Discussion: The asymetric risk/reward of Bitcoin
- DevanTracy
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Discussion: The asymetric risk/reward of Bitcoin
Hello fellow K440 expats, alcoholics and wives of social workers
Have any of you bar-stool philosophers taken a look at investing into Bitcoin long term?
The risk/reward for this asset outperforms any other traditional asset on the market today.
Now that corona is in full effect, and the bars are shut, can one of you lot let me know if I am looking at a complete scam here?
What do you fellas think?
Dev
Have any of you bar-stool philosophers taken a look at investing into Bitcoin long term?
The risk/reward for this asset outperforms any other traditional asset on the market today.
Now that corona is in full effect, and the bars are shut, can one of you lot let me know if I am looking at a complete scam here?
What do you fellas think?
Dev
I would rather invest in a Chinese casino in sihanoukville than buying bitcoins
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- OneTrickPony
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I don't know anything else you can throw a grand or two at that may be worth 200 grand in the future. Except perhaps gold..
Up the workers!
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- MerkinMaker
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There are two future scenarios.
1. In the future blockchain technology becomes the integral part of all exchanges of value.
2. 1 doesn't happen.
If 1 happens, then it is highly likely that Bitcoin will become the worlds defacto reserve currency. In such a scenario there will be hundreds if not thousands of domain specific blockchain stacks with their own coins, but Bitcoin will be the reserve. And as its supply is finite, then all projections suggest that in such a scenario price of Bitcoin will easily be above $1,000,000.
I follow this technology closely (not the speculation, the technology) and in my opinion, scenario 1 will happen. There are lots of forces trying to prevent it happening, but like the internet, it can't be stopped without going full China or 1984.
1. In the future blockchain technology becomes the integral part of all exchanges of value.
2. 1 doesn't happen.
If 1 happens, then it is highly likely that Bitcoin will become the worlds defacto reserve currency. In such a scenario there will be hundreds if not thousands of domain specific blockchain stacks with their own coins, but Bitcoin will be the reserve. And as its supply is finite, then all projections suggest that in such a scenario price of Bitcoin will easily be above $1,000,000.
I follow this technology closely (not the speculation, the technology) and in my opinion, scenario 1 will happen. There are lots of forces trying to prevent it happening, but like the internet, it can't be stopped without going full China or 1984.
You have to separate Bitcoin technology from Bitcoin currency. Bitcoin was first to implement blockchain technology but it is not exclusively using it.starkmonster wrote: ↑Tue Apr 14, 2020 10:19 amIn the future blockchain technology becomes the integral part of all exchanges of value.
Ethereum and other crypto currencies use blockchain technology. Many banks have implemented blockchain technology without the use of crypto coins.
The use of blockchain technology does not depend on crypto coins, and it does not depend on Bitcoin.
Bitcoin has a negative connotation to it. It is used for drug dealing and ransomware. It’s the currency of organized crimes.
The value of Bitcoin fluctuates because of speculation, but 12 years after its invention there is barely any legitimate use for it. I can’t buy a coffee with Bitcoin. I can, from some small Bitcoin fanatic vendors, but nobody actually does.
It takes for ever to verify a Bitcoin transaction. I don’t have 20 minutes to wait for a vendor to verify that my payment has been made. It’s not practical for large scale use. It is too complicated for the general population to understand.
For the average schmuck there is no benefit over paying a dollar. The dollar doesn’t need to be stored in some cryptic file that nobody knows how to secure. It’s in your pocket, you hand it over and end of transaction.
The few legit use cases there are for Bitcoin, you don’t need Bitcoin for.
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- spitthedog
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Exactly.Alexandra wrote: ↑Tue Apr 14, 2020 1:32 pmYou have to separate Bitcoin technology from Bitcoin currency. Bitcoin was first to implement blockchain technology but it is not exclusively using it.starkmonster wrote: ↑Tue Apr 14, 2020 10:19 amIn the future blockchain technology becomes the integral part of all exchanges of value.
Ethereum and other crypto currencies use blockchain technology. Many banks have implemented blockchain technology without the use of crypto coins.
The use of blockchain technology does not depend on crypto coins, and it does not depend on Bitcoin.
Bitcoin has a negative connotation to it. It is used for drug dealing and ransomware. It’s the currency of organized crimes.
The value of Bitcoin fluctuates because of speculation, but 12 years after its invention there is barely any legitimate use for it. I can’t buy a coffee with Bitcoin. I can, from some small Bitcoin fanatic vendors, but nobody actually does.
It takes for ever to verify a Bitcoin transaction. I don’t have 20 minutes to wait for a vendor to verify that my payment has been made. It’s not practical for large scale use. It is too complicated for the general population to understand.
For the average schmuck there is no benefit over paying a dollar. The dollar doesn’t need to be stored in some cryptic file that nobody knows how to secure. It’s in your pocket, you hand it over and end of transaction.
The few legit use cases there are for Bitcoin, you don’t need Bitcoin for.
Bitcoin is already here, it's called a credit card.
Paypal would have taken off long ago if Bitcoin was the future.
I reckon Bitcoin is largely used to launder money, hence the convenient, no one understands it.
Huge spreads just confirm the lack of volume.
"I don't care what the people are thinking, i ain't drunk i'm just drinking"
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- MerkinMaker
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I don't think you read my post carefully, that's exactly what I said. If blockchain technology (i.e. distributed ledger technologies and their protocols) comes to dominate the exchange of value in the same way the internet (also just a decentralised set of communication protocols) then Bitcoin is well positioned to become the reserve currency (store of value) of that new financial ecosystem.Alexandra wrote: ↑Tue Apr 14, 2020 1:32 pmYou have to separate Bitcoin technology from Bitcoin currency. Bitcoin was first to implement blockchain technology but it is not exclusively using it.
Ethereum and other crypto currencies use blockchain technology. Many banks have implemented blockchain technology without the use of crypto coins.
It's limitations (cost/speed of transaction), simplicity (lack of smart contracts) and finite supply are actually desirable features for that use case. The bitcoin protocol won't be the one that sidelines Visa/Mastercard or Swift, I think that will be a slow drawn out death from a thousand cuts coming from countless niche protocols, each excelling in their own narrow vertical.
As was the case with the internet, the existing giants of the financial world won't fall from any single head on attack, it will be a completely new paradigm, they will invest all their energies protecting their existing monopolies, that by the time they decide it's time to pivot and fully embrace the technology, they will already be in the rear view of the fast moving startups that will emerge in the space and the idea of them catching up will be a joke.
Bitcoin as a store of value protocol already has enough of a head start, and a big enough lead in terms of market cap that its position as something similar to that of gold back when the major currencies were still on the gold standard is highly likely IMO.
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- MerkinMaker
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Also not to be rude to those new to this technology. But saying something like "I can't see bitcoin replacing the credit card", is the equivalent of in 1990 saying "I can't see this HTTP replacing the newspaper or MTV".
These distributed ledger technologies are the protocol layer, they are the foundation that disruptive companies will be built on top of.
The real question is who (and what) will grow from this technological foundation to become the Google, Facebook, Amazon (internet of information) in this new internet of value.
These distributed ledger technologies are the protocol layer, they are the foundation that disruptive companies will be built on top of.
The real question is who (and what) will grow from this technological foundation to become the Google, Facebook, Amazon (internet of information) in this new internet of value.
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- MerkinMaker
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Also, last point and then I will go away.
This isn't just about blockchain, it's about a technology convergence, where several complimentary technologies begin gaining traction at the same time.
The internet wasn't just about the Tim Berners-Lee inventing HTTP. It was a convergence of technologies: home computing, global networking, HTTP.
There is a new convergence happening today, right here, right now. That convergence is: distributed ledger technology, machine learning (AI, if you will), 5G (think number of internet enabled devices per person rather than speed), the internet of things (everything being connected) and simless internet connection (ease of device connection).
The bottom line is that in the not to distant future, EVERYTHING will be connected to the internet, and under the hood these devices will generate their value from a decentralised ecosystem of big data, being processed by decentralised "AI" systems and integrating together in an endless number of ways (mashups). Distributed ledger technology be the value exchange/trust mechanism behind all of these moving parts and value exchanges.
I was at a blockchain conference in London last year and the head of research at HM Land Registry gave a demo (proof of concept) of a complete house sale with all legal steps (contracts, home survey, deeds registry, mortgage closure and transfer, the entire chain of events) powered by blockchain smart contracts, you could trigger the chain of events by both parties fingerprinting the agreement on their mobile device from separate locations. No physical middlemen: lawyers, escrow accounts, paper contracts, bank managers, insurance brokers, nothing. It was mind blowing.
This technology is going to completely disrupt every business or role that exists only as a trusted intermediary between two untrusted parties, and if you think about it, that's probably more than 75% of the economy. All of them need to prepare to be commoditised in the very near future.
This isn't just about blockchain, it's about a technology convergence, where several complimentary technologies begin gaining traction at the same time.
The internet wasn't just about the Tim Berners-Lee inventing HTTP. It was a convergence of technologies: home computing, global networking, HTTP.
There is a new convergence happening today, right here, right now. That convergence is: distributed ledger technology, machine learning (AI, if you will), 5G (think number of internet enabled devices per person rather than speed), the internet of things (everything being connected) and simless internet connection (ease of device connection).
The bottom line is that in the not to distant future, EVERYTHING will be connected to the internet, and under the hood these devices will generate their value from a decentralised ecosystem of big data, being processed by decentralised "AI" systems and integrating together in an endless number of ways (mashups). Distributed ledger technology be the value exchange/trust mechanism behind all of these moving parts and value exchanges.
I was at a blockchain conference in London last year and the head of research at HM Land Registry gave a demo (proof of concept) of a complete house sale with all legal steps (contracts, home survey, deeds registry, mortgage closure and transfer, the entire chain of events) powered by blockchain smart contracts, you could trigger the chain of events by both parties fingerprinting the agreement on their mobile device from separate locations. No physical middlemen: lawyers, escrow accounts, paper contracts, bank managers, insurance brokers, nothing. It was mind blowing.
This technology is going to completely disrupt every business or role that exists only as a trusted intermediary between two untrusted parties, and if you think about it, that's probably more than 75% of the economy. All of them need to prepare to be commoditised in the very near future.
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How about this prediction: ""I can't see bitcoin replacing the credit card in the next 10 years." ?starkmonster wrote: ↑Tue Apr 14, 2020 5:26 pmAlso not to be rude to those new to this technology. But saying something like "I can't see bitcoin replacing the credit card", is the equivalent of in 1990 saying "I can't see this HTTP replacing the newspaper or MTV".
How can something that is such a bitch to withdraw & use and you can lose so easily revolutionize the world?
Bitcoin currently is for gamblers/speculators, conspiracy theorists & criminals.
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- MerkinMaker
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Bitcoin will never replace credit cards, and no one is predicting it will (no one worth listening to), what's coming is not a new iteration on our existing payment system, or as Henry Ford said, what's coming next isn't going to be a faster horse.mrdome wrote: ↑Tue Apr 14, 2020 6:08 pmHow about this prediction: ""I can't see bitcoin replacing the credit card in the next 10 years." ?
How can something that is such a bitch to withdraw & use and you can lose so easily revolutionize the world?
Bitcoin currently is for gamblers/speculators, conspiracy theorists & criminals.
Credit cards will still be with us, just as the horse is still with us, it will just be legacy technology only used in niche verticals.
If you are going to invest in Bitcoin, don't do it because you think it's going to be a last mile point of sale technology because it won't be. Invest for the use case outlined above ^
The hardest part about a paradigm shift isn't the technology, it's behaviour change. But that's already happened in the younger generations, they don't use cards for anything, they use contactless via their mobile devices. A bit like many of our parents wouldn't use a card or ATM at first and wanted to stick to cash.
There's so many aspects to blockchain tech and point of sale is probably the least interesting, but let's look at it anyway.
Now let me give you two different scenario's and you tell me, from a market forces perspective which one will win out?
So both scenarios start in the same way. Seller enters sale amount on terminal, buyer agrees, taps phone on terminal, phone asks permission to authorise the debit, buyer gives permission. The difference is in what happens next:
Scenario 1: terminal connects to Visa via the internet, Visa connects to buyers bank to request funds, buyers bank releases funds, seller get payment accepted notification, Visa transfers funds to buyers merchant account, merchant account holds funds for specific amount of time, then releases funds to sellers bank account. Visa takes 3% fee, merchant bank charges fixed sum, say 10c.
Scenario 2: funds transfer directly from the buyers phone to the sellers digital wallet on the terminal. No card processor (Visa/Mastercard), no internet, no seller bank, no merchant bank, no buyer bank. NO FEES, NO RENT SEEKERS, NO MIDDLEMEN.
This technology exists today, right now. The only thing we are waiting for is people's behaviour and the regulatory environment to catch up.
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- spitthedog
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The lack of volume and high spreads in Bitcoin, suggests that there's not much in the way of smart money involved.
CNBC did an article, where it was claimed that most of the volume in Bitcoin is actually fake. "Wash trading", just one trade being made over and over again.
CNBC did an article, where it was claimed that most of the volume in Bitcoin is actually fake. "Wash trading", just one trade being made over and over again.
"I don't care what the people are thinking, i ain't drunk i'm just drinking"
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- MerkinMaker
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The beauty of distributed ledger technology is that if you wanted to check that claim for yourself, you can install a Bitcoin node (the ledger) on your computer and see every transaction that ever happened.spitthedog wrote: ↑Tue Apr 14, 2020 9:31 pmThe lack of volume and high spreads in Bitcoin, suggests that there's not much in the way of smart money involved.
CNBC did an article, where it was claimed that most of the volume in Bitcoin is actually fake. "Wash trading", just one trade being made over and over again.
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