Bitcoin and Crypto Thread

[chance vought]

Where are you guys storing your crypto currency? I'm seeing no consensus at all on this and it's a huge deal. Some men have been reporting that thieves are hacking the wallets and making off with coins. Hot or cold wallet doesn't seem to matter. Access is being gained during transfer is what I gather. Some guys are just leaving their crypto on an exchange.

What are you guys doing to secure your crypto? Exchange, hot wallet, cold wallet? Recommendations? I've used the search. It seems scammers may be actually supplying the wallets.

It depends. I have hot wallets on my nodes so I can use the lightning network, I also use phone wallets and wallets built in to apps like Primal for convenience of sending and receiving small payments. Large amounts are best kept in cold storage.

Phones are very secure, and I’m comfortable with having a few months expenses on a phone wallet. Anything more goes to cold storage.

The best way to get a hardware wallet is direct from a reputable manufacturer like coinkite. They ship the wallets in a sealed, serialized bag that you cross check against the actual device. If you are more paranoid or have a lot, multi-sig custody using multiple hardware manufacturers and/or another third party custodian are also options. That way if one hardware device were compromised, it still can’t move your Bitcoin without a key from the second manufacturer’s device.

Coinkite ColdCard mk4 has 2 secure elements from different manufacturers, so it’s almost as good as having 2 different devices. It also has an almost endless feature set, including a self-destruct pin, setting a number of incorrect entry’s until it self deletes, creating decoy wallets…

 

[FrancisK]

Government currencies won't need to exist. They only existed to abstract gold because gold was not very transportable, divisible, or verifiable. Bitcoin does not need to be abstracted since it is already highly transportable, divisible, and verifiable.

Less people are going to accept an abstraction for payment when it is just as easy to get the real thing.

Also, if currencies continue to exist, they will simply be speculative attacked into oblivion. Borrow the depreciating currency, buy bitcoin, pay the loan with the depreciated currency, rinse and repeat until the easy money is dead. The last "carry trade" if you will. This will probably happen during the adoption phase of bitcoin, since it is appreciating so rapidly. The more fiat is borrowed to buy bitcoin, the more it depreciates, and the more relative strength goes into bitcoin (at the expense of those who hold the currency and its derivatives, like bonds.)

MSTR is conducting a speculative attack. Imagine more corporations doing the same - selling fiat debt into the bond market and buying bitcoin. Government debt becomes much more expensive, because they have to compete with much higher yielding bitcoin backed debt. Bond market liquidity flows into bitcoin and bitcoin becomes stronger, more valuable money, with an even broader financial network.

Your own words negate your point, currency only had value because it was backed by something tangible and whether it was right or wrong then it was backed by the strength and stability of the entity that created it. Your point hurts your own argument. Especially when you start talking about speculation....you can just switch the terms "currency" and "bitcoin" and say the same thing.

 

[Blade Runner]

because it was backed by something tangible

Would you say that BTC is (not) backed by anything tangible?

 

[FrancisK]

Which ironically makes it a worse currency as time goes on. It's time to think a little bit more about what's going on.

What's more? You give an abstraction as to why one should believe in something as money, or "backing". Worse than that, the abstraction actually doesn't really do anything for the money to retain its value. But we already know that, since all fiat goes to zero, don't we?

How is it worse with something backing it? I'm sorry that doesn't make any sense in the real world.

I was responding to you saying that bitcoin is currency just like usd is currency, that's just not a true statement today in the real world.

 

[FrancisK]

Would you say that BTC is (not) backed by anything tangible?

Why can't you quote and respond to the whole thing?

No it's not, its value is based completely on speculation. You're going to say the USD isn't either, I'm pretty sure the United States of America is something tangible and the USD didn't start that way anyway. You're entire argument is that currency is going to fail and bitcoin will take over, if currency fails then bitcoin becomes worthless right along with it. The entire concept makes no sense in the real world.

 

[chance vought]

Fiat is failing and Bitcoin is taking over. Yes that is what’s been happening for 15 years.

Do you have evidence to the contrary?

The most powerful computer network on earth, using more electricity than most countries.

ask yourself what money is, and how did it arise. Why did gold become money? What unique properties does it have?

 

[chance vought]

Strive Asset Management just issued a proposal for a Bitcoin bond ETF, that will buy bonds from MSTR and other Bitcoin companies issuing convertible notes!!!

 

[FrancisK]

Fiat is failing and Bitcoin is taking over. Yes that is what’s been happening for 15 years.

Do you have evidence to the contrary?

The most powerful computer network on earth, using more electricity than most countries.

ask yourself what money is, and how did it arise. Why did gold become money? What unique properties does it have?

Evidence of what brother? The real world? Sure I do...

If I owe you $500 I need to give you $500 worth of dollars, or maybe you take gold then I need to give you $500 dollars worth of gold, or maybe you take bitcoin well then I need to give you $500 DOLLARS worth of bitcoin or maybe you take human hair well then I'll give you $500 dollars worth of human hair.

Do you understand my point?

That's where all the fantasy world words on all the podcasts and blogs and YouTube bs become nothing but that....words.

You and I made a shit ton of money on a really dumb nonsensical lottery ticket because we were smart enough to bet on the stupidity of others, let's enjoy it. Bitcoin or any other crypto crap is absolutely nothing more than that.

 

[Blade Runner]

How is it worse with something backing it?

I'll explain my point there, since you didn't pick it up. The big power who can just print "money" is going to keep its same tactics to try to maintain its role, but over time it will get big, bloated, fat, selfish and used to debasing its currency, which it keeps thinking no one can go without - but also debasing it to oblivion. Which is what we see.

its value is based completely on speculation.

Energy and network are "speculation"? This is yet another example of people using a word and having no idea what it really means.

You're entire argument is that currency is going to fail and bitcoin will take over, if currency fails then bitcoin becomes worthless right along with it. The entire concept makes no sense in the real world.

That's not my argument there. The idea that USD, or any other fiat is "going to fail" is also incorrect - it's already failing, and big time.

People not using something that loses purchasing power, when they have other options, makes no sense in the real world?

Ideas like these are why I'm constantly baffled by this thread, topic, and people.

 

[FrancisK]

I'll explain my point there, since you didn't pick it up. The big power who can just print "money" is going to keep its same tactics to try to maintain its role, but over time it will get big, bloated, fat, selfish and used to debasing its currency, which it keeps thinking no one can go without - but also debasing it to oblivion. Which is what we see.

Energy and network are "speculation"? This is yet another example of people using a word and having no idea what it really means.

That's not my argument there. The idea that USD, or any other fiat is "going to fail" is also incorrect - it's already failing, and big time.

People not using something that loses purchasing power, when they have other options, makes no sense in the real world?

Ideas like these are why I'm constantly baffled by this thread, topic, and people.

Well happy you said it because we can absolutely agree there, I am also constantly baffled by this thread, topic and people.

 

[chance vought]

Evidence of what brother? The real world? Sure I do...

If I owe you $500 I need to give you $500 worth of dollars, or maybe you take gold then I need to give you $500 dollars worth of gold, or maybe you take bitcoin well then I need to give you $500 DOLLARS worth of bitcoin or maybe you take human hair well then I'll give you $500 dollars worth of human hair.

Do you understand my point?

That's where all the fantasy world words on all the podcasts and blogs and YouTube bs become nothing but that....words.

You and I made a shit ton of money on a really dumb nonsensical lottery ticket because we were smart enough to bet on the stupidity of others, let's enjoy it. Bitcoin or any other crypto crap is absolutely nothing more than that.

Unit of account. That is only one use case for money, and in fact the final stage of its adoption as money.

As an asset monetizes it starts gaining value first. Something with no value will not be accepted as a medium of exchange, and can’t be used as a unit of account.

Bitcoin is in phase 1 of monetizing: it is accruing value, becoming more valuable over time. Value from other assets, and currencies, are steadily flowing into it.

It is simultaneously used as a medium of exchange, though not as ubiquitous as the US dollar, it is more accepted, and more valuable than almost every other fiat currency on earth already - only the top 6 currencies hold more value - and all of those except for the dollar are not universally accepted outside of their own countries. Bitcoin has already defeated over 100 currencies in only 15 years, and it has only 6 more to go.

The last phase of a new asset becoming money is unit of account. Store of value > medium of exchange > unit of account.

When Bitcoin is more valuable and more universal than the US dollar, it will be the unit of account.

 

[BeatUpTruck]

Fiat is failing and Bitcoin is taking over. Yes that is what’s been happening for 15 years.

Do you have evidence to the contrary?

The most powerful computer network on earth, using more electricity than most countries.

ask yourself what money is, and how did it arise. Why did gold become money? What unique properties does it have?

Gonnna have to check you there.

Gold is an element you'll find on the periodic table that can be found in nature in its pure form. Thats not something to take lightly.
Gold is beautiful and was even more so in the days before man figured out how to make colorful things ourselves.
It doesn't rust, corrode or degrade. It is nearly indestructable. You can pick a piece of gold up from a 2000 year old shipwreck on the ocean floor, bring it to the surface and rub in on your shirt and it will shine like it did the day it sank.
Gold is one of the best conductors of electricity and heat on earth.
It is also incredibly malleable and can easily be formed into whatever you want - one ounce of gold can be pounded down into gold leaf so thin that it will cover 16 square meters! and will still hold together.
Gold is rare and rare plus sought after always equals valuable, and again - it was even more rare before man figured out more advanced ways to find it.

All of these things make Gold inherently unique. There is nothing else on earth like Gold. It became incredibly valuable before it became money.
Now please apologize to gold for the inexcusable slander.

 

[Australia Sucks]

The scale has tipped on the demand side. Cause governments do nothing. Central banks work on the demand side. There´s no price equilibrium. And never will be until government enact policies to reduce inflation through private economic agents. Because government is useless about almost everything. And those policies can only mean one thing:

- Repeal regulations, lower taxes and let the supply side work.

Also disbanding all central banks. And only have thousands of normal banks. Puff systemic risk gone. Communist scum. No agent by itself can manipulate the market. This is capitalism. Who cares about banks. They are groceries of money. A store selling potatos or money is the same. I think banking in UK could be a drawer. A drawer would be a bank in the past. All this shit about banks, this and banks that. They are potato sellers. Through regulation theyve limited the number of banks allowed to operate. And there comes the cartels and the control. And no competition.

People should buy banks. There´s 2M$ banks in US for sale. Like Elon did with twitter. At one point I thought a lot about buying a portion of a bank. I still do.

https://dealstream.com/

Magoo I think this argument comes down to definitions.

In classical economics (pre Keynes) inflation was defined to be an increase in the money supply. The Austrian school of economics uses this definition still to this day.

Mainstream/neo-keynesian economists use the current modern definition of inflation (which occured because they changed the definition to suit their agenda) which is defined as a general increase in the price level i.e. an increase in the CPI. The problems with this definition are various. Firstly its easy to manipulate the CPI through various means e.g. compositional changes, hedonic adjustments, etc. Secondly it attempts to obfuscate and ignore the root cause of the rising price levels which is the expansion of the money supply.

Under a classical hard money standard some prices will rise and others will fall and some years prices will rise and other years prices will fall but over time there will not be any any upwards trend in the general price level (at least not in a capitalist/market based economy). This is because the natural tendency of capitalism is deflationary.

 

[Australia Sucks]

But this is patently false. We are witnessing now countries moving away from the USD - what makes you think they could not just as easily move away from BTC?

In the long run capital flows to the best form of money. History has shown this. Governments can suppress this for a period of time but eventually it will happen. If you believe Bitcoin to be a superior form of money then over the long-term capital will flow out of fiat currencies into Bitcoin. It is inevitable. This is not just speculators saying Bitcoin is technically superior as a form of money. Fidelity wrote a paper explaining how Bitcoin overall has superior monetary properties to both fiat currencies and gold.

https://www.fidelitydigitalassets.com/sites/g/files/djuvja3256/files/acquiadam/1012662.6.0%20-%20FDAS%20Bitcoin%20First%20Revisited%20V1.pdf

 

[Australia Sucks]

Do you honestly believe - even assuming that Bitcoin became the world reserve currency - that fractional reserve banking would die out? I would call that incredibly naive. Fractional reserve banking is simply far too powerful and tempting for those in a position to utilize it to resist doing so. Even on a global Bitcoin standard, you would have banks lending out other currencies backed fractionally by Bitcoin. Men will not become saints overnight, human nature does not change, and you can't put the genie back in the bottle as far as fractional reserve banking goes.

There are certainly ways that Bitcoin could be transformed into a fractional reserve system but it will be far less fractionated than anything else ever was in history because the blockchain is highly transparent and Bitcoin is easily transferable so there is far less incentive for users of the Bitcoin ecosystem to accept a fractional reserve system then there is with fiat or gold.

Gold was not easy to transport or store hence why gold backed fiat currencies were created, and access to fiat can be controlled by governments and banks (capital controls, freezing of bank accounts, restrictions and reporting requirements for physical cash, etc). With Bitcoin users have more freedom and its going to be hard to push acceptance of a fractional reserve system onto Bitcoin users.

But yes it is certainly possible and will likely occur to some extent but the beauty of Bitcoin is that its easy to sidestep. Just like when the U.S.A. government devalued the U.S.A. dollar during the great depression (from $20 USD per ounce to $35 USD per ounce) it only affected those who held dollars not those who held actual physical gold. And the stuff about the government confiscating people's gold only actual only occurred in a handful of cases, it was not widespread.

Same as Bitcoin if they find ways to make a fractional reserve Bitcoin system only the people participating in the scam will be hurt. Those who actually own real Bitcoin on their own hard wallets will maintain their purchasing power.

 

[Australia Sucks]

It depends. I have hot wallets on my nodes so I can use the lightning network, I also use phone wallets and wallets built in to apps like Primal for convenience of sending and receiving small payments. Large amounts are best kept in cold storage.

Phones are very secure, and I’m comfortable with having a few months expenses on a phone wallet. Anything more goes to cold storage.

The best way to get a hardware wallet is direct from a reputable manufacturer like coinkite. They ship the wallets in a sealed, serialized bag that you cross check against the actual device. If you are more paranoid or have a lot, multi-sig custody using multiple hardware manufacturers and/or another third party custodian are also options. That way if one hardware device were compromised, it still can’t move your Bitcoin without a key from the second manufacturer’s device.

Coinkite ColdCard mk4 has 2 secure elements from different manufacturers, so it’s almost as good as having 2 different devices. It also has an almost endless feature set, including a self-destruct pin, setting a number of incorrect entry’s until it self deletes, creating decoy wallets…

You live in the U.S.A. if I am not mistaken, where currently (it could change in the future of course) purchasing items using Bitcoin is triggers a cpaital gains (or loss) taxable event so every time you go to buy something by paying in Bitcoin its creating a tax liability for you (not to mention complicating your taxes). If you live in El Salvador different story but in most countries for this reason paying for stuff using Bitcoin is a pain in the ass at this point in time.

 

[Australia Sucks]

Would you say that BTC is (not) backed by anything tangible?

You and I both know that Bitcoin maximalists would say that the "tangible" backing of Bitcoin is the computer network and the electricity usage spent to mine the Bitcoin etc.

The "tangible" backing of fiat it could be argued is the legal requirement to pay taxes and court ordered debts in the fiat currency of your country.

But yes its easy to argue that in both cases (bitcoin and fiat) those are not really "tangible" in the strict definition of the word and they are not tangible in the sense that a physical commodity based money is (gold coins, silver coins, bronze coins, heads of cattle, etc).

 

[magoo]

Magoo I think this argument comes down to definitions.

In classical economics (pre Keynes) inflation was defined to be an increase in the money supply. The Austrian school of economics uses this definition still to this day.

Mainstream/neo-keynesian economists use the current modern definition of inflation (which occured because they changed the definition to suit their agenda) which is defined as a general increase in the price level i.e. an increase in the CPI. The problems with this definition are various. Firstly its easy to manipulate the CPI through various means e.g. compositional changes, hedonic adjustments, etc. Secondly it attempts to obfuscate and ignore the root cause of the rising price levels which is the expansion of the money supply.

Under a classical hard money standard some prices will rise and others will fall and some years prices will rise and other years prices will fall but over time there will not be any any upwards trend in the general price level (at least not in a capitalist/market based economy). This is because the natural tendency of capitalism is deflationary.

The increase in money supply leads to an increase in prices. The word inflation comes from inflatio which means swelling.

The increase in the money supply (cause) leads to an increase of prices (effect).

Inflation is therefore an increase in money supply which leads to an overall increase in prices during a period of time.

Simply speaking there´s more money than goods. It leaves aside the event of less goods available. Only focusing on the demand side. Basically putting all the power on central banks.

This definition completely forgets the role of government regulation and taxes. And maybe on purpose cause governments love inflation. Inflation is good for variable incomes (profits, etc). And bad for fixed incomes (salaries).

There´s always a balance. Economically things more and less even out. With time.

 

[BeatUpTruck]

In the long run capital flows to the best form of money. History has shown this. Governments can suppress this for a period of time but eventually it will happen. If you believe Bitcoin to be a superior form of money then over the long-term capital will flow out of fiat currencies into Bitcoin. It is inevitable. This is not just speculators saying Bitcoin is technically superior as a form of money. Fidelity wrote a paper explaining how Bitcoin overall has superior monetary properties to both fiat currencies and gold.

https://www.fidelitydigitalassets.com/sites/g/files/djuvja3256/files/acquiadam/1012662.6.0%20-%20FDAS%20Bitcoin%20First%20Revisited%20V1.pdf

View attachment 15800

It’s a good chart but they left out a few of golds pluses. Off the top of my head … gold is the only form of money that can also be used as a weapon. You can put three coins in a sock and bludgeon your enemies.
Also bitcoin has gold envy and that’s a big minus. We might as well call it trans gold. I just coined that phrase. Badum tiss … I’ll be here all week

 

[Australia Sucks]

Simply speaking there´s more money than goods. It leaves aside the event of less goods available. Only focusing on the demand side. Basically putting all the power on central banks.

This definition completely forgets the role of government regulation and taxes. And maybe on purpose cause governments love inflation. Inflation is good for variable incomes (profits, etc). And bad for fixed incomes (salaries).

Of course regulation and taxes have an effect on the overall price level and the supply and demand for goods and services. Nobody is denying this.

But over time the dominant factor causing prices to continually rise has been proven to be the expansion of the money supply. It is an order of magnitude more important than anything else. You can see this that on the classical gold standard overall price level did not rise over time despite various tariffs, taxes, regulations, etc. This is because the capitalist system has a natural tendency to produce more goods and services over time. This in general tends to overwhelm the impact of tariffs, regulations etc in the long run, but money supply expansion is so powerful that capitalism cannot overcome it.

And yes governments do love inflation because it allows them to inflate their debts away.