patrick.net

clambo says

None of the guys who like Bitcoin bought it for $65,000, but some did and they are biting their fingernails waiting for other guys to bid it back up.

Clambo in 2019: Someone bought the Bitcoin top at 20k!
Clambo in 2022: Someone bought the Bitcoin top at 65K!
Clambo in 2024: Someone bought the Bitcoin top at 150k!

There will always be the-glass-is-half-empty type of guys.... trying to shit on your investment is what they do in their free time.
Bitcoin has been the best performing asset over the last 10years.

FJB says

To keep gold requires a lot of energy

Not if you put it in a chest, bury it and make a map. Or you can make it into jewelry. When you hold Bitcoin it is a flash drive worth only what you can get a rube to pay for it AND it requires an unsustainable amount of energy to maintain.

FJB says

Onvacation says

Gold is an element.

People literally get rich on vibrating air molecules. Music royalties. They don't own the air molecules themselves, just the vibrations.

Are you equating gold to air? Really?

mostly reader says

to.

There was a chart few posts above mine, the type which compares crypto against other financial instruments (fiat/gold/etc.) and crypto comes out ahead in all metrics. I don't see it any longer.

Take your flash drive and a gold coin to a pawn shop and see which one they want to buy.

FJB says

I don't understand why there is a debate amongst sound money people.

Definition of sound money

: money not liable to sudden appreciation or depreciation in value : stable money specifically : a currency based on or redeemable in gold — compare paper money.

Bitcoin is neither sound nor stable.

Onvacation says

FJB says

To keep gold requires a lot of energy

Not if you put it in a chest, bury it and make a map

That's correct FJB. Its much more cost effective, safer and easier to store Bitcoin than it is to store gold.
No need to buy a chest and bury it in the ground. No need for a map either.
With Crypto you simply store your wealth on a cold storage/hardware wallet. Keep your private keys at a different place.

A hundred years ago burring your wealth in the ground was maybe a thing but this is 2022.
....Bill still uses a landline and overpays for matchbox cars :)

Ha ha so the guy who bought Bitcoin in 2021 for $65,000 and is $30,000 underwater in 2022 is gonna have $150,000 in 2024?

That’s a neat trick.

Gold bugs can easily trade GLDM but lose the expense ratio 0.18%.

clambo says

Ha ha so the guy who bought Bitcoin in 2021 for $65,000 and is $30,000 underwater in 2022 is gonna have $150,000 in 2024?

That’s a neat trick.

no tricks here. Bitcoin started ten years ago with less than $1. That's what happens if you have limited supply of Bitcoin. You cant print more.
People like you thought 20K was the forever top and Bitcoin will never reach 20k again. If I would have told you Bitcoin will be trading for 38k on 2/1/2022 you would have laughed and declared me crazy. $150k seems unbelievable to you in 2022. Lets talk in 5 years from now :)

Actually I never thought about Bitcoin until my friend bragged about her nephew having it recently.

Onvacation says

Not if you put it in a chest, bury it and make a map. Or you can make it into jewelry. When you hold Bitcoin it is a flash drive worth only what you can get a rube to pay for it AND it requires an unsustainable amount of energy to maintain.

If you bury it you cannot use it. Burying it and making a map is not secure either. I don't recommend it but you could make jewelry out of bitcorn wallets. It does not use that much energy relatively speaking. That's just FUD someone convinced you is true. Gold mining alone uses more energy so do coffee machines. If you shut down the legacy banking system it's a huge net plus in energy savings, it's not even close.

Onvacation says

Are you equating gold to air? Really?

You're damn right I am but I'm not making a comparison of equivalence, quite the contrary I'm showing you that people have decided vibrating air has value and in some cases A LOT of value.

Onvacation says

Take your flash drive and a gold coin to a pawn shop and see which one they want to buy.

I don't hang out in dirty pawn shops.

Onvacation says

Definition of sound money

: money not liable to sudden appreciation or depreciation in value : stable money specifically : a currency based on or redeemable in gold — compare paper money.

We all saw the dictionary companies change the definition of many things over the past 2 years. 'Vaccines' etc... The person who coined the phrase was Aristotle as far as I know unless someone before him did. Here is a gold bug blurb about it:

https://www.bullionvault.com/gold-news/money_aristotle_050120092?source=patrick.net

Notice there isn't anything in there about gold or volatility?

On that note I DO agree with you and the dict, sound money shouldn't be volatile. I did not say bitcorn was sound money. I suggested I'm a sound money proponent and that's the upside to bitcorn: It's volatility is generally positive (good!) and at some point it'll flatten out and become sound. I'm guessing that'll be true when there are a few billion people using it.

I think the days of insane overnight gazillionaires are over and there is much less upside but I think a 10x is given and likely much much more. I'll be happy if it beats the USD inflation plus some sort of decent premium over the long term. I expect I'll be happily surprised.

Onvacation says

I'd (for now) put asterisks next to bitcorn being 'durable' and 'secure' simply because it hasn't existed for very long. Many people make the mistake that bitcorn has been hacked which isn't true. Those were essentially bank robberies or the feds scrapping aws ec2 instances because morons left their bitcorn up there.

I do believe it's durable and secure though - we shall see.

clambo says

Actually I never thought about Bitcoin until my friend bragged about her nephew having it recently.

You don't have to. You've made great choices with your mutual funds and it paid off. I'm afraid younger generations (I'm X, younger than moi) won't be able to recreate your success.

This is one way for some of millennials and zennnials to catch a break. It's a somewhat short term period before things flatten out for good. Last I read >95% of crypto was held by those two generations. Lots less with X -> Boomers -> Silent in that order.

clambo says

Gold bugs can easily trade GLDM but lose the expense ratio 0.18%.

I've been staring at the gold and silver markets for nearly a year. Feels like I should have stacked some last summer. I do think they are something people should have. Cannibal Anarchy could happen. The sun could decide to EMP the earth and shut down the internet for an extended period. I think gold and silver are great for that situation despite the lackluster performance over the past decade. Even if they don't do as well this year as I think they might.

But that damn premium just kills me. For silver in particular it's like 50% over spot. If you try to buy a monster box of silver it's more expensive per coin that just buying singletons. WTF is up with that? I know it's heavier/$ and takes workmanship and shipping but damn.

People chided those new fangled electric candles at one point. Candles worked just fine for thousands of years.

FJB says

bury it

If I buried it I couldn't make 100,000 $10 loans which expire in 24hrs and automatically irrevocably retrieve the interest and principle I charged as per the smart contract.

It all depends on no one ever being able to figure out how to reverse the md5 or whatever hashing algorithm they are using.

That is, if someone figures out a quick way to say "given this input block, what unknown string must I tack on to the block to get the hash of the string to come out with a certain number of zeros at the end?"

It's totally possible someone might figure that out, then it's game over and all bitcoin will belong to that person. It will then take about zero energy for that person to mine coins, and it will be very fast. Whoever can do the calculation first gets the vig from the validation of that block.

Currently, people who want to mine coins have to just try all possible unknown strings until they get a hit. That's what's using up all the energy and making it slow.

Patrick says

That's what's using up all the energy and making it slow.

By design.

If people start mining too fast the puzzles get harder, by design.

"Mining", "coin", "digital gold" it's all a big scam to lure in the gullible, by design

FJB says

If I buried it I couldn't make 100,000 $10 loans which expire in 24hrs and automatically irrevocably retrieve the interest and principle I charged as per the smart contract.

So you rent out your digital gold? You've got to explain that one.

Onvacation says

So you rent out your digital gold? You've got to explain that one.

No I don't personally do that but that's an example of what someone can do.

Patrick says

It all depends on no one ever being able to figure out how to reverse the md5 or whatever hashing algorithm they are using.

https://www.movable-type.co.uk/scripts/sha256.html?source=patrick.net

"SHA-256 is one of the successor hash functions to SHA-1 (collectively referred to as SHA-2), and is one of the strongest hash functions available. SHA-256 is not much more complex to code than SHA-1, and has not yet been compromised in any way. The 256-bit key makes it a good partner-function for AES. It is defined in the NIST (National Institute of Standards and Technology) standard ‘FIPS 180-4’. "

This is upgradeable if say, super duper computers become common. Reality that's what everyone has been trying to do for the past decade - break it. Nobody has. There is something called a 51% attack that is more likely but it would require a nation state to buy up all of the high end compute over maybe a 6 month period costing billions. People would notice and the network could be hardened.

FJB says

Onvacation says

So you rent out your digital gold? You've got to explain that one.

No I don't personally do that but that's an example of what someone can do.

Crypto allows you to lend out your funds (peer-to-peer lending) for an interest payment and/or to stake your crypto for a reward.
I stake my ADA and Dot and earn between 5% for ADA and 12% for DOT (on Kraken). But I get the staking reward payout every 5 days, so the staking rewards are like an compounding interest payment (staking rewards on staking rewards) :)

If you burry your gold, you dont earn any staking rewards. You can also not lend buried gold to anyone. You might also not find your gold again if you lose your map. Also, your gold does not really appreciate in value. Bitcoin is up more than 10,000% in the last few years. Gold has remained at the same value. Gold is a terrible inflation hedge. Stocks, Crypto and RE are an excellent inflation hedge.

Its no surprise to me that the guy (Bill) who pays 10k for a matchbox car also thinks about buying gold to burry it.

Bitcoin for Corporations:

https://www.youtube.com/watch?v=XdgP25UcHB0&source=patrick.net

It's long and I haven't watched it all but the last segment starting at 3:00:00 is Saylor and Lyn Alden and can bring people up to date with the latest. Lyn has great macro analysis for lots of things not just bitcorn.

FJB says

This is upgradeable if say, super duper computers become common. Reality that's what everyone has been trying to do for the past decade - break it. Nobody has. There is something called a 51% attack that is more likely but it would require a nation state to buy up all of the high end compute over maybe a 6 month period costing billions. People would notice and the network could be hardened.

spot on. Its more likely that we will see a zombie outbreak or an alien invasion before someone hacks Bitcoin. But, if someone manages it, more power to that person (pun intended). That would be a nice way to go down in the history books. So, get on it, hack Bitcoin! Best of luck and let us know how it goes!

I mentioned it elsewhere but I bought some of an ETF of Swiss stocks, which I consider my defensive investment, rather than gold or similar.

I have no doubt that the Swiss Franc will be a strong currency, and the few Swiss companies in the index are likely to be around for a long time (e.g. Nestle).

FLSW has a low expense ratio.
The time I visited Switzerland 🇨🇭 I bought 3 Swiss Francs for $1 USD. Today $1 USD doesn’t buy 1 Swiss Franc.

My problem is I don’t have new money coming in so I will have to sell something to buy more.

clambo says

My problem is I don’t have new money coming in so I will have to sell something to buy more.

unemployed, looking for work or are you retired?

I’m retired from working.

clambo says

I’m retired from working.

Congrats!
Knowing you are retired I am even less surprised that you haven't looked too much in crypto and Bitcoin. As others said before, its a tool for younger generations to generate life changing wealth (catch up). I plan on using my crypto gains to buy more stocks and investment properties to retire early.

If i am retired that means I already made enough money and can just live off of my portfolio. In my retirement I don't want to invest in high volatile assets.

I love all this talk about "securing bitcoin". Can't make more of it.. lol.. while ignoring the 15k other digital currencies that everyone simply makes more of. AHAHAHAHAHAHAAHAAHAHA

Zak says

I love all this talk about "securing bitcoin". Can't make more of it.. lol.. while ignoring the 15k other digital currencies that everyone simply makes more of.

@Zak
Exactly! You just gave the most bullish argument for Bitcoin!
So, we have 15k other cryptos but countries and Elon Musk are only buying Bitcoin. They dont hold just any crypto on their balance sheet. Only Bitcoin. Have you asked yourself why?


....not expecting a cogent answer.

Bitcoin says

FJB says

This is upgradeable if say, super duper computers become common. Reality that's what everyone has been trying to do for the past decade - break it. Nobody has. There is something called a 51% attack that is more likely but it would require a nation state to buy up all of the high end compute over maybe a 6 month period costing billions. People would notice and the network could be hardened.

spot on. Its more likely that we will see a zombie outbreak or an alien invasion before someone hacks Bitcoin.

I don't see how you can be sure of that.

Maybe it won't take any significant computing power, but just one person clever enough to figure out how to reverse the hash quickly and with low compute time.

The question is, how much you are willing to bet that there is no one smart enough to do it?

https://www.nsf.gov/discoveries/disc_summ.jsp?cntn_id=100029&org=NSF&source=patrick.net

350 Years Later, Fermat's Last Theorem Finally Proved

I'm not talking about the 51% attack, but instead the ability to hash each block instantly.

Patrick says

Bitcoin says

FJB says

This is upgradeable if say, super duper computers become common. Reality that's what everyone has been trying to do for the past decade - break it. Nobody has. There is something called a 51% attack that is more likely but it would require a nation state to buy up all of the high end compute over maybe a 6 month period costing billions. People would notice and the network could be hardened.

spot on. Its more likely that we will see a zombie outbreak or an alien invasion before someone hacks Bitcoin.

I don't see how you can be sure of that.

Because it has been "hack-proof" for >10years now. If people who are a lot smarter and richer than me invest billions into Bitcoin why should I worry about something that we have zero evidence for? The reason why THEY invest in Bitcoin is because they know how secure it is. If there would be evidence that suggests it can just be hacked, nobody would invest a dollar in it.

IMO its more likely a meteor will hit me swimming in my pool than Bitcoin to be hacked by a clever person. I gladly take my chances and are willing to bet anything on it. I am happy to agree to disagree.

"No one can hack bitcoin"

-- read 15 articles per week about various forms of peoples bitcoin being hacked

"but that's not bitcoin, it's just the ECOSYSTEM!"

BWAHAHAHAHAHAHAHA

Zak says

"No one can hack bitcoin"

-- read 15 articles per week about various forms of peoples bitcoin being hacked

"but that's not bitcoin, it's just the ECOSYSTEM!"

BWAHAHAHAHAHAHAHA

That's exactly right @Zak, and thats the reason why people believe in Bitcoin's security. Since its existence there was not one incident where the Bitcoin code has been hacked. Thats why its considered "hack-proof".

That is fundamentally different from a hacker stealing bitcoin. If you leave your Bitcoin (or any other crypto) on an exchange, then it can be stolen through hacks.
There is a saying: not your keys, not your crypto.

To dumb this down: move your crypto to a cold storage/hardware wallet. Nobody can steal, hack or confiscate Bitcoin that is stored on a hardware wallet. Even if someone finds your hardware wallet, they can not access it without the private keys. :)

The fact that Bitcoin has no intrinsic value is not a problem. It is bought and sold for fiat currencies.

The fact that the dollar, euro, yuan, etc. have no intrinsic value, that's the problem.

Patrick says

I'm not talking about the 51% attack, but instead the ability to hash each block instantly.

Could happen. Never underestimate the power of a programmer.

Currently miners just solve the hash by brute force. I am sure some miners have already tried to tweak the basic algorithm to be the first. Like Enigma in WW2 it is a battle of cryptographers.

But Bitcoin is set up so the coins are released at a "Halvening" rate so that the scam can go on well beyond the lifetime of the HODLers.

Here's a narrative of the algorithm.

When the mining a block the Bitcoin mining algorithm works like this:

1. A block starts out with a header and a single transaction to pay the miner reward. This transaction has a special name (called the “coinbase”).

2. Transactions are added to the block.

3. A block “header” of fixed length is formed by doing cryptographic hashes of the transactions (called the Merkle root).

4. Mining uses SHA256 cryptography which breaks the data up into 64 byte chunks and operates on each chunk so there are 2 chunks and 2 steps to the SHA256 algorithm in this case.

5. The first sha256 step is performed on the first chunk of the header and that does not change. This is called the “midstate” because it is partway through the SHA256 process which is 2 steps in this case. The “midstate” is sent to the ASIC processor,

6. The second step of SHA256 is done on the second chunk of the header. This includes the nonce field. This is done on the Application Specific Integrated Circuit (ASIC) chip.

7. The entire solution is run through a second round of SHA256 and the solution compared to the difficulty (that is part of the block header). The nonce is returned if it meets the difficulty. This is done on the ASIC chip.
8. The nonce is incremented and the last 2 steps (6 and 7) are done again 2**32 times to exhaust all possible nonce values. This is done on the ASIC chip.

9. If no solution is found another nonce contained within the coinbase transaction is incremented. This changes the hash of the coinbase transaction and the merkle root

10. The process goes back to step 5 and continues until a solution is found.

https://cointext.com/glossary/mining/what-problem-is-solved-by-bitcoin-miners/?source=patrick.net

Currently the price is basically set by whatever the miners can get for the artificially scarce "Coin". I suspect the system will crash when a couple HODLer whales die and their heirs try to cash out only to find there is no there there.