to normal people.

    "I'll gladly give you a haircut Tuesday, for a hamburger I can eat today."

    So this is an elastic medium of exchange, but not a store of value.  If we could somehow link the two, I think we'd have something really useful.

    I do not have any of the details worked out.

    I'll say it again.  How do you work for bitcoin, if nobody nearby has any?

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  • Sun, Nov 01, 2020 - 8:30am

    Mohammed Mast

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    I guess You and Mots have missed the News

    It's okay it is a relatively new phenomenon. BTW there are only 2,5 million (of 21 million) BTC left to mine. The vast majority of BTC are in circulation. You don't have to be a miner to acquire BTC. As I have said you can work to get BTC. You Can sell goods and services to get BTC. Hell I will give you and MOTS each a Satoshi if you actually research crypto.

    Digression over. The relatively new phenomenon is called DEFI. I am not by any means an expert so I can't address many questions. I am just scratching the surface myself. Crypto can be loaned to others. Traditional financial instruments are being adapted to the space.

    There are coins such as Tezzies which  allow you to stake and earn interest. You have to have 8,000 to "bake" but you can pool with others or put them on an exchange like Coinbase and EARN almost 5%.

    "how do you work for BTC if nobody nearby has any?" Dave really? Come on man. I realize you are new to the internet. lol But we are linked to a global network. As I have stated (once again NUMEROUS times) Elon Musk is covering the globe with Starlink. You yourself have sent BTC for server time correct? Somebody earned money in that transaction. How do I send a local currency (paper) 11,000 miles around the globe? Why would the other person be interested in a local currency that is not local?

    You and Mots are having a nice little theoretical conversation that will go nowhere. After all is said and done more will be said than done.

    You do not have to reinvent the wheel.

    For the record for all the gold bugs here present company included, gold is not a currency, it is not a medium of exchange (except for the central banks) . It is a purely speculative investment based on a historical belief that it is a store of value.

    Welcome to the 21st century.

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  • Sun, Nov 01, 2020 - 10:46am

    Mots

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    labor-backed coin = local money creation

    Thank you Dave
    I agree.  A big issue here is that the future is local and we need tools that comport with this reality.
    I never considered "money" as having a "res" but instead merely a tool to facilitate cooperation leading to the production of goods and services.  Another tool, just like law is a tool and not something to pile up as a goal of existence. Maybe understanding this res feature of "money" or "currency" can help unwind the biggest problem that everyone is ignoring, namely extreme inequality.
    I suggest that focusing on accumulation of money per se is counter productive to society because basing success or failure in contests between people on how much money the opponent has causes great inequality.  I prefer to live in a society based on merit.

    I suggest that instead of working hard to build up a store of money or bitcoin as a life goal, which has a main effort of providing an unfair advantage over other people, we should instead work for long term a. build up of good-will bank accounts with our neighbors,  b. build up of humus in our soils, c. build up character and good experiences in our children, d. build up value in our own companies and skill sets, e. build up ownership in other companies in the form of stock, f. build up our homes, g. increasing ownership of commodities including food, gold and silver and tools against times of want.  Saving money to build a company or complex machine in the future is great, but this idea of currency having intrinsic value so lets pile it up as an insurance policy decreases acts such as those listed above, which are true investments that comport with reality, which sometimes checks us with unpleasant consequences.  Regarding all those advantages for using bitcoin internationally and global etc.  I am trying to disengage from globalism.  I dont want to be connected and integrated with global and regional systems of control.  You can have that.  I tried real hard a few years ago to buy bitcoin but was forced to give copies of my passport and drivers license to total strangers.  Why is that?

    I disagree with the fervent desire to plug into global resets or financial systems of control.  I hope that I am wrong, but I see an extended dark ages coming and am convinced that we need to develop local systems, including local monetary systems.  I am happy for others who enjoy their globalism and smart phones and bitcoins.  Just ignore me and my community.  Ignore me, I and my community are too stupid and to poor to pay attention to.

    I know  that my view is unpopular and that taking one's money out of the system to "invest" in resilient community development is considered foolish by many.  Perhaps I have my own irrational belief system, which matches the intensity of those who "believe" in bitcoin as a guiding principal of daily life.

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  • Sun, Nov 01, 2020 - 12:01pm

    Belmontl

    Belmontl

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    Qoin - Local Currencies, TIME -- Crypto currency

    Dave/Mots ...

    (Mots -- i would love a copy of your paper to read and share with Scott, Also thanks for sharing Solar info with Nick, my friend and Neighbor in Atlanta, Additionally Dave -- 100k thanks to you, a close 2nd to Chris Martenson - for your tireless work, perceptive , generous nature, one day our paths shall cross  )

    good dialog, close bright young friend of mine Scott was mentored by Bernard Lietar (one of designers of Euro, Community currency expert)

    Bernard Lietaer, renowned money systems and community currency giant, passes away at 76

    Scott worked with Qoin

    Qoin Foundation is a non-profit, full-service
    complementary currency design and implementation organization

    For almost 30 years, the Qoin Foundation and its associates have specialized in designing, implementing and managing tools for economic development on all continents, specifically to achieve a wide variety of viable and sustainable social and environmental impact outcomes.

    https://qoin.org/

     

    I have a small inventment in TIME

    About Chrono.tech

    Chrono.tech is building a comprehensive ecosystem for HR and finance, helping reduce or eliminate the barriers to recruitment and payment processes for both workers and employers.

    https://chrono.tech/

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  • Sun, Nov 01, 2020 - 6:14pm

    Mohammed Mast

    Mohammed Mast

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    DEFI





    CRYPTO "expert" Alex Saunders who might be familiar if you watched the video "Bitcoin made simple. Interviewed by Raoul Pal. This is what a real interview with a Crypto "expert sounds like. This interview is packed with information and vision. You , at least I will have to watch this several times to unpack it.  Raoul Pal is doing amazing work with Real Vision. For the latest cutting edge analysis with some of the greatest minds in finance I can't recommend it enough. I am now going down another rabbit hole. The promise of BTC is being realized. As Paul Tudor Jones has said this space has some of the most sophisticated, intelligent people in the world working in this space. Competition in the monetary system? Bring it on BTC wins hands down.





     

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  • Sun, Nov 01, 2020 - 6:50pm

    Mohammed Mast

    Mohammed Mast

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    Gold/ Silver and the Environment

    It is a cognitive dissonance to say you want to protect the environment and own gold and silver. Many pixels have been floated here criticizing BTC for its energy usage. This happens while at the same time those same people totally ignore the damage done to the environment by PM mining. The recent discovery of the Polyrus gold field is a prime example. It is a fairly "rich" deposit . 2.5 grams of gold per ton of rock. Now try to wrap your head around a ton of rock producing 2.5 grams of gold. How many toxic elements will be released into the environment? For every 1/3 of an ounce of gold 20 tons of toxic waste containing , cyanide and heavy metals is created.

    https://www.hcn.org/articles/climate-desk-mining-companies-pollute-western-waters-citizen-pay-for-the-clean-up

    Water Quality

    https://www.chicagotribune.com/nation-world/ct-us-mining-wastewater-pollution-20190220-story.html

    Let's be honest there are  only 2 E's

     

     

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  • Mon, Nov 02, 2020 - 2:48am

    davefairtex

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    local system only

    Mots-

    Ok, I think I understand now - you are looking to construct a regional system for your local community - this is only to track the max-90-day labor-and-product obligations that you guys issue to one another.

    Any savings must happen outside the system.  If you want to save for a house, a car, your upcoming marriage, your family, or your new business, you'll have to do it outside the local monetary system.  These debt issues are strictly temporary, and are deliberately not made for savings.

    Ok.  Since I've done a fair amount of AI, I don't think you can rightfully just toss the job of automatically valuing a fistful of labor contracts to my side of the fence.  "Here, AI. You handle it.  Somehow.  You know - because you're AI."  AI can help, but it can't do this.

    Not all attorneys charge the same hourly.  Not all hairstylists do either.  I'm not sure you can get away from having some sort of baseline value.  You suggested silver ounces.  Sure.  That works.  Silver, gold, bitcoins - something non-perishable, that everyone agrees has value.  You pick what they are.  But that item has to be floating around in the community, otherwise, it doesn't back anything, because it won't be usable to extinguish the contracts when necessary.

    Computer could flag default risk for someone who issued too many contracts, or for someone who has defaulted before.  But that's just a warning flag.

    Each contract has to be convertible at some rate.  If you manage to acquire wealth somehow (say, you sell your house), you need to be able to buy back your issued contracts at a price certain.  Or if you get sick, break your leg, your warehouse has a fire, your farm gets flooded, a riot destroys your shop, and can't fulfill for some other reason either short or long term.  The default has to have a set price to it.  Presumably.

    Or - you tell me?

    Basically what I think you are describing is a metals-backed currency, that locals can issue based on their promise to deliver labor or products in the near future, with the promise to deliver metal instead, if there is a failure to deliver on the contract.

    The computer is used in place of "the bank" to assess the relative creditworthiness of the "community borrower."  These effective labor-backed currency/loans are all short-term, and presumably a discount is provided to motivate people to redeem the contracts for the actual product within the time allotted.

    Does that sound about right?

    EDIT: In a series of Jack Vance novels I read long ago, the interstellar currency was the SLU - standard labor unit - the value of an hour of unskilled labor under standard conditions.  Perhaps that could be the underlying benchmark, instead of a fixed amount of silver.  If we're going to have a labor currency, maybe we just go whole hog.  Picking vegetables in the hot sun might be 1.5-2 SLU, working as the maid or babysitter: 1 SLU.  My direct reports writing the code for this monster: 6-8 SLU?  I shudder to think how much our patent counsel would cost.  Triple that, perhaps?  🙂

    The SLU sure does personalize wage differentials, doesn't it?

    The community could have a set rate for silver-to-SLU conversions.  Heck.  Maybe those are 90-day contracts too.

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  • Mon, Nov 02, 2020 - 3:25am

    davefairtex

    davefairtex

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    requirements gathering

    Note for the rest of you - requirements gathering is about figuring out what sort of system your customer needs.  Some things you can do, some things you can't, and sometimes you have suggestions in how to construct what they need that maybe they didn't think of.

    I'm not saying the customer is always right - but they usually have more insights as to what they are trying to accomplish, and you might consider respecting that insight.

    I'm not sure what Mots is asking for requires blockchain.  A centralized local database is probably good enough.  But of course you have to trust the person running it, and - maybe that's too much power for one person or entity.  So having this distributed around the community might make everyone feel more relaxed.  And distributed databases are definitely more resilient too.

    And the code reuse is always helpful.  The phone apps that use blockchain could be fairly easily repurposed to use this local currency.  Maybe even the same code, just modified a little bit.  Why reinvent the wheel?

    Everyone has a different view as to how the future will unfold.  Some imagine the future will look a lot like it is today - completely connected internet, but - maybe just less oil.  Others think there will be far more difficulty, and their region will be on its own.  Maybe only a local/regional internet/power grid will still be working reliably.

    As they say - intelligent people can differ on how this all plays out.

    Me, I have no idea.  I'm just gathering requirements.

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  • Mon, Nov 02, 2020 - 3:27am

    Mots

    Mots

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    local currency

    Dave
    Yes that is about right.
    We already have the liberty to seek assistance based on a promise and not backed by a metal or bitcoin or whatever.  A very good artisan can do that and farmers have arranged financing based on future production. Farming often requires that.
    I personally like to see silver/gold/electricity/food backed currencies.  Each person can issue their own money.  We do this already in a small tight knit community and having it more formalized just makes it easier and will help us weather a collapse.  After all, this was done during the last depression for the same purposes.

    I know of many house sales/transfers based purely on family obligations.  In fact, most housing transfers traditionally and even now in many present countries are based on promises and not a bankerized sale.  Americans have been divorced from the reality of normal human existence.  I define `normal` based on probability and historical records.  At the end of the day, when a man loses a hand via accident, or loses crops or a house via fire, the community and his bank accounts held with neighbors and friends have always dominated and were relied on to make the person whole.  Americans have been living in a strange money-money-money dominated world.   On the other hand the legal concept of private property rights that make Rome so powerful is best implemented with a reliable backed currency that will work throughout the land of the contracting parties.  But success going forward will occur outside of globalist corporations.  I suggest that we will (or at least the lucky ones)  rediscover our humanity as we learn to live in small communities again.  I like to see each person issue their own currency for facilitating small community life.  If someone needs to buy advanced products from China, that`s fine. The tail does not have to wag the dog.  If a Chinese factory requires bitcoin (or yuan) for a purchase, fine, at that time we can get bitcoin (or yuan) as needed.  Lets see what kinds of digital currencies that we will be forced to use and also what kinds of local credit unions that arise to handle such needs.  There are tons of `financial` experts who are or will be out of a job soon and who can address those needs.  I never claim to address or suggest or opine on a complete and comprehensive soup to nuts economic program and structure for the world.  But CHS has some good points regarding labor backed currency which already exists in some informal ways outside of a 3rd party money corrupted society and which we should explore in my opinion.

    We absolutely must work on our investments in each other, in building soil, creating energy etc. at the local level and stop wasting so much time and energy dreaming about free shit, in my opinion.  Many of us have discovered that basic food for living and other things such as shelter are available and supplied at the local level completely outside the bankster controlled money system.   Lets focus a little bit on that and stop screaming about bitcoin and ranting about the necessity of international communications/transaction for bitcoin implementation in order to do stuff like get coffee from our neighbors and trade our labor.  Local community interactions are better without getting basterdized by relying on far away 3rd parties who are motivated solely by free shit.  I suggest that any party to a transaction who does not give a rat`s ass about the other parties but who is only conniving to maximize free shit, is not appropriate.  Local community currencies should thus be used as much as possible.

    The method of and the act of personal currency generation (whether formal as i suggest or informal such as I scratch your back you scratch mine) itself in part defines the work and is part of the work process.  We should not abandon things such as trust, personal responsibility and personal reputation to a bankster class to manage those things. Money pricing alone does not accommodate the real needs of transactions between people.   Good faith, reputation, previous good acts etc. are important and should be embodied in a currency system.  That is basically what I propose.

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  • Mon, Nov 02, 2020 - 4:08am

    Mots

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    `a centralized local database is probably good enough`

    Yes Dave, dont need blockchain (or the tremendous energy consumption incurred) for local currencies.  I always thought that hashgraph had some good features, assuming that the slightly lower security compared to bitcoin was acceptable.  Whatever happened to hashgraph?     Does anyone have information or insight into hashgraph?  I think that a tally stick type of hashgraph accounting would be particularly ideal for community currencies wherein the details of transactions are not very private but on the contrary, would make up much of the gossip and conversations between people, as being kind of public.

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  • Mon, Nov 02, 2020 - 12:37pm

    Mots

    Mots

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    public centralized databases work well for real estate and intangible property transfers

    Western law has evolved a public centralized database for the most important property transfers of all.  Your county courthouse records land transfers serially.  I have not read any serious issues regarding the use of that centralized database.  The cost of record searching could be eliminated with a good electronic improvement of that but I dont see the need for an energy expensive crypto to handle that.  Maybe it is the secrecy aspects of crypto that make them so god-awful energy consuming... ?

    Public centralized databases work well for intangible property buying and selling as well, as the US Patent Office has proven with the US patent registration/publication service, which is voluntary and extremely cheap to use.  Modern electronics has provided us many tools for registering commercial transfers that do not require obscene amounts of energy to implement.  But there is no free-shit! motivation to use them by 3rd parties who want free shit in return for not producing real wealth.  Lets focus on producing wealth.

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  • Tue, Nov 03, 2020 - 3:14am

    davefairtex

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    linux foundation open source blockchain frameworks

    Mots-

    You can have a cooperative-owned database which has fault tolerance/redundancy using a "permissioned" blockchain mechanism rather than the proof-of-work mechanism.

    "These are the servers we allow to create blocks on our network."  No need to have a competition proof-of-work, which would probably be overkill for your application.  But it would be public.  And would let you have 4 or 10 or 20 different copies, for safety.  What if your only server got hit by lightning?  Or "accidentally" set on fire by someone who was heavily in debt?  A single point of failure in a monetary system would seem to be a bad idea.

    I poked around a bit yesterday and saw a few Linux Foundation managed blockchain platforms which might qualify.   Here is one:

    https://www.hyperledger.org/

    Note: I haven't used it.  But open source is a requirement, at least to me.  You can look at the source and modify it yourself, if need be.  Bitcoin has this feature as well, of course.

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  • Fri, May 07, 2021 - 1:37pm

    Russellnop

    Russellnop

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    bitcoin is the future

    I believe bitcoin is the future that is happening right now. If this currency becomes a thing of the past, the experience we are gaining now will teach us a lot.

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