Cryptocurrency

[JustAnotherTimeline]

Okay. I guess this is a difference in opinion again then. I don't think articles like that are meaningful in any way unless we are looking to confirm our biases. I'm not particularly interested in blog posts. Give me at least some data and not feelings, when it comes to investments, I literally don't care why people are investing in something, merely that they are.

I've had multi-hour conversations with my crypto believing friends. I think perhaps the author of the article may have turned off his friends by being incredibly arrogant about his position. Most of the time I don't want to have conversations with people in that position either.

Regarding data and bitcoin as an investment. I am most compelled by the network effect and S curve adoption of Bitcoin when compared to the internet. There is nothing more fundamentally bullish to bitcoin price then the network effect.

I pull on chain data regularly for transactions, hash rate, addresses, etc. All the network does is grow.

What will stop it? What is the bear case?

 

[Fitzy]

Is it? I admit, I haven't done research to be able to quote exact figures, but I would be hard pressed to believe that any of the technologies or services mentioned in the article other than Bitcoin and Ethereum (used as a commodity investment, not used as a smart contact) have a combined 5% market share in their respective areas of business relative to traditional methods. It seems pretty objective to say that all these services are far from mainstream. I also think it's fairly objective to say there's no clear path for any of these things to become mainstream. None of the articles in this thread have ever laid out a path. Doesn't mean it won't happen but there's no clear reason out there for why it should.

Betamax might have been technically superior to VHS but it never gained widespread adoption. So, sure, it had a use case. But that's not what people are talking about - they're also talking about whether it is better enough to be used instead of the alternative.

The subjective part on my end is that I don't think they will ever become mainstream. The subjective part for people like Mark Andreeson is that they believe it's so inevitable that they can't see the real situation and interpret everything as if it's more confirmation they're right even if it doesn't make sense.

It's not a perfect comparison by any means, but a reason I think people would use crypto (say, loans via smart contract, for a specific case) is similar to why people would buy local vs. national.

There are certain folks who use their money to support small businesses vs. national corporations simply because of their own personal preference. It may not make sense to spend $20 on something from a local business when you could spend $15 and get a similar product from Amazon, but people feel the need/desire to spend their money in a way that it helps someone in their community. It aligns with their core beliefs.

The way I'm relating this to crypto is that there is a minority of people out there who would be willing to get a loan via a decentralized smart contract just because they don't like banks or "the establishment." It may be faster and safer to go the traditional route (just like it would be less expensive to buy through Amazon in my "buy local" scenario"), but there's a minority of people who distrust or dislike the centralized approach. In this way, a use case aligns with their core beliefs.

My subjective view is that as the public becomes more informed about crypto, and a lot of the scams in the space fall away while the cream rises to the top, there's still an untapped portion of the population that will see why a decentralized approach has appeal vs. the traditional route. It may not ever be the majority or close to it, but that doesn't mean there still isn't room for quite a bit of adoption.

Really, most of the arguments that have been hashed and re-hashed in this thread boil down to whether someone is fine with the traditional system or not. I think both ways will exist in the future, but I believe one's adoption has much more growth potential than the other.

 

[JustAnotherTimeline]

It's not a perfect comparison by any means, but a reason I think people would use crypto (say, loans via smart contract, for a specific case) is similar to why people would buy local vs. national.

There are certain folks who use their money to support small businesses vs. national corporations simply because of their own personal preference. It may not make sense to spend $20 on something from a local business when you could spend $15 and get a similar product from Amazon, but people feel the need/desire to spend their money in a way that it helps someone in their community. It aligns with their core beliefs.

The way I'm relating this to crypto is that there is a minority of people out there who would be willing to get a loan via a decentralized smart contract just because they don't like banks or "the establishment." It may be faster and safer to go the traditional route (just like it would be less expensive to buy through Amazon in my "buy local" scenario"), but there's a minority of people who distrust or dislike the centralized approach. In this way, a use case aligns with their core beliefs.

My subjective view is that as the public becomes more informed about crypto, and a lot of the scams in the space fall away while the cream rises to the top, there's still an untapped portion of the population that will see why a decentralized approach has appeal vs. the traditional route. It may not ever be the majority or close to it, but that doesn't mean there still isn't room for quite a bit of adoption.

Really, most of the arguments that have been hashed and re-hashed in this thread boil down to whether someone is fine with the traditional system or not. I think both ways will exist in the future, but I believe one's adoption has much more growth potential than the other.

Bingo.

 

[JustAnotherTimeline]

I think crypto will change the world and this year. I just think 99% of the crypto narrative is completely wrong and almost all of it effectively goes to zero. Most will get reckt. Probably me too.

You think the whole ship is sinking, don't you? Aint just crypto.

 

[BryceC]

Regarding data and bitcoin as an investment. I am most compelled by the network effect and S curve adoption of Bitcoin when compared to the internet. There is nothing more fundamentally bullish to bitcoin price then the network effect.

I pull on chain data regularly for transactions, hash rate, addresses, etc. All the network does is grow.

What will stop it? What is the bear case?

Bear case - Most people are using crypto as an investment and not for their myriad other purposes. If the overall market continues a downturn people tend to flee their riskier investments first. Several other crypto projects crash to zero and it continues to damage the public confidence. Bitcoin does actually become kind of a digital gold, which is something that is fairly price stable. That may not sound bearish, but in the context of people investing in it, isn't particularly meaningful.

For the record I think Bitcoin is never going to be zero. There is a market there. I also don't think it's going to a million on any timeline that would meaningfully effect me.

 

[BryceC]

It's not a perfect comparison by any means, but a reason I think people would use crypto (say, loans via smart contract, for a specific case) is similar to why people would buy local vs. national.

There are certain folks who use their money to support small businesses vs. national corporations simply because of their own personal preference. It may not make sense to spend $20 on something from a local business when you could spend $15 and get a similar product from Amazon, but people feel the need/desire to spend their money in a way that it helps someone in their community. It aligns with their core beliefs.

The way I'm relating this to crypto is that there is a minority of people out there who would be willing to get a loan via a decentralized smart contract just because they don't like banks or "the establishment." It may be faster and safer to go the traditional route (just like it would be less expensive to buy through Amazon in my "buy local" scenario"), but there's a minority of people who distrust or dislike the centralized approach. In this way, a use case aligns with their core beliefs.

My subjective view is that as the public becomes more informed about crypto, and a lot of the scams in the space fall away while the cream rises to the top, there's still an untapped portion of the population that will see why a decentralized approach has appeal vs. the traditional route. It may not ever be the majority or close to it, but that doesn't mean there still isn't room for quite a bit of adoption.

Really, most of the arguments that have been hashed and re-hashed in this thread boil down to whether someone is fine with the traditional system or not. I think both ways will exist in the future, but I believe one's adoption has much more growth potential than the other.

This is no shot at you, but you're turning this into a binary option again.

I'm not happy with the system as it currently stands. That doesn't mean I think the only other option is crypto. This doesn't have to be an either/or.

 

[BryceC]

Fair enough. I'll try to dial it back. I'd hate to make an enemy out of one of the few people who will talk crypto with me

For the record I'm not talking about you, I'm talking about the author of that blog.

 

[JustAnotherTimeline]

Bear case - Most people are using crypto as an investment and not for their myriad other purposes. If the overall market continues a downturn people tend to flee their riskier investments first. Several other crypto projects crash to zero and it continues to damage the public confidence. Bitcoin does actually become kind of a digital gold, which is something that is fairly price stable. That may not sound bearish, but in the context of people investing in it, isn't particularly meaningful.

For the record I think Bitcoin is never going to be zero. There is a market there. I also don't think it's going to a million on any timeline that would meaningfully effect me.

@agrabes I would be curious on your take on this as well.

Ok, how about this for another bull case.

The Bitcoin Lightning network has 4 times the throughput of VISA. Plus it costs pennies per transaction. The Taproot upgrade to BTC Core allows for stablecoins to be transacted on the BTC network.

Do you suppose businesses would be interested in payment processing in US regulated stablecoins that costs 4 cents....as opposed to paying VISA/MASTERCARD/DISCOVER/AMEX 2-3%?

Despite the Recent Crypto Meltdown, the First Bitcoin-Based Stablecoin Is in the Works

Lightning Labs has announced an upgrade to its Bitcoin platform that could soon see the launch of a Bitcoin-powered stablecoin. Find out more.

www.fool.com

 

[BryceC]

You asked me for the bear case, I gave it. The bull case is very strong too. Again I might be investing again if it gets low enough.

I guess maybe there are a lot of strong opinions on this so let me be a rare case where I say, I don't know. We could all be spending Bitcoins in 30 years for all I know. We might not. Maybe what I find so frustrating about this whole thing is, nobody else truly knows either. If it were a no brainer investment we'd all already be doing it.

 

[agrabes]

The impressive bitcoin adoption curve is well documented. In order for you to be correct something will need to stifle adoption. I think your bearish case is more difficult to make with the data then the bullish case.

Crypto Winter Unlikely As ‘Astonishing’ User Growth Dwarfs Internet Adoption Rate: Macro Guru Raoul Pal - The Daily Hodl

Former Goldman Sachs executive Raoul Pal expects there to be billions of new cryptocurrency users by the end of the decade despite any jitters investors may currently feel about the markets.

dailyhodl.com

I don't doubt Bitcoin or possibly some other crypto will become (or stay) a reasonable alternative investment opportunity. Bitcoin is addressing a problem that many people in the mainstream are seeing. Which, imo, is about 30% a desire to find a hedge for inflation and about 70% that a lot of people in the middle and working classes are struggling in the economy we've had the last several years and are looking to Bitcoin among other things as a way to catch up with where they think they should be.

What I don't believe in is defi, web 3.0, smart contracts, etc. That's what I've been trying to say.

 

[Ames]

Anybody in this thread still trying to defend crypto? Asking for a friend.

All day. I find it interesting that the anti crowd in this thread seems to think the pro crowd has lost a bunch of money and is sad right now. Tells me some people really don't understand what they missed.

 

[Sigmapolis]

All day. I find it interesting that the anti crowd in this thread seems to think the pro crowd has lost a bunch of money and is sad right now. Tells me some people really don't understand what they missed.

I was mostly joking with that post.

Lotta people lost a lot of money in conventional equity markets lately, too.

I could have been one of them if I hadn't sold everything that wasn't bolted down in October... which wasn't me trying to be smart timing the market but rather needing money for down payment on a house.

If it is working for you then... great.

 

[JustAnotherTimeline]

I was mostly joking with that post.

Lotta people lost a lot of money in conventional equity markets lately, too.

I could have been one of them if I hadn't sold everything that wasn't bolted down in October... which wasn't me trying to be smart timing the market but rather needing money for down payment on a house.

If it is working for you then... great.

Hella timing bro! Sell equities at peak....and buy a house before rates skyrocket. Excellent.

 

[Sigmapolis]

Hella timing bro! Sell equities at peak....and buy a house before rates skyrocket. Excellent.

Everything broke my way.

-- got a great house my wife and I love
-- Zillow estimates the price has went up 5.2% since we bought it
-- that might deflate at some point in the future but eh fine for now
-- locked in the interest rate the literal week of all-time lows
-- sold the housing fund (which was in an S&P 500 index) right before the peak-of-the-peak

I don't claim to be good. But to borrow a quote from Napoleon --

"I'd rather have lucky generals than good ones."

 

[JustAnotherTimeline]

All day. I find it interesting that the anti crowd in this thread seems to think the pro crowd has lost a bunch of money and is sad right now. Tells me some people really don't understand what they missed.

I don't know about you but I am stoked for the bear market! Hoping to snag some cheap ADA and ETH to go with my BTC. BTC is all I hold through the bear.

The one thing I don't know if non crypto folks understand is the risk/reward opportunities with massively asymmetric bets during a crypto winter. For example, it's a no brainer to scoop say $500 ADA at 20 cents (50 cents right now) during the bear market. There is a wayyyy better then a 20/1 shot of that being $10000 within a couple years. And that is extremely modest. During this last cycle you could have purchased ADA for 2 cents. And it went to over $3.00. And that is a top 10 coin and arguably the 2nd best L1.

There is a lot of fun to be had in these markets imo.

 

[nocsious3]

You think the whole ship is sinking, don't you? Aint just crypto.

I think the chances that the bond markets blow up, and the BRICS nations abandon the current dollar hegemony is much higher than is being acknowledged in financial media.

We just Powell say this like two days ago:

"Rapid changes are taking place in the global monetary system that may affect the international role of the dollar."

We had the head of the BIS say this recently:
THE BANK FOR INTERNATIONAL SETTLEMENTS SAYS CENTRAL BANK DIGITAL CURRENCIES POISED TO BE THE FOUNDATION OF THE FINANCIAL SYSTEM

German just printed a producer price index of 33.6% last week.

Bank of Japan, despite unlimited mmt money,can't hold theit 10 yr Treasury at their .25% peg.

Ultimately I have no idea who's going to buy the surplus of US treasuries if the Fed every actually sells them. They've been saying that for over six months, but when they publish their holdings, they haven't sold anything.

If nobody wants to finance US debt, the only outcome is a new monetary system. So yes, I'm an ultra ultra ultra bear on the current monetary system and I realize that's a very minority position.

The big question is if I'm right, what type of monetary system do we get. I've spent about 2 years in 2009-2011, thinking about that until I concluded I was probably wrong. I spent another 3 years looking at it starting in 2019 but really seriously during the COVID shutdowns.

I don't find much of any valuable information from financial news. I read what the central banks say that's published but not reported. I read what the BIS and IMF says. I read what the Financial Stability Board puts out. It certainly looks to me that the next system is being built and almost nobody is paying attention.

 

[JustAnotherTimeline]

I think the chances that the bond markets blow up, and the BRICS nations abandon the current dollar hegemony is much higher than is being acknowledged in financial media.

We just Powell say this like two days ago:

"Rapid changes are taking place in the global monetary system that may affect the international role of the dollar."

We had the head of the BIS say this recently:
THE BANK FOR INTERNATIONAL SETTLEMENTS SAYS CENTRAL BANK DIGITAL CURRENCIES POISED TO BE THE FOUNDATION OF THE FINANCIAL SYSTEM

German just printed a producer price index of 33.6% last week.

Bank of Japan, despite unlimited mmt money,can't hold theit 10 yr Treasury at their .25% peg.

Ultimately I have no idea who's going to buy the surplus of US treasuries if the Fed every actually sells them. They've been saying that for over six months, but when they publish their holdings, they haven't sold anything.

If nobody wants to finance US debt, the only outcome is a new monetary system. So yes, I'm an ultra ultra ultra bear on the current monetary system and I realize that's a very minority position.

The big question is if I'm right, what type of monetary system do we get. I've spent about 2 years in 2009-2011, thinking about that until I concluded I was probably wrong. I spent another 3 years looking at it starting in 2019 but really seriously during the COVID shutdowns.

I don't find much of any valuable information from financial news. I read what the central banks say that's published but not reported. I read what the BIS and IMF says. I read what the Financial Stability Board puts out. It certainly looks to me that the next system is being built and almost nobody is paying attention.

Based on what I have read from the IMF CBDCs are going to happen. But they have said there is no "universal" case for one. That is something I would fear.

Japan has been monetizing debt for awhile now I believe. It seems the US is heading this direction. What makes you think the music is going to stop though? I could see a US CBDC, but would that really be akin to the "new" monetary system you fear?

 

[Fitzy]

This is no shot at you, but you're turning this into a binary option again.

I'm not happy with the system as it currently stands. That doesn't mean I think the only other option is crypto. This doesn't have to be an either/or.

Yeah, there's gray area for sure. I was just trying to distill things in a simple manner for why a chunk of "crypto bros" think the way they do that people on the other end of the aisle might understand better.

 

[nocsious3]

Based on what I have read from the IMF CBDCs are going to happen. But they have said there is no "universal" case for one. That is something I would fear.

Japan has been monetizing debt for awhile now I believe. It seems the US is heading this direction. What makes you think the music is going to stop though? I could see a US CBDC, but would that really be akin to the "new" monetary system you fear?

Fear? It depends on what it is.

On the Japan issue, they aren't the reserve currency so they have a bit more slack than the US. What's changed is that if they can't hold the peg, they aren't just printing to keep their head above water. If rates rise even a little bit, they have to print trillions to serve the debt. That's hyper inflation expansion of the money supply.

The US isn't far behind but they have tighter constraints ,as the whole world owns gobs of our bonds. They make stuff and we export dollars. There is no incentive for foreign countries to sell us stuff in exchange for dollars, and then park those dollars in US treasuries.

The are losing money hand over fist now because the bond yield is 3.2 % but they are losing at least 6% annually to inflation. Normally the Fed would just jack rates to 15% like Volker did in the early 80,s but they can't because the recession would be catastrophic. The whole system is built on new debt creation. When you can't lend to anyone because there's not enough profitable loans to be made, a debt based monetary system collapses. The 2008 crisis was a debt crisis but the just managed to move it onto the books of the various central banks. There is no place left to punt off the debt.

The US can't raise much because it will kill the remaining economic activity. They can't ease as the the inflation will make it so nobody finances our debt. Impasse.

 

[JustAnotherTimeline]

Fear? It depends on what it is.

On the Japan issue, they aren't the reserve currency so they have a bit more slack than the US. What's changed is that if they can't hold the peg, they aren't just printing to keep their head above water. If rates rise even a little bit, they have to print trillions to serve the debt. That's hyper inflation expansion of the money supply.

The US isn't far behind but they have tighter constraints ,as the whole world owns gobs of our bonds. They make stuff and we export dollars. There is no incentive for foreign countries to sell us stuff in exchange for dollars, and then park those dollars in US treasuries.

The are losing money hand over fist now because the bond yield is 3.2 % but they are losing at least 6% annually to inflation. Normally the Fed would just jack rates to 15% like Volker did in the early 80,s but they can't because the recession would be catastrophic. The whole system is built on new debt creation. When you can't lend to anyone because there's not enough profitable loans to be made, a debt based monetary system collapses. The 2008 crisis was a debt crisis but the just managed to move it onto the books of the various central banks. There is no place left to punt off the debt.

The US can't raise much because it will kill the remaining economic activity. They can't ease as the the inflation will make it so nobody finances our debt. Impasse.

Interesting. So essentially it would lead to the US Fed continuing to purchase treasuries and hold them on their books because nobody wants them? Then we eventually take the same path as Japan? Ahhhh....the glory of fiat.

Does this article align with your take? I think it might.

ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero

www.zerohedge.com