Altcoins: The rapid rise of cryptocurrency

[Gaia]

Last week, for the first time, the market capitalization of cryptocurrencies reached about the $30 billion point. While the cryptocurrency industry has been booming for some time, this marks an important milestone for the relatively new area. It also reveals that cryptocurrencies are growing quickly, and the pace at which they are growing seems to be increasing as well.

The past few weeks have been incredibly bullish for cryptocurrency. The total market valuation continues to increase on a yearly basis. Bitcoin’s value goes up every day, but so is the value of most alt-coins. In fact, the entire top 7 of cryptocurrencies have seen increases over the past 24 hours. Monero is the only major altcoin to lose 0.47%, albeit that is almost negligible at this stage.

It will be interesting to see where things head next.... Governements pushing everyone to accept digital money even though they already do to he entire world will be on this new money... And the UN like it!

Ethereum or Lite Coin? The “elite” love Ethereum and hate Bitcoin, Lite Coin is the most popular alt-coin.


Imagine a world of frictionless business through crypto-environments.

Gaia


P.s. I did this thread and research because my 18 year old son confessed me last week that he only had that virtual money (cryptocurenncy) to buy a new computer. I have done a lot of research on this subject and I am not so familiar in a natural way. My son know better than me. If someone can add a pinch of salt and demystified all this for us....


https://coinmarketcap.com/currencies/litecoin/
https://www.ethereum.org/ and Blockchain/ https://www.ethereum.org/foundation
https://coinmarketcap.com/

Source: https://youtube.com/watch?v=InDtI4Gkhvk

Source: https://youtube.com/watch?v=OXm6py-T2dU

http://www.zerohedge.com/news/2017-0...style-collapse

http://www.zerohedge.com/news/2017-0...-buying-frenzy

https://www.cryptocoinsnews.com/bitc...sing-altcoins/

https://www.bitfinex.com/

[ThePythonicCow]

Hi Gaia,

This article, CryptoGold & Thieving Banksters, spells out in more detail a view similar to my own regarding cryptocurrencies. However that article is deeply enmeshed in the jargon of gold and silver bugs, so might be a bit of a head scratcher for "the rest of the world."

Let me try to summarize my view, in more neutral terms.

When I was a child, my mother collected S&H Food Stamps from the local A&P grocery store, good for future discounts on the food she bought. When I was an engineer in Silicon Valley, some of my colleagues collected Frequent Flyer Miles from various airlines, good for discounts on future air travel tickets. Now that I reside in a trailer park in North Texas, some of my neighbors clip coupons from the various flyers they get weekly in the mail, good for discounts on groceries.

These are all examples of speciality currencies, in either digital (the frequent flyer miles) or fairly low tech paper form (the S&H stamps and the coupons), each issued by, and (usually) honored by, some corporation.

Cryptocurrencies are rather like that, with a few important differences:

• Cryptocurrencies are not issued by any particular corporation, but rather by a rather nebulous network of independent computers on the global Internet running special programs that "create" new "money" at a rate constrained by the raw compute power required to run the deliberately difficult computations.
• Cryptocurrencies are not honored by any particular corporation, but rather there are a variety of individuals and businesses that will exchange cryptocurrencies for "real" money, such as Yen, Euro, Dollar, Ruble, or Yuan, or for real goods, such as computers or services sold over the Internet.
• Cryptocurrencies use a fairly robust crypto technology that the average common variety crook can't hack (unlike S&H Food Stamps, which they could have easily forged.)
• Cryptocurrencies are not controlled by any obvious corporation, but rather are (depending on your view) (1) ultimately free and independent of any centralized control, or (2) (my jaundiced view) subject to deep control by our elite overlords.

As with tulip bulbs and beanie babies, cryptocurrencies can be a useful means of transacting and of making a quick buck, during the rising part of the bubble, but will turn out to be a great way to lose money, rapidly, after the bubble collapses. I use cryptocurrencies myself, in this way, enjoying the profits and ease of transaction, but prepared to have them all go "poof" some night while I am sleeping.

Initially, I was also attracted to cryptocurrencies because I am a freedom lover, and cryptology, computer, and Internet geek, and I liked the pitch that cryptocurrencies could serve as the basis a global monetary system that was free of the influence of Mr. Global (Catherine Austin Fitts term for what I called our "elite overlords", above).

I still expect that my cryptocurrency transactions are and will continue to be anonymous, from the perspective of an untrustworthy neighbor or a local police investigator.

However I no longer expect my transactions to remain anonymous from perspective of the NSA, and I am now in agreement with Catherine Austin Fitts view (as quoted in my first link above):

That’s why the guys from bitcoin drive me nuts. Because they think “Oh this is how we’re going to be free“. No, you’re prototyping Mr. Globals digital currency.

The likely crash of the current crypto currency bubble (such as in Bitcoin and Ethereum) will almost surely be used as an excuse by our elite overlords to institute a "safer, more secure" cryptocurrency infrastructure that "no one" (known to the public) can surveil or compromise. They might then endeavor to make this new, wonderful, global cryptocurrency the common medium of exchange, replacing the "archaic" Yen, Euro, Dollar, Ruble, Yuan and such in use now.

[Gaia]

Thank you very much Paul, I found after many readings that this topic was fascinating and very little documented, except those who deal daily with this new currencies. I read somewhere and I do not find the link that it is a Canadian programmer of 23 years, passionate about the bitcoin, who invented it ... Ether is a virtual currency born only at the end of 2015, of a blockchain technology called Ethereum and entrusted to a foundation in Switzerland. It is a system close to that which allowed the development of the bitcoin, but also an invention taken seriously. Microsoft, JP Morgan and Intel joined forces in March 2017 to develop the very promising use of Ethereum. Is it our future? And finally what is the Blockchain protocol ?

Paul you make somehow our education for the neophytes that we are. Thank you!

http://fortune.com/2017/02/28/ethere...soft-alliance/

[Bubu]

Posted by Paul (here)
Hi
The likely crash of the current crypto currency bubble (such as in Bitcoin and Ethereum) will almost surely be used as an excuse by our elite overlords to institute a "safer, more secure" cryptocurrency infrastructure that "no one" (known to the public) can surveil or compromise. They might then endeavor to make this new, wonderful, global cryptocurrency the common medium of exchange, replacing the "archaic" Yen, Euro, Dollar, Ruble, Yuan and such in use now.

Not once did I deluded myself that there can be a fair exchange with money. Money is and will be use to control humanity. I dont pretend to understand money as much as Paul did but I know that we have to do away with it sooner or later.

[ThePythonicCow]

Posted by Gaia (here)
Thank you very much Paul.

You're welcome!

Posted by Gaia (here)
And finally what is the Blockchain protocol ?

Well, if I were talking to another computer geek, I'd say simply that the Blockchain protocol is the protocol for querying and updating a distributed Blockchain database.

However that will not be a useful explanation for many readers.

===

Most databases have one central, master, copy. All updates must be made to that central copy.

If I want to change my Avalon avatar from a cow picture to a horse picture, there are a few very specific bytes, within a large complex file known as a database, that lives on the ProjectAvalon.net server computer in Phoenix, Arizona, that must be changed. The interface that you or I or any member can use to change their avatar image will invoke some code running on the Avalon server that knows how to find and update those specific bytes, for that user.

That is a centralized database.

Your banks records of what you have on deposit with them, what you owe them, what deposits and withdrawals have been made so far, and what are scheduled to be made or requested in the future, are all in some centralized database that the bank maintains. When you withdraw money from an ATM, that transaction ends updating some records in that database, in "real time", as you make the withdrawal.

Centralized databases can get very big and complicated. They can end up being spread all over the planet, like the Google search engine database, that would let someone in Western Australia quickly find this particular post I am making here and now, shortly after I post it to Avalon. Google's search engine database is handling millions (or more, I don't know the actual number) of queries and updates per second, from all over the planet. But there is still one single, consistent, database of all the stuff that can be searched, and Google owns that database. If the rest of us don't like what Google keeps in that database, or refuses to put in that database ... tough ... there's not much we can do about that.

===

Bitcoin and other such cryptocurrencies don't use one centralized, trusted, database. Rather it uses a consortium of untrusted copies of the database. The "answer" to the question of who owns what Bitcoin is not decided by one trusted database, but rather by (essentially) a majority of the untrusted copies.

I own some bitcoin (well, a small fraction of one bitcoin), and I also have a copy of the bitcoin database on my personal computer, the computer I am typing into right now. But I could not "cheat" and get more bitcoin for myself by updating the record for my bitcoin account by messing with that record in my local copy of the bitcoin database, because all the other many copies, running on personal computers scattered all over the planet, would look at that change and see that it did not have a proper cryptographic signature from a sufficient number of the computers running the bitcoin server program.

===

So ... the Blockchain Protocol is the song and dance that my computer, and hundreds of thousands of other computers, are constantly going through, over the Internet, to decide who has what Bitcoin (or other such cryptocurrency). It enables these hundreds of thousands of computers, who have no reason to trust each other (indeed, have good reason not to trust each other) to come to a common, trusted understanding of who owns how much of a cryptocurrency.

At its lowest level, the Blockchain Protocol is a small number of different message formats that these hundreds of thousands of computers send each other, to request, agree to, and query changes to the record (of which they each have a full copy) of who owns what, and what transactions have been agreed to, moving some cryptocurrency from one person's holdings to anothers.

The "Blockchain" itself is that database, that is copied many times, on hundreds of thousands of computers, each computer (including my own PC) constantly updating their copy of the Blockchain to agree with the concensus as to who owns what.

[Sojourner]

I work at a futures trading firm and a few of the guys here trade alt coins. They call them "**** coins" and since new years there's been massive institutional buyers coming in buying tons. This is pretty much creating a mania where even the worst "**** coins" are gaping up 10000%. This stuff is definitely the future as it allows peer to peer financial transactions, thus eliminating the need for banks or brokerages, but people are getting a head of themselves at this point and right now its basically a bubble that's going to pop...

[ThePythonicCow]

Posted by Sojourner (here)
This stuff is definitely the future as it allows peer to peer financial transactions, thus eliminating the need for banks or brokerages,

Blockchain technology might allow such, in theory, but (1) it wouldn't technically work in practice on a wide spread basis, and (2) it won't be allowed.

1. Blockchain technology is inherently too slow and too computationally expensive to be supported in any one or a few planetary wide blockchains that every John, Dmitry, or Wang on the planet can personally and directly participate in using their smart phone, when paying for a cup of coffee or tea. There must be a hierarchy of payment networks and a concentration of shared computational and data storage financal services. Those shared services will be regulated and controlled by central authorities (or driven to very limited use at the fringes, as Bitcoin is currently.)
2. Der Wille zur Macht (the Will to Power) of the most powerful financial and monetary elite on this planet will not be suppressed, and they will use the coming crash and burn of the current crypto-currencies as yet one more justification for setting up "safe" replacements, safe from small time crooks and rogue governments and corporations, but very much under the (largely covert) control of the bankster elite.

Posted by Sojourner (here)
but people are getting a head of themselves at this point and right now its basically a bubble that's going to pop...

Yes - getting a head of themselves. I've been looking, casually, at stock and bond price charts for many decades, including briefly studying Modern Portfolio Theory and Elliott Wave Theory, and including making a pretty penny in both the Dot Com bubble in the 1990's, and the Real Estate bubble that peaked in 2008. I've never lost a significant sum in any such bubble, always getting out a year or two too early, rather than a week or two too late. I have just withdrawn a portion of my (itsy-bitsy-teenie-weenie) crypto-currency investment, equal in Dollar value to my initial investment. I'm still in, for more than I started with, but whenever I look at a chart and think "Wow - Cool - nice jump!", I'll likely pull a little more off the table.

[ThePythonicCow]

Posted by Sojourner (here)
there's been massive institutional buyers coming in buying tons.

Ah - I missed that detail on first reading. Thanks for reporting it. That's the "Pump!", which is usually followed by the "Dump!", like night follows day.

Unfortunately, unlike the sun's motions through the skies, the timing of these Pumps and Dumps is not as easy for me to predict just looking by looking at the hands on my old fashioned analogue watch. So I have to spread out my entries and exits, to avoid being wiped out, at the expense of missing the most spectular potential gains.

[Yetti]

Dear GAIA . my opinion on bitcoin or any other electronic money, is unsafe as it gets . Is the ultimate way from a bankster lobby who controls the government to own you. If the real mone ( cash) is eliminated they have total control over you, by forcing you to pay taxes and if you refuse, just by one click somewhere by someone you have no clue exist, you are banned to purchase anything anywhere and/or having no money at all. Think about it! if you have cash. the only way to take it from you is individually by force , and that leaves record and possible witnesses. Is just my opinion...

[Morbid]

hi Gaia. you'll find lots of opinions on the subject here. some more paranoid than others. myself & Paul disagree on the subject but hey, im not as clever as him so what do i know. all i can suggests is to do your own research & be careful of the environment as its like wild west at the moment. good luck!

[Justplain]

The ins and outs of bitcoin or other cryptocurrency, as described by Paul et al, sounds like an digitalized barter network to me. I investigated a localized barter network in my community in the 90's, which no longer appears to exist though others do, where services were exchanged with credits given that could be exchanged for other offered bartered goods/services. The only part that was cash was sales taxes had to be paid since the taxman wanted their share. My guess is bitcoin works like this, perhaps without the taxman part. It certainly sounds like this peer-to-peer computing aspect of cryptocurrency is databasing the 'credits' used in the barter system. Perhaps Paul can comment on this parallel.

Assuming that this is what is happening, if the supposed 'controllers' try to clamp down on this, just reverting to a localized barter network could be a way to circumvent any 'control' attempt.

[indigopete]

I don't think Bitcoin is in a 'bubble'. IMO it's probably undervalued by at least 10x at the moment based on its monetary properties compared to national currencies.

We need to ask the question: What is the single most significant basis for Bitcoin's intrinsic value ? Why does it exist at all ?

The answer is simple. It is the only existing asset in the world that is capable of functioning as a Bearer Token on an electronic platform. A bearer token is able to support the exchange of 2 attributes of an asset instead of just 1, in a single trade:

1. ownership
2. possession

Until 2009 there were no electronically transferable bearer tokens. You needed a counterparty to register the change in ownership and even then, only ownership - not possession could be traded. If we go back to the days of physical markets, pre-20th century, this monetary function was largely performed by precious metals (the 'gold coin'). They were the "bitcoin" of the day in a sense and their value accrued accordingly. It didn't accrue from being a nice shiny metal or intrinsic value or even its fungibility - it was pure monetary function. (What I notionally call 'monetary premium' = the exchange value in excess of utility value).

Since the wholesale migration of worldwide markets to electronic platforms, precious metals have lost this monetary capacity since they have a slight problem with travelling through wires. Their markets have subsequently split into two distinct, dysfunctional descendants:

1. a paper market that is unlimited in supply and where only ownership is traded
2. a physical market that is illiquid

I say 'illiquid' because the asset is not tradable in any mass electronic market. It requires physical proximity, people, vans, storage capacity and time. By comparison with the new generation of cryptographic assets it's a non-starter.

Finally, IMO, Catherine Austin Fits is very wrong in her assertion that "you’re prototyping Mr. Globals digital currency". The reason I say that is that people get hung up on the idea of 'electronic currency'. They tend to equate the fact that it's electronic with the idea of it being debt backed or centralised. This is a very superficial and dismissive view to take since the reality is that whether an asset is physical or electronic has nothing to do with its ability to be manipulated. What matters is who controls the supply and the extent to which it can be regulated. For example, gold is a physical asset but its markets are far more manipulable by central banks than bitcoin is. Maybe Catherine should ask herself why ?

The answer is the one I gave above: the ability (or lack of it) to function monetarily as a bearer token in mass market trading. That is the standard by which any new electronic money should be judged regarding its use as a 'tool of freedom'.

The 'electronic money' that people need to worry about isn't crypto, its credit money because that requires a counterparty. As an example, what could happen in a post-financial apocalypse potentially is a scenario such as this:

• worldwide debt bubble implodes with widespread bank defaults
• sovereign debt doesn't implode (because the PTB don't want ultimate confidence in central banks lost)
• instead of defaulting, the IMF takes over and freezes all deposit accounts worldwide
• over a period of a few days, they re-denominate deposits in a new unit (for example its own SDRs)
• banks re-open, everyone gets access to their money again but will find that their balances don't quite have the same purchasing power as before

In other words, the default is 'hidden' in the exchange rate from nation currencies to SDR and that way they get round both the problems of causing hyper inflation AND mass sovereign defaults AND direct bail-ins of customer deposits.

If you're holding something like Bitcoin, there's no chance of being affected by such a scenario because you're holding a native asset that cannot be redenominated. (Same with metals of course except that they are totally illiquid in their physical form and so have a big disadvantage over crypto).

Of all the people over the years saying bitcoin is some kind of 'globalist buyin', I tend to become increasingly more sceptical of them than the PTB themselves because they never directly address this very powerful resistance bitcoin has to manipulation. They always stick with this nonsense about it being 'electronic' while never explaining how that makes it any more susceptible to centralised control. The logic basically goes 'credit money is electronic, credit money is a scam, bitcoin is also electronic so bitcoin must be a scam'.

Well no. The latter does not follow from the former and the people who think it does are simply short on research IMO.

[ThePythonicCow]

Posted by indigopete (here)
... Bitcoin ... is the only existing asset in the world that is capable of functioning as a Bearer Token on an electronic platform.
...
Finally, IMO, Catherine Austin Fits is very wrong in her assertion that "you’re prototyping Mr. Globals digital currency". The reason I say that is that people get hung up on the idea of 'electronic currency'. They tend to equate the fact that it's electronic with the idea of it being debt backed or centralised. This is a very superficial and dismissive view to take since the reality is that whether an asset is physical or electronic has nothing to do with its ability to be manipulated. What matters is who controls the supply and the extent to which it can be regulated. For example, gold is a physical asset but its markets are far more manipulable by central banks than bitcoin is. Maybe Catherine should ask herself why ?

The answer is the one I gave above: the ability (or lack of it) to function monetarily as a bearer token in mass market trading. That is the standard by which any new electronic money should be judged regarding its use as a 'tool of freedom'.
...
If you're holding something like Bitcoin, there's no chance of being affected by such a scenario because you're holding a native asset that cannot be redenominated. (Same with metals of course except that they are totally illiquid in their physical form and so have a big disadvantage over crypto).

Of all the people over the years saying bitcoin is some kind of 'globalist buyin', I tend to become increasingly more sceptical of them than the PTB themselves because they never directly address this very powerful resistance bitcoin has to manipulation. They always stick with this nonsense about it being 'electronic' while never explaining how that makes it any more susceptible to centralised control. The logic basically goes 'credit money is electronic, credit money is a scam, bitcoin is also electronic so bitcoin must be a scam'.

Well no. The latter does not follow from the former and the people who think it does are simply short on research IMO.

We agree that debt-money is a tool of the elite, used to control us.

Claiming that Catherine Austin Fitts, or myself, are stuck on confusing "electronic money" with "debt money" is without foundation, so far as I know.

So long as the elite continue to have a strong upper hand in the monetary systems that human civilization uses, those systems will be controlled to the extent that the elite so makes them.

The claim that Bitcoin is special because it is a Bearer Token is a nice bullet item on the Bitcoin marketing glossy, but overlooks the essential problems with Bitcoin such as I have spelled out above.

Please read again what I (and Fitts) have written and said regarding Bitcoin. Your description of our logic, and grounds for dismissing our logic, are "short on research", meaning short on reading and understanding. Your description of what we have written and said grossly mischaracterizes what we have written and said.

¤=[Post Update]=¤

Posted by Justplain (here)
The ins and outs of bitcoin or other cryptocurrency, as described by Paul et al, sounds like an digitalized barter network to me.

I would use "barter" to refer to a system of exchange where goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money.

Bitcoin and other cryptocurrency are a medium of exchange, not the actual goods and services that might be bought and sold using Bitcoin.

So buying and selling goods and services using Bitcoin is, by definition of the word "barter", not barter.

[Morbid]

at the end of the day you'll always loose more using central banker's fiats as its where the masses are. its only wise to spread eggs into different baskets if you want to prepare for the upcoming financial showdown. personally i wish to have an advantage of available commerse of not depending on banks when shtf. Paul if you dont mind me asking, which instruments you keep your wealth in & in which proportions? im not asking figures, just percentages. thanks.

[ThePythonicCow]

Posted by Morbid (here)
at the end of the day you'll always loose more using central banker's fiats as its where the masses are. its only wise to spread eggs into different baskets if you want to prepare for the upcoming financial showdown. personally i wish to have an advantage of available commerse of not depending on banks when shtf. Paul if you dont mind me asking, which instruments you keep your wealth in & in which proportions? im not asking figures, just percentages. thanks.

I don't have much anymore, and it's mostly in a trailer, old car, computers, and tools to work on the trailer, car, and computers, and tools to do stuff with my food, water and health ... oh ... and a bunch of old papers and filings that I should throw out, from the days when my life was more complicated.

[Justplain]

Posted by Paul (here)

Posted by Justplain (here)
The ins and outs of bitcoin or other cryptocurrency, as described by Paul et al, sounds like an digitalized barter network to me.

I would use "barter" to refer to a system of exchange where goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money.

Bitcoin and other cryptocurrency are a medium of exchange, not the actual goods and services that might be bought and sold using Bitcoin.

So buying and selling goods and services using Bitcoin is, by definition of the word "barter", not barter.

Actually, Paul, i understand your definition of 'barter', but the way this network i am referring to operated sounds just like bitcoin. The 'credits' of the network were a medium of exchange. This is the way some of the other similar networks seem to operate that i have noticed, though not thoroughly investigated.

As far as what is best to invest in, i would suggest that having land, some gardening equipment and seeds. The rest of your investments can be generating conventional income cuz if everything crashes most other investments wont be worth a damn anyway.

[indigopete]

Posted by Paul (here)
The claim that Bitcoin is special because it is a Bearer Token is a nice bullet item on the Bitcoin marketing glossy, but overlooks the essential problems with Bitcoin such as I have spelled out above.

Please read again what I (and Fitts) have written and said regarding Bitcoin.

Paul -

I wasn't aware that you spelled out any 'essential problems'. You made a speculative prediction that there would be a cryptocurrency 'crash' (presumably you mean a crash in the exchange rate against fiat currencies rather than an actual failure of the asset as an electronic commodity) and that this crisis would be used to usher in a solution of choice that was easier to manipulate by a centralised entity. Did I understand correctly ? i.e. this...

Posted by Paul (here)
The likely crash of the current crypto currency bubble (such as in Bitcoin and Ethereum) will almost surely be used as an excuse by our elite overlords to institute a "safer, more secure" cryptocurrency infrastructure that "no one" (known to the public) can surveil or compromise.

There is quite a lot wrong with this assumption IMHO.

First of all, there is no "cryptocurrency bubble" to pop. The total amount of circulating debt-backed currency in the world amounts to between $50 and $80 trillion. Cryptocurrency market cap is but a blip on the horizon by comparison. See for example: http://money.visualcapitalist.com/al...visualization/

If the powers that be burst the 'cryptocurrency bubble' no-one's even going to notice, let alone go begging to the 'PTB' for a replacement.

Secondly, its decentralised nature means that most of the supply is not on exchanges. Nor is it in anyone's house, under any floorboards or in any particular location that it can be easily 'confiscated' or co-opted.

Thirdly, the word 'Bitcoin' as you of course are familiar with is really an umbrella term for a number of different blockchain based assets, all with different monetary and technical properties, many of which are fungible enough to be effectively untraceable and other which support decentralised exchanges. I don't think you can dismiss this diversity with a simple statement such as "The likely crash of the current crypto currency bubble...". Most people invested in bitcoin are well hedged in other assets - whether they be gold or different blockchain based assets.

I therefore don't see these 'essential problems' you're alluding to, other than in a notional sense who's basis is dependent on ignoring the sheer diversity and fundamental nature of what's happening in the cryptocurrency sector. If you think I've missed something, please feel free to point it out

[ThePythonicCow]

Posted by indigopete (here)
First of all, there is no "cryptocurrency bubble" to pop. The total amount of circulating debt-backed currency in the world amounts to between $50 and $80 trillion. Cryptocurrency market cap is but a blip on the horizon by comparison. See for example: http://money.visualcapitalist.com/al...visualization/

If the powers that be burst the 'cryptocurrency bubble' no-one's even going to notice, let alone go begging to the 'PTB' for a replacement.

Back in 2013, you were warning Avalon members, in this thread you started Developing - Bitcoin Bubble, that Bitcoin was potentially developing a bubble that members should not "even THINK about getting involved [in] - spectator sport only from this point on unless you're desperate for another mortgage."

That was back when Bitcoin (BTC) was rising from about $100/BTC to $200/BTC. Now that Bitcoin has risen from $724/BTC to $1727/BTC (over a $1000 rise!) in the last six months, you trying to sell us on the idea that Bitcoin is real money, in whatever terms you're using at the moment, "Bearer Token" or (as in this 2013 thread, base money).

Let me guess ... you've bought into the Bitcoin hype, and you've bought some Bitcoin yourself. So now you want to believe in Bitcoin, and you want others to believe in it too, so that the price keeps going up.

... just a guess .

In any case, the size (market cap) of a market does NOT determine whether or not it is in a bubble. The Beanie Baby certainly was in a bubble, over twenty years ago now. It was a similar sized, perhaps smaller, market than Bitcoin are now.

Whether or not something is in a bubble depends on the price action, the reasons for that price action (why people are buying and selling it), and to what degree that price action depends on reasons that can rapidly change, almost over night in some cases, turning a swarm of many eager buyers into a hoard of desperate sellers.

When (not if, in my view, but when) the financial powers that be (1) shutdown by legal or fraudulent action major Bitcoin exchanges, and (2) enforce Draconian "Know your customer" (KYC) regulations on any business transacting in or converting in or out of Bitcoin, then the "market value" of the world's Bitcoin will collapse. Most people won't even be able to access their Bitcoin anymore, because their Bitcoin was held by some service on the Internet that shut down, or bankrupt, or prohibited from allowing customer access to "their" bitcoin deposits except under compliance with KYC regulations. Those who do hold some Bitcoin on a personal server of their own may find that there is not much useful they can do with those Bitcoin ... such as purchase real goods and services.

Let me repeat the key item above: The size of a market does not determine whether or not it might be in a bubble.

You know that. I know that you know that. You yourself, back in 2013, when the Bitcoin market was one tenth the size it is now, posted multiple threads on Avalon, discussing whether or not Bitcoin was in a bubble!

Such threads as (in addition to your 2013 thread linked above):

• Amazing Bitcoin performance the last few months
• On Bitcoin, Tulip Mania, Volatility and the new World
• People's Bank of China decides Bitcoin isn't "nothing"

===

Posted by indigopete (here)
Secondly, its decentralised nature means that most of the supply is not on exchanges. Nor is it in anyone's house, under any floorboards or in any particular location that it can be easily 'confiscated' or co-opted.

I'd guess that anyone holding Bitcoin that they access using a smartphone holds that Bitcoin on an exchange or other such service, as I am not aware of any smartphone powerful enough to comfortably run a Bitcoin server itself.

And a key point I've been making, an "essential" point (that you seem to overlook repeatedly) is that Bitcoin in and of itself is not worth the bits its "printed" on, unless it can be exchanged for worthwhile goods and services.

Our financial overlords control those various means of exchange, and bomb the hell out of nations (such as Libya) that might try to evade that control. When our overlords decide it's time to "crack down on dangerously unsafe Bitcoin", perhaps to replace them with a "safe, secure, widely accepted" cryptocurrency, there is nothing that you or I can do to stop them, and the Bitcoin that you or I might hold will be worth dang well whatever "they" decide Bitcoin to be worth.

Posted by indigopete (here)
Thirdly, the word 'Bitcoin' as you of course are familiar with is really an umbrella term for a number of different blockchain based assets, all with different monetary and technical properties, many of which are fungible enough to be effectively untraceable and other which support decentralised exchanges. I don't think you can dismiss this diversity with a simple statement such as "The likely crash of the current crypto currency bubble...". Most people invested in bitcoin are well hedged in other assets - whether they be gold or different blockchain based assets.

When I say "Bitcoin", I mean "Bitcoin". When I say "current crypto currency" I refer to such cryptocurrencies as the 727 different cryptocurrencies, topped by Bitcoin and Ethereum, listed at CryptoCurrency Market Capitalizations (coinmarketcap.com).

I do expect that blockchain technology will become an important technology in the future of the world-wide monetary system implementation, as part of the implementation of the future major transaction processing systems between major financial institutions.

But that ignores the reasons, as I've provided above, why I expect the current cryptocurrencies to crash.

Moreover that has nothing much to do with whether or not current holders of Bitcoin and/or other cryptocurrencies might also hold other assets, such as gold.

To be honest, I find your rebuttals to be so confused and illogical as to not be worth the effort I have made to refute them.

Posted by indigopete (here)
I therefore don't see these 'essential problems' you're alluding to, other than in a notional sense who's basis is dependent on ignoring the sheer diversity and fundamental nature of what's happening in the cryptocurrency sector. If you think I've missed something, please feel free to point it out

I have pointed it out, repeatedly. I agree that you don't see it.

[indigopete]

Paul -

I appreciate that many of the points you make on the theme of the 'PTB shutting down bitcoin' may hold some veracity to various extents, but the reason I challenge them (and in particular Catherine Austin Fits's remark which I find to be positively negligent) is because they do not do any justice to the fact that the outcome is largely in our own hands.

Sure it’s true that bitcoin “could” crash if markets consider its capacity as a store of value hindered by adverse regulation. On the other hand, markets could just as easily value it up the way in a crackdown. It’s a tool, nothing more, and either we will properly understand and use it to our benefit or your ‘doomsday’ honeypot scenario will prevail. Of course we must always be sceptical of all innovations, but if it walks and quacks like a duck, there’s at least a possibility that it may actually be a duck. In that regard, the debate is far better served by illuminating some of the mechanics behind the scenarios you envisage and also by properly prioritising the relative importance of bitcoin 's various monetary characteristics.

First of all, lets consider this statement:

Posted by Paul (here)
The claim that Bitcoin is special because it is a Bearer Token is a nice bullet item on the Bitcoin marketing glossy, but overlooks the essential problems with Bitcoin such as I have spelled out above.

The logic of that is kind of like saying that there was no point in holding gold in the 1930’s because it was outlawed. In fact the only reason The Gold Reserve Act came into being is because there *was* a point in holding it - at least from the citizen’s perspective if not from the state’s. The reason was because it was a store of value that did not depend on counterparty endorsement. (i.e. was unbacked, the very definition of a bearer token).

This monetary characteristic is therefore far more than a “nice bullet item” and characterising it as such is akin to describing the fact that an aeroplane can sustain flight as a “nice bullet item”.

Now lets examine your argument that the bitcoin will crash due to the widespread imposition of adverse state controls in its trading, exchange and access to wallets. If you re-read the various anecdotal bases you give to support this you’ll find they amount to a crackdown on counterparties:

Posted by Paul (here)
I'd guess that anyone holding Bitcoin that they access using a smartphone holds that Bitcoin on an exchange or other such service, as I am not aware of any smartphone powerful enough to comfortably run a Bitcoin server itself….hen (not if, in my view, but when) the financial powers that be (1) shutdown by legal or fraudulent action major Bitcoin exchanges, and (2) enforce Draconian "Know your customer" (KYC) regulations on any business transacting in or converting in or out of Bitcoin, then the "market value" of the world's Bitcoin will collapse

This is where I take issue with the line of reasoning. If there’s a state crackdown on counterparty services, then the logical ‘safe haven’ for capital flight is into counterparty-free assets. Many of those will be tangibles but on an electronic platform, bitcoin is the only candidate. So your argument stands itself on its head.

Your good self and CAF are hung up on the fact that its electronic and not much else in my humble opinion. In fact the significant characteristic of the network is that they can shut down all the bitcoin exchanges, merchant intermediaries, hot wallet providers and statutory frameworks they like and it won’t make a blind bit of difference to the tradability of bitcoin.

Posted by Paul (here)
I'd guess that anyone holding Bitcoin that they access using a smartphone holds that Bitcoin on an exchange or other such service, as I am not aware of any smartphone powerful enough to comfortably run a Bitcoin server itself.

With respect, I think you’re confusing a ‘wallet’ with a full node here. As I’m sure your aware, bitcoin ‘wallet’ is no more than a private key to a public address. For that matter one doesn’t even need a computer to hold it. It’s a string of characters that I can write down on an envelope and trade in a pub over a beer. It’s true that the network does need full nodes to run but as long as there’s a couple of hundred of these running somewhere in the world (there are currently tens of thousands) then the network can function. Nor are they static - they can pop up anywhere like mushrooms after a rain shower. There’s more chance of state regulation eradicating the phenomenon of email spam then ever ensuring that such a decentralised network goes out of existence.

IMO, people who say that “bitcoin will just crash when it’s gets big enough” need to provide far better arguments than those that yourself or CAF have up till now, because being counterparty-free and decentralised it happens to be one of the most effective means to store value outside of the banking system and therefore amounts to a lifeboat in an impending storm.

Excerising a healthy caution should not mean that we all have to go “down with the ship”.

Finally, a bit of topical humour that may be relevant https://www.youtube.com/watch?v=Ry6PpRXk0dQ

[ThePythonicCow]

You're doing a bloody fine job of muddying up the waters, indigopete. Any clarifications or corrections I offer seem to just provide you with more opportunity to confuse matters.

So the best I can do is to cease providing further such opportunities.

Over and out.