patrick.net

Cyber Currency/bitcoin etc. with near certainty, are a bubble. I'd put the probability at over 99%. Though it may be early in its bubble life, all the cyber currencies we know of, will eventually crash to near zero if not actual zero.

Here, I'll start with Nasdaq's "why bitcoin is not a bubble" and dismantle their thesis point by point:
http://www.nasdaq.com/article/five-reasons-why-bitcoin-is-not-a-bubble-cm864891
1. growing acceptance as legal tender. Maybe, but that could reverse just as easily. However, that will literally not help bitcoin at all in the long run. Bitcoin will only maintain significant value if people hold it as an INVESTMENT. If they use bitcoin to pay for stuff, but keep their money in regular money, in their resident country, then they only fleetingly have bitcoin, so it makes no difference as an investment. Further, there are actually better/easier/quicker ways to pay for stuff. Why would I or anyone else care if a restaurant accepts bitcoin to pay for my dinner, when I can toss a credit card down and get 2% or 3% in benefits, while paying $0 transaction fees. Also, it will be processed instantly, not with however godawful minutes are sometimes required before bitcoin confirms. AND, there are already better/easier ways to send money around the world.

2. Increase merchant adoption. Nope, doesn't matter at all. See my response to #1 above. Further, bitcoin's volatility literally makes it useless for anything but an instant transaction. If I wrote a rental contract in bitcoin, the freaking rent could triple, or go down by half in a few days! So, it only really works for instant transactions, and then you could buy the bitcoin/pay/receive/sell the bitcoin; However, that is just an overly complicated way of paying for your latte!

3. Bitcoin is increasingly acting as a store of wealth in some distressed countries. Yeah! We finally have a reason that isn't just silly on its surface! Yes, as a store of wealth, you'd have to keep the bitcoin as bitcoin, hence creating demand. Dr. Robert Shiller mentioned that, say you'd been living in Latvia or Lithuania, when the Soviets rolled in, well bitcoin would have been a better option than holding your money in a bank, or owning a house. The communists seized homes, they seized bank accounts. But your bitcoin would have been safe. However, we don't really have communists anywhere anymore; People own homes in China, Russia, they have bank accounts. The fear of that is really tinfoil hat level. Also, any sophisticated government taking like that, could seize the bank records, and find out that you bought bitcoin, so you'd only be really getting minimal protection.

4. Bitcoin has only just gone mainstream. Seriously? EVERY bubble has a point where it suddenly goes mainstream! Remember 2005, when everyone was talking about how much their home went up in value? flip my ass was on tv all the time? Remember the dot.com craze? Beanie babies? Arabian horse investment pools? Nifty Fifty stocks? Tulips? They all do this! So, while that may mean it has a ways to grow for now, by no means does that mean it won't crash later!

5. Bitcoin's supply is limited. There will only end up being 21 million coins. But there is a problem with this logic: Limited supply is only one factor that causes something to be valuable. You show me an old car that is in limited supply and has high collectable value, I'll show you an old car that has limited supply and junk value; You show me A valuable renaissance painting that has limited supply, and I'll find 100 other painters from the same period whose art is sold at garage sales;

And now for some real potential problems with bitcoin:
1. Government crackdown. While the transactions in bitcoin itself can't be stopped, at some point, you'll need to either put money in, or take money out, and those are vulnerabilities for regular financial institutions to report you.

2. Duplication. There are already something like 1000 cyber currencies. we could add a 1000 more in the next couple of months.There is really very little barrier to designing a cyber currency. Do you think they will all stay around, and go up in value like crazy? No? only certain ones? well, how do you know Bitcoin1000 won't come out tomorrow, with a better program, a better methodology, or just even better marketing, and be the new hot one? Just because Bitcoin or Ethereum are the first doesn't mean they will survive long term! Ericsson phone, or blackberry ring a bell?

3. Value. Bitcoin literally has a value of zero, as an investment. By that I mean fundamental value analysis from economics. You can value a stock by its predicted future earnings. You can value a house by its predicted rental amount. Of course, those predictions vary on lots of factors: future rents, economic growth, future interest rates, repairs to the house etc, but as inexact as it is, there is a value to a future income. A bitcoin makes nothing. Ever.

4. Bitcoin has become a stampede of "greater fools." Look up THIS THREAD, to see people saying essentially, "buy it, because it will go up!" When the fundamental reason to buy an investment, is because it is going up.... You got yourself a bubble!

Go ahead and make fun of me!
Everybody made fun of me when I predicted the housing bubble in 2005!
Everybody made fun of me when I claimed the bottom was in for housing 2009-2010!

“gov will eventually ban it because they can't track and tax bitcoin payments.”

Oh, that’s very incorrect. People still think bitcoin transactions are anonymous? You haven’t kept up with the news. There is a variety of software solutions designed for exactly that purpose. It took just a few minutes for me to do my crypto taxes utilizing this software. Even though I used several exchanges and hundreds of transactions. Made it easy for me. Do you think the IRS is not capable of doing the same? Just google it. If you invest in crypto you better pay your taxes!! You want to work with the system not against!

https://bitcoinexchangeguide.com/bitcoin-taxes-irs-tracking-software-cryptocurrency-classification/
Here is just one link of how the IRS utilized tracking software. If you had holdings of a certain amount some exchanges have to report you to the tax man no matter what:
http://fortune.com/2017/11/29/irs-coinbase
Sure, nobody likes paying taxes but I don’t mind it that much. It just showed me how massive my crypto gains were.

just_passing_through says

I asked a co-worker if he got out today and he said no. He said this exact pattern happens every year at this exact time and that the scale is just higher each year. Something about Chinese New Year and some other stuff. That it'll be back up in a month and so he's just riding it out.

Wow.

Damn I'd have sold last year maybe before it reached 7K, but that's just me.

Smart co-worker! Every time it crashes weak hands sell. It’s too bad for them but I sincerely thank them for the buying opportunity and massive discounts.

Sure sign of a topping market, big plunges, and holders who don't sell until they've lost every penny, and then some. That's a market trend you can set your watch to. Even Ethereum is only $200 above it's mid-December price(down $400 from peak).

NuttBoxer says

That's a market

I don't remember beanie babies going to nothing they are still being traded on ebay.
And tulips. They've dropped down to less than a buck a piece but they can be planted to grow beautiful flowers.

As far as I can see when you buy bitcoin you are buying a unique sequence of bits.

Problems with bitcoin:
Not good for transactions, too slow, fees.
Not a stable store of wealth.
Not a real investment. Depends on "the greater fool" to cash out with a profit; pyramid?
Not environmentally friendly. "Mining" bitcoin now uses the same amount of electricity as New Zealand.

It's backed by central bank fiat currency.

Breaking News!
Tulip bulbs can be had for less than a dime!

You are talking about bitcoin trade transactions done through an exchange. This is easy just like tracking stock trades done on E*TRADE. They don’t even need any software. It’s only a matter of accurate and complete reporting on the exchanges’s part.

I’m talking about peer to peer transaction. No one can track that. Bitcoin p2p transaction is designed to evade tracking.

Tracking can only be done when the users exchange bitcoin for money or money for bitcoin at the exchange. But this is why bitcoin cannot get popular (from the IRS perspective):

- it needs to be converted to another currency to be tracked. In other words, it cannot function alone or ever replace the dollar.
- when it gets popular enough that people no longer need to convert bitcoins to money, because enough people accept it, the gov loses tracking ability and tax evasion will rise, causing them to ban it.

There are two groups promoting Crypto currencies. The “smart” ones who get crypto currencies but spew out half truths hoping to make more money from new comers and the new ones who don’t know how crypto currency works very well.

anon_3a1a3 says

“gov will eventually ban it because they can't track and tax bitcoin payments.”

Oh, that’s very incorrect. People still think bitcoin transactions are anonymous? You haven’t kept up with the news. There is a variety of software solutions designed for exactly that purpose. It took just a few minutes for me to do my crypto taxes utilizing this software. Even though I used several exchanges and hundreds of transactions. Made it easy for me. Do you think the IRS is not capable of doing the same? Just google it. If you invest in crypto you better pay your taxes!! You want to work with the system not against!

BorderPatrol says

I’m talking about peer to peer transaction. No one can track that. Bitcoin p2p transaction is designed to evade tracking.

Interesting read on the subject: https://www.technologyreview.com/s/608716/bitcoin-transactions-arent-as-anonymous-as-everyone-hoped/

If I really want to be anonymous, cash still works pretty well. I didn't fully read the article, but I assume if my computer were ever seized and I was swapping bitcoins with others, it would be blatantly obvious that I had bitcoin to any IT type detective.

I get there are bank regulations, but until stores stop accepting cash, you can transact and use it pretty anonymously. If you're getting into 5 figures that needs to be anonymous, then you're just tax evading for the most part or dealing drugs. Either way there's this: The Currency and Foreign Transactions Reporting Act of 1970. There will be something similar to this that will likely shut down or at least devalue bitcoin. This is a certainty.

And then there's this:

BorderPatrol says

There are two groups promoting Crypto currencies. The “smart” ones who get crypto currencies but spew out half truths hoping to make more money from new comers and the new ones who don’t know how crypto currency works very well.

I don't believe any of them understand it. They're all doing technical trading (the smart ones), but I don't think they even understand bitcoin or any of these cryptos. They are just taking candy from a baby (new investors) and understand how markets work but not necessarily bitcoin. They have to be careful not to get burned on this either.

I wouldn't even call this a bubble necessarily. This is probably the greatest pump and dump scheme I've ever seen. It will look like a bubble in the end. There's not a soul on this planet that predicted bitcoin at $17k at the start of 2017. If someone did I'd love to see an accurate link to when that was predicted.

just_passing_through says

I asked a co-worker if he got out today and he said no. He said this exact pattern happens every year at this exact time and that the scale is just higher each year. Something about Chinese New Year and some other stuff.

Chinese New Year is one month away.

Soviet Bitcoin, military grade:

Satoshi_Nakamoto says

Interesting read on the subject: https://www.technologyreview.com/s/608716/bitcoin-transactions-arent-as-anonymous-as-everyone-hoped/

that article talks about something else. no one can track bitcoin transactions done by people who don't want to be tracked (tax evaders).

it certainly doesn't have a solution for the IRS's inability to track p2p payments. unless you consider wiretapping 200 million tax payers a potential solution.

anon_fad35 says

Satoshi_Nakamoto says

Interesting read on the subject: https://www.technologyreview.com/s/608716/bitcoin-transactions-arent-as-anonymous-as-everyone-hoped/

that article talks about something else. no one can track bitcoin transactions done by people who don't want to be tracked (tax evaders).

it certainly doesn't have a solution for the IRS's inability to track p2p payments. unless you consider wiretapping 200 million tax payers a potential solution.

I disagree: all it takes for you to be tracked is your counterpart to get sloppy once. You don't have control over your counterparts.

Satoshi_Nakamoto says

Chinese New Year is one month away.

Yup, he said they sell to buy stuff in preparation then buy back in after that.

anon_3a1a3 says

Smart co-worker! Every time it crashes weak hands sell. It’s too bad for them but I sincerely thank them for the buying opportunity and massive discounts.

Well, I hope you and he both make out like bandits. Not my thing but I certainly don't begrudge other folks for making out like bandits.

WookieMan says

If I really want to be anonymous, cash still works pretty well. I didn't fully read the article, but I assume if my computer were ever seized and I was swapping bitcoins with others, it would be blatantly obvious that I had bitcoin to any IT type detective.

there are ways you can encrypt your HD so they can't read the data without your password. same as them not being able to get into people's iPhone.

they can try to sniff your unencrypted bitcoin communication traffic but they'll need to know where you are located in the first place. and they won't know that because you hide your IP with many different ways available to even non-hackers these days. this is probably too geeky for the average reader. but bottom line is it's not difficult to remain 100% anonymous when sending, receiving bitcoins and avoid paying taxes.

cash doesn't work well. as you mentioned as the amount gets large, you get tagged by the bank as you withdraw money. and you can't safely carry millions with you as you travel without being detected. bitcoin takes tax evasion and money laundering to the next level.

WookieMan says

If I really want to be anonymous, cash still works pretty well.

John Mcafee thinks bitcoin and similar cryptos will eventually be replaced by a segment called privacy coins - which are apparently truly anonymous.

Excluding the NSA being in your computer or whatever paranoia's one (not you) might have.

Satoshi_Nakamoto says

I disagree: all it takes for you to be tracked is your counterpart to get sloppy once. You don't have control over your counterparts.

you don't realize that people who want to remain anonymous do not use the same address twice. and they are not using real name and address, so you can track them back to their one time public bitcoin address with a fake name and fake IP then what?

that article doesn't even scratch the surface of bitcoin's anonymity.

I don’t care much about anonymity. I just hope 2018 will be as awesome as 2017 in terms of crypto gains.

anon_3a1a3 says

I don’t care much about anonymity. I just hope 2018 will be as awesome as 2017 in terms of crypto gains.

You kind of need to be concerned with the anonymity of it though if you're investing in it. That will be the reason governments shut it down and if you're averaged in at $10k a coin after this recent drop, you will lose a lot of money when the government shuts it down and the value goes to zero. Notice I didn't say if the government shuts it down.

BorderPatrol says

there are ways you can encrypt your HD so they can't read the data without your password. same as them not being able to get into people's iPhone.

Someone created the system and algorithms or whatever to encrypt. They can get into it or maybe have buddies that know how to crack it because it's shop talk or whatever. Others can figure out how to crack it just by being bright with computers and that type of stuff. To think the biggest, richest & most powerful governemnt in the world can't get into someone's computer if they really wanted to is a little naive honestly. I'm genuinely not trying to come across as a dick if it does sound that way.

The whole FBI thing with the San Bernardino cell phone was a joke. Why in the world would the FBI just come out and say they had zero problem getting into the cell phone? That would cause an absolute panic and TOTAL loss of trust in the government, more so then there already is. It would also destroy the faith in the world largest company, which so happens to be an American company that pays a lot of taxes. The next largest phone maker? Samsung. There's zero benefit for our governemnt to ever disclose any of their capabilities, especially in that situation.

All this said, the government can't and won't be able to track down all the people doing in anonymously. So you are correct that most people will never get caught and it is 99.9% anonymous because there aren't the resources to go after everyone.

My question is how does the tax evader extract the value out of bitcoin? Or are they just buying shit with bitcoin? That's one aspect I don't understand. Like if you had a $1M windfall by getting in low and selling high. I don't think you can just throw that cool million in an account and start buying shit. Maybe you can and I guess that's why I'm asking. It's fine you can trade the currency anonymously, but everyone still need their local currency to buy things for the most part and I don't see how putting say $1M into a bank account doesn't flag some regulation.

Some people seem to be overly focused on Bitcoin

The technology is Blockchain

The usage here is in crypto-currencies

The most popular and well known one, currently with the largest market cap is Bitcoin.

Personally I think Ethereum has more potential

For those pontificating or investing in crypto, may I pose a thought exercise? More than half of the inflows are from Japan, but we talk USD here at Patnet. So when deciding how to valuate cryptos, we do it in USD.

What if the USD was a crypto using blockchain?

How many USD are there in circulation?

errc says

What if the USD was a crypto using blockchain?

Our economy would screech to a halt waiting for transactions to process.

errc says

For those pontificating or investing in crypto, may I pose a thought exercise? More than half of the inflows are from Japan, but we talk USD here at Patnet. So when deciding how to valuate cryptos, we do it in USD.

What if the USD was a crypto using blockchain?

How many USD are there in circulation?

I guess we should be scared when Japan shuts crypto currencies down? Or at least for those invested in it.

The USD is the USD, not sure I'm following the question. Unless the system is as seamless as the current world (currency wise) we're in, I don't really get the point of these digital currencies. I'm 35, tech savvy enough and see zero value in this stuff. Bitcoin, Ethereum, etc. I currently pull out my credit card, get 3-5% cashback on about $100k in charges a year. Pay it off monthly, rinse and repeat.

I don't need to evade taxes. I've bought weed in Colorado just like I would buy bread at a grocery store and the FBI isn't knocking my door down. Anyone that owns bitcoin will take my $5,000 in USD cash for their used car. I still haven't seen a compelling argument for the value of any crypto currency outside of those doing illicit activities or those gambling on it to make a buck.

I'll fully admit I'm rather naive on the subject. I've looked into it as much as I have time to. The reality is, nothing has presented itself worthy of investing more time into finding out more about cryptos. I've read all the comments in this thread and still have not seen a valid argument why any digital currency will overcome the USD, Yen, Euro, etc. or why they're even stick around. It's pure speculation and I'm fine with that aspect of it. Show me why any of these cryptos will have any value in 5 years and I'm all ears. I'm being serious. I'm not an echo chamber guy, but I do need to hear valid arguments and points as to why these will be there in the future for me to change my stance.

The USD is the USD, not sure I'm following the question.

How transparent is the USD?

How many are in circulation?

Where did all the USD come from?

At one point in time there were zero USD. Now there’s a lot of USD, but we don’t know how many. Most people have no clue where they come from or how they found their way into the hands of those that hold them at present.

The USD is the currency of a supposed “Capitalist” country. There’s that whole transparency and Complete Information problem though, nobody seems to know OR care.

However with cryptos, these questions may begin to be asked, and personally, that alone has some value.

anon_3a1a3 says

I just hope 2018 will be as awesome as 2017 in terms of crypto STOCK MARKET gains.

There, fixed.

Why in the world would the US gov shut down exchanges? They are about to get massive tax inflow from crypto. It will be interesting To see how much tax rev will come from crypto for 2017 alone. So far everybody is profiting from the crypto bubble except for the panic sellers. You live and learn.

“Show me why any of these cryptos will have any value in 5 years and I'm all ears”

In 5 more years??! If these insane gains will be going on for 1-2 more years I will retire early! I am hoping for one more year but crypto has exceeded my expectations every time now so who knows.

anon_2653c says

anon_3a1a3 says

I just hope 2018 will be as awesome as 2017 in terms of crypto STOCK MARKET gains.

There, fixed.

I agree. My stock portfolio increased a lot too but compared to 10x-15x on some of my crypto holdings the stock market gains look rather unimportant.

Thanks for clarifying a little more.

errc says

How transparent is the USD?

I honestly don't know how to answer this. I'm not sure how any currency can be "transparent" unless I'm misinterpreting what transparency is. Not trying to cop out, but how is any crypto more transparent then the USD? Or Euro? From my research no one even knows who actually created bitcoin for example. While the dollar itself is hard to track, businesses and even other countries transact in it. Publicly traded stocks in the US transact with dollars and are required to report how many they made and how many they lost. Large funds report how much they own of certain stocks, etc. No one knows who holds how much of these digital currencies. Hell does anyone know how much is actually exchanged if you can do it P2P? I'd argue there's less transparency with crypto, there's just no government interference. I wouldn't classify that as more transparent vs. the USD.

errc says

How many are in circulation?

I honestly don't know. What does it matter though? So there's 21 million bitcoin by X year (can't remember). So what? The amount of dollars increases every second through loans on top of the currency in circulation. I guess I'd ask how would bitcoin promote growth? I don't think it would. People would just hoard it, likely very rich people. Which is cool if you got some coins when it was cheap. Outside of that, 21 million coins in a 6+ billion population world end up in the hands of the rich if governments don't shut it down. If you think you're part of that 21 million that will get a piece, go for it. I've said it before, there's money to be made. The major governments of the world will have a say in it sooner than later though. I hate governemnt, but couldn't imagine a world worth living in without it.

errc says

Where did all the USD come from?

Leverage. Loans. Created out of thin air essentially. Who cares? Every single crypto currency was created out of thin air as well. It's all made up. Who cares if some supplies are limited. These words I'm typing were all made up out of thin air at some point too. You can just read them because you learned about these made up words. The USD by all means was just made up by humans and became the biggest and most powerful currency. So people use is just like the words you read here.

errc says

The USD is the currency of a supposed “Capitalist” country. There’s that whole transparency and Complete Information problem though, nobody seems to know OR care.

However with cryptos, these questions may begin to be asked, and personally, that alone has some value.

As I mention, USD made up out of thin air. Bitcoin the same. Ethereum the same. Yen, whatever. There's no difference. While bitcoin may not have been created by a capitalist, it will be manipulated and molested by the capitalist. So what's the difference? These cryptos don't have governments behind them and any government that values their current form of currency, most likely won't allow this to go on.

This isn't a utopia where some magical currency gets created and everyone just lives in harmony, asks no questions and starts using it. People are going to lose life savings messing around in crypto. People will kill themselves. It's a dog eat dog world and these currencies aren't even a grain of sand on a beach right now, yet people are getting consumed by it.

Good luck trading it man, seriously. I don't benefit any by seeing people suffer or have losses. If you personally make a couple million off trading this stuff I'd be the first person to congratulate you. I wouldn't be eating crow necessarily cause I've always said you can make money on it. But I personally won't have any emotions of having missed out something knowing how most of the investments will actually turn out for the vast majority involved.

anon_b7985 says

Why in the world would the US gov shut down exchanges? They are about to get massive tax inflow from crypto. It will be interesting To see how much tax rev will come from crypto for 2017 alone. So far everybody is profiting from the crypto bubble except for the panic sellers. You live and learn.

The US government is going to get more from Apple in one year, just from repatriating overseas money, than the US government will see in taxes from crypto gains the next 5-10 years. That's not even including Apple's normal tax bill.

Also a good chunk of the crypto gains will go unreported and no taxes paid. While it's not an exact science, the dump of cryptos the last week here took a lot of money out of the economy as well. No taxes will be paid on that and that money could have been invested in US businesses. That's not good if you like living here if you ask me.

If it's truly anonymous, the US governemnt has no option but to shut down exchanges if they're doing their job for the people that actually pay and vote for them. While I don't want to see people get burned, I'm a US citizen and my governemnt is doing it's job protecting me by shutting down crypto currencies. It's just a matter of time IMHO.

errc says

The USD is the currency of a supposed “Capitalist” country. There’s that whole transparency and Complete Information problem though, nobody seems to know OR care.

What is this USD you speak of?
The federal reserve note you fold in your wallet is not federal and they have no net reserves.

It has been so long that central bank currency has had any real backing that many of our younger citizens don't realize that money should be a medium of exchange, a unit of account, and a store of value. Bitcoin is not money. Many would argue that the central bank currency is not money either but you can't buy bitcoin without it.

Wookieman, besides the additional tax rev the us is receiving the crypto-economy is also creating jobs. All these new crypto companies can be seen as start-ups. The US will not shut down innovation but support it. In the near future Banks will use cryptography to settle global payments within seconds, saving a ton of money compared to the ancient SWIFT process. The lending process will change and be globalized by utilizing smart contracts on block chains. I agree there should be more regulations overseas just like here in the US (KYC - know your customer guidelines) but The block chain economy will be massive and the US will be one of the leading countries.

anon_b7985 says

Wookieman, besides the additional tax rev the us is receiving the crypto-economy is also creating jobs. All these new crypto companies can be seen as start-ups. The US will not shut down innovation but support it. In the near future Banks will use cryptography to settle global payments within seconds, saving a ton of money compared to the ancient SWIFT process. The lending process will change and be globalized by utilizing smart contracts on block chains. I agree there should be more regulations overseas just like here in the US (KYC - know your customer guidelines) but The block chain economy will be massive and the US will be one of the leading countries.

I'd love to see some data that shows crypto currency has increased US tax revenue. I personally know multiple people with gains that have no intentions of paying taxes on those gains. That hurts every single US citizen if even only 10% don't pay taxes on their crypto gains. While I'm not overly patriotic, I really have no interest in shooting my own foot off rooting for cryptos to devalue my own countries currency. Call me crazy I guess. But hey, if you don't dig the USD maybe you'd like to live somewhere else?

Most of your comment also comes across as nonsensical or simply from a perspective of someone trying to pump something they can make a buck on. You can settle "global" payments within seconds now. I recently sent money to a person visiting Italy on my phone at lunch. Also not sure what a "smart contract" is. I also love all the block chain talk. I personally prefer cube rope, but that's just me.

Still waiting for a intelligible and coherent argument or even conversation as to why crypto currencies will continue and why they have value. I have less patience with anon users here, so pardon my ass hat tone. We're getting into deep comment numbers on this thread and I'm starting to believe that my assessment is 100% spot on based on the essential non-responses in favor of crypto. Seems like pump and dump to me.

LOL can't be "everyone." this is a zero sum game that for someone to be a winner, someone else has to be a loser.

So far everybody is profiting from the crypto bubble except for the panic sellers. You live and learn.

anon_b7985 says

Wookieman, besides the additional tax rev the us is receiving the crypto-economy is also creating jobs. All these new crypto companies can be seen as start-ups.

as strange as this sounds, it is 100% correct. (it doesn't address the untaxable aspect of bitcoin payments and the rest of the paragraph is either completely wrong or doesn't make sense but that's another story.) crypto-currencies DO grow the economy.

which makes me wonder. if something as useless as bitcoin (in theory it can be useful - but currently it's not useful yet) can grow the economy. what else grows the economy? basically everything that makes people spend and create jobs, even though the product is 100% useless or close to useless. i can create a silicon valley start-up tomorrow selling air (that's right - air that you breathe), promote it to popularity and it will have a positive impact on GDP.

which makes me wonder. if something as useless as bitcoin (in theory it can be useful - but currently it's not useful yet) can grow the economy. what else grows the economy? basically everything that makes people spend and create jobs, even though the product is 100% useless or close to useless. i can create a silicon valley start-up tomorrow selling air (that's right - air that you breathe), promote it to popularity and it will have a positive impact on GDP.

———————-

That’s already the economy though. Gas stations, fast food, hair salon and mani/pedi, shopping malls for extra costume clothing, and horseshit financial institutions to bilk labor in between.

BorderPatrol says

as strange as this sounds, it is 100% correct. (it doesn't address the untaxable aspect of bitcoin payments and the rest of the paragraph is either completely wrong or doesn't make sense but that's another story.) crypto-currencies DO grow the economy.

Not saying you're wrong, but would love to see some IRS data on it. I haven't yet. You also almost certainly will be able to claim being correct, but at what level? Let's say the market cap of Bitcoin (I know there are a ton of others) is about $200 billion at current price. Then figure that not everyone was a winner in that market cap increasing or that not everyone sold their stake and took their profits. Then there's the tax evaders. Then the fact, in this very thread, it was stated 50% of bitcoin is held outside the US. We also know there are potentially a million or so coins that could literally just be lost and there will be no gains or losses on them ever. The amount of tax this will generate for the federal government probably doesn't even come close to touching the least valuable company in the S&P 500. Then there's the utter waste of resources in mining this stuff.

So sure, the US is collecting taxes on this. Would they have collected taxes though if these same people invested in other avenues? Would other business have created the same number of jobs with the same capital allocated to them as to crypto ? My argument would be yes. So I don't see it as a job creator, "start up" or driver of economic growth at all really. Most of the money would have been invested elsewhere will much more solid long term growth and stability. Bitcoin completely crashes and it does more harm then anything good it's done on this run up.

Again, I have not seen a compelling argument or discussion yet. My guess 99.9% of everyone here is completely working in the world of the USD. Why people are interested in devaluing their own future is kind of strange to me. Crypto gains for a US citizen are going to be transferred to dollars. This alone should scare anyone arguing there's actual value in crypto. It's a trade and not an investment or store of value.

Wookieman,
“I recently sent money to a person visiting Italy on my phone at lunch”
What fees did you incur and what system did you use?