Bitcoin, real or fake commodity?

Discussion in 'Finance, Investing & Economy' started by feyenoordsoccerfan, Jan 8, 2021.

  1. [​IMG]
    Today Bitcoin went over the 40,000 treshold.
    Some call it a fake investment, akin to Ponzi schemes. Others call it the liberation from political manipulation of currencies.

    So what is the truth?
  2. Bitcoins, according to wiki, is the result of solving a complex mathematical problem.
    Each new bitcoin is harder to find.
    Some compare it to finding new prime numbers.
    Each bitcoin discovered by solving the mathematical problem is unique, just like a prime number is.
    The process of how to find a bitcoin is published and open for scruteny by the brightest mathematicians.
    So if it's a fake, is there scientific proof of that?
  3. Bitcoin dropped to $30,468 and back to $36,633.
  4. Some call it a pyramid scheme or a Ponzi scheme.
    It isnot.
    These two are scams in that new money is pulled in (without real assets/investments against it) and paid out to early investors as a return. So basically one buys air. Once no new money comes in, the last who entered lose all their money.

    So it is obvious the bitcoin isnot one of those two. There's no new money being brought in by investors to pay old investors a return.
    The only way an old investor can make money is by selling his bitcoins. He's not getting a constant revenue while the "scam" runs.

    Bitcoin investments however can be regarded a bubble, by inflating the value of the limited number of bitcoins.

    Bitcoins are real. The only question is what is their value.
  5. So the bitcoin can be in a bubble stage.
    Is there a way to determine that?
    There are statistical ways to find out how far a value has gone beyond the standard deviation of the bitcoin value.
    One of them is the

    To make the judgement one needs:

    1st. the current market value of the bitcoin and multiply it with the number of bitcoins in existance.

    2nd. the total value of transactions completed. It's the adding of all prices paid when a bitcoin was "moved".

    3d. the Z-score. This is the number of standard deviations an observed value is above or below the mean value of the bitcoin.

    Is it a correct/useful way to determine where one is regarding the value of the bitcoin?

  6. Another danger of bitcoins is losing your digital keys.
    Lost passwords lock millionaires out of their Bitcoin fortunes
    By Nathaniel Popper
    The New York Times |
    Jan 14, 2021 at 11:44 AM

    Stefan Thomas, a German-born programmer living in San Francisco, has two guesses left to figure out a password that is worth, as of this week, about $220 million.

    The password will let him unlock a small hard drive, known as an IronKey, which contains the private keys to a digital wallet that holds 7,002 bitcoins. While the price of Bitcoin dropped sharply on Monday, it is still up more than 50% from just a month ago when it passed its previous all-time high of around $20,000.

  7. TheWincert

    TheWincert New Member

    Jan 25, 2021
    I think after all this time, no one will have any questions about whether it is true or not.
  8. felloveranddidanadu

    Plymouth Argyle FC
    Dec 12, 2009
    San Jose Frogs
    Nat'l Team:
    United States
    Have recently gotten very interested in crypto and blockchain technology and I'd posit that blockchains are absolutely not a scam and will eat up everything it can -- commerce, voting, insurance, etc, etc. Blockchains provide trustlessness which is a hugely important concept. Bitcoin *is* a scam however, but in the same way gold is a scam. Neither provide any real benefit other than their perceived and shared value.

    When we all share the same view of the same ledger and that ledger is replicated ad naseum to me and you and everyone we know (and don't know), you cannot say that our ledger is wrong. You cannot say that your ledger is right. You can only say that the ledger is right. I don't need to trust you, you don't need to trust me, we don't need to trust Chase or Visa or whomever to know that we're looking at and talking about the same time. There is a record of $10 leaving your account and that self same $10 entering my account. There is not place for it to get lost along the way.

    The only thing that gives Bitcoin any value is its shared trust as a store of value, which isn't really any different than what we have with fiat currency. But Bitcoin is really just the first, and it finite by design, and holds a lot of market value, but if tomorrow everyone holding Bitcoin decided Nitcoin is the new hot thing, your Bitcoin will go down and your Nitcoin will go up.

    I think future state will be some hybrid of globally recognized crypto currencies, each with a different flavor (this is used for file storage, this is used for real estate) with maybe an abstraction on top that would unify them all (my FooCoin can be used as FileCoin or PropertyCoin for example).

    The strength and weakness of Bitcoin is that it only represents Bitcoin, which is the first to really nail the concept of "bitcoin (small 'b') as digital gold with a shared ledger". I think being first is its real value proposition and the concepts it introduced (shared ledger, multi-layering, cryptographic proofing) is being improved upon by subsequent people and ideas.
    SF19 repped this.
  9. Yeah, should have made the thread title:
    Bitcoin and other crypto coins, real or fake commodity?
  10. felloveranddidanadu

    Plymouth Argyle FC
    Dec 12, 2009
    San Jose Frogs
    Nat'l Team:
    United States
    Well in the same way that I think it was Microsoft that coined "software is eating the world", you could probably say soon that "blockchains are eating software". Advances in distributed and decentralized computing coupled with advances in cryptography, as well as more sophisticated (or at least coordinated, on a nation-state level) attacks on "traditional" technology means a more secure, consensus driven internet.

    Crypto coins are given out either via proof or work or proof of stake, so in many ways they behave exactly like fiat currency...
  11. felloveranddidanadu

    Plymouth Argyle FC
    Dec 12, 2009
    San Jose Frogs
    Nat'l Team:
    United States
  12. By the way, we're on the brink of total control of our lives by governments.
    Central Banks for years now have been working on what is called
    Central Bank Digital Currency.
    At the moment an individual with a bank account with over 100k €€ is charged a negative interest by the bank.
    You can escape that by taking your money out of the account and tug it away under your matrass.
    This becomes impossible when the CBDC are becoming reality.
    Where ever your digital money is, in an account or in your electronic/digital wallet, the CB can apply their negative interest rates straight on you.
    No need anymore to do it via the bank.
  13. upload_2021-5-26_0-57-40.png
    In these countries bitcoins are accepted as currencies.
  14. Countries Where Cryptocurrency is Legal (2020)
    by Ankur Gupta · March 24, 2020

    Cryptocurrency, or digital money as we know it first came into limelight with the launch of Bitcoins in 2009. Bitcoin was the first cryptocurrency that was recognized globally and made crypto exchanges and transactions available for traders and investors worldwide.

    Today, we are all familiar with cryptocurrencies and with the advent of technologies and the growing popularity of blockchain, we know how cryptocurrency works. But cryptocurrency is an unregulated decentralized market that does not come under the jurisdiction of any centralized authority. This is why cryptocurrencies are not legalized in many countries as a payment platform across the globe.

    Countries Where Cryptocurrency is Legal
    Not all countries support cryptocurrencies. So, if you are planning to invest in cryptocurrencies, here is a list of countries that have made cryptocurrency legal.

    Fortunately, 2020 has been favorable for India in the matters of cryptocurrency. On March 4, 2020, the Supreme Court has made cryptocurrency legal and has uplifted the ban on cryptocurrency transactions throughout the nation.

    Earlier, the RBI had imposed a legal ban on cryptocurrency transactions on all banks in the country. Investors were not allowed to transact, pay, or transfer digital money using the banking system in India. The decision of 4th March 2020, comes as good news for crypto investors across the nation. Now that crypto transactions have been made legal, there is no doubt that cryptocurrency business will flourish rapidly in India. Cryptocurrency is not a legal tender but trading with crypto is not illegal in India.

    United States
    In the United States, the digital currency has been operating in the market since 2013 and is used in many online portals as a standard payment tool. Here the crypto exchange platforms have to obtain a legal license to operate in the market. The CFTC and IRS have recognized cryptocurrency as a valuable commodity and has levied income tax and capital gain tax on it since September 2015.

    United Kingdom (UK)
    In the United Kingdom, cryptocurrency is considered a private investment and is subject to GST and VAT. Though digital currencies are legal in the UK, it is done under the jurisdiction of FCA and is taxed under capital gains.

    It is legal to trade cryptos in Canada, but some banks have banned the digital currency. It is considered as a security and is taxed as a digital asset. All companies trading cryptocurrencies need to report the same to Fintrac. Many banks don’t allow crypto transactions through credit or debit cards in Canada.

    Crypto trading is legal in Australia. However, all crypto exchanges are regulated under the AUStrac. There is no GST or VAT imposed on cryptocurrencies in Australia, but it is taxed under capital gains. Crypto is unofficially considered as a legal tender across Australia.

    Singapore in April 2019 the Monetary Authority of Singapore or MAS has recognized bitcoin as a legal digital payment option under the Payment Services Act. Companies trading with cryptos has to pay a GST and all transactions are regulated by MAS.

    Hong Kong
    In the year 2014, bitcoins and other cryptocurrencies were presented by the honorable Financial Secretary of Hong Kong under the Organized and Serious Crime Ordinance. So, bitcoin traders are always under strict vigilance and it is not considered legal in Hong Kong.

    In 2014, Japan has made bitcoin trading legal in the country. Cryptocurrencies are considered as private property and a legal tender and are taxed under capital gains. The crypto trading is legalized and is regulated by FSA or Japan’s Financial Services Agency.

    South Korea
    Only South Korean residents can trade in cryptocurrency in the country. They cannot trade with any other crypto exchange outside the country. The banks regulate the crypto trading and look after the privacy and authenticity of such trades. All crypto exchanges are regulated under the FSS or Financial Supervisory Service of South Korea.

    Despite the numerous efforts to make cryptocurrencies legal in China, it has failed to achieve its goal and crypto exchanges and trade are still not legal in the country. Trading crypto is a risky event and requires experience and knowledge of crypto updates in the market.

    Cryptocurrencies are not recognized as legal tender in Germany and are taxed under capital gains and VAT in the country. Certain states of Germany, however, require cryptocurrency companies to register under BaFin the Financial Supervisory Authority of Germany.

    Turkey is a financial hub and is always open to new financial opportunities and innovations. Bitcoin trading is legal here and recently the country has also hosted crypto meetings and blockchain conferences to leverage the digital business.

    In 2017, the Central Bank of Brazil has legalized cryptocurrencies in the country.
  15. felloveranddidanadu

    Plymouth Argyle FC
    Dec 12, 2009
    San Jose Frogs
    Nat'l Team:
    United States
    A centralized decentralized currency is simply a currency. Troubling but not unexpected news. Any country that outlaws cryptocurrencies (and thus the people who contribute toward it and thus the engineers who build blockchains) will get left behind. It would be the technological equivalent of shooting yourself in the foot.
  16. The Managing Director of the Dutch Central Planning Agency CBP calls for a ban on cryptos in the Netherlands.
    Good luck to you.

    Bitcoin moet verboden worden, vindt de baas van het Centraal Planbureau.

    Elders in de wereld lijkt de digitale munt juist meer omarmd te worden.

    Dirk Waterval11 juni 2021, 12:51
    Komt er een dag dat de bitcoin zich een wereldwijd breed geaccepteerde betaalmunt mag noemen? Dat de cryptomunt zo aan terrein heeft gewonnen dat het ‘gewone’ geld van de centrale banken, de euro’s en de dollars, achterhaald zijn en treurig achterblijven? In één week deed de digitale valuta zowel meerdere stappen vóór- als achteruit op die weg naar salonfähigheid. Om de week af te sluiten met een gepeperd essay van Pieter Hasekamp, directeur van het Centraal Planbureau.

    De baas van een van de belangrijkste adviesorganen van de regering kan er kort over zijn: bitcoin gaat niet het nieuwe geld worden waarmee de burger van de toekomst zijn boodschappen afrekent. Sterker, hij pleit ervoor het gebruik en de handel in bitcoins direct te verbieden in Nederland. Hasekamp noemt ‘de cryptohype’ een zeepbel die onvermijdelijk gaat knappen. Dus kun je het gebruik ervan beter zo snel mogelijk aan banden leggen, redeneert hij in zijn betoog in het Financieele Dagblad. Voordat mensen nog meer geld verliezen.

    Bitcoin should be banned, says the boss of the Central Planning Bureau. Elsewhere in the world, the digital currency seems to be more embraced.
    Dirk Waterfall11 June 2021, 12:51 PM

    Will there come a day when bitcoin can call itself a globally widely accepted payment currency? That the crypto currency has gained so much ground that the 'ordinary' money of the central banks, the euros and dollars, are obsolete and sadly left behind? In one week, the digital currency took several steps forward and backward on that road to salience. To end the week with a spicy essay by Pieter Hasekamp, director of the Central Planning Bureau. The boss of one of the government's most important advisory bodies can be brief: bitcoin is not going to be the new money with which the citizen of the future will pay for his groceries. In fact, he argues in favor of a direct ban on the use and trade in bitcoins in the Netherlands. Hasekamp calls 'the crypto hype' a bubble that will inevitably burst. So it is better to limit its use as soon as possible, he reasons in his argument in the Financieele Dagblad. Before people lose any more money.
  17. #25 feyenoordsoccerfan, Aug 30, 2021
    Last edited: Aug 30, 2021
    IMF warns countries against crypto as national tenders.

    IMF warns against adopting crypto assets as national currency
    Godfrey George
    1 August 2021
    The International Monetary Fund has warned against plans by some countries to adopt crypto asets such as bitcoin and ethereum as legal tenders.

    This was contained in a post titled, “Crypto Assets as National Currency? A Step Too Far” by the Financial Counselor and Director, IMF’s Monetary and Capital Markets Department, Tobias Adrian, and the General Counsel and Director of the IMF’s Legal Department, Rhoda Weeks-Brown.

    The fund said it did not see crypto assets or currencies catching on as national currencies, pointing numerous risks and adverse effects involved if such happened.

    The post read in part, “Bitcoin and its peers have mostly remained on the fringes of finance and payments, yet some countries are actively considering granting crypto assets legal tender status, and even making these a second (or potentially only) national currency.

    “If a crypto asset were granted legal tender status, it would have to be accepted by creditors in payment of monetary obligations, including taxes, similar to notes and coins (currency) issued by the central bank.

    “Countries can even go further by passing laws to encourage the use of crypto assets as a national currency, that is, as an official monetary unit (in which monetary obligations can be expressed), and a mandatory means of payment for everyday purchases.

    “Crypto assets are unlikely to catch on in countries with stable inflation and exchange rates, and credible institutions.


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