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The philosophical origins of Bitcoin’s civil war

solarion

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Gold has been consolidating for years that bitcoin has been ramping higher...
So we're clear, you're saying paper gold did not go from 1455 to 2070(+42.3%) during the period beginning 3/16/2020 and 8/3/2020? ...I happen to know that it did, so I guess I'm asking why you're saying it didn't when I know it did. Paper silver was as low as 12 bucks in March of 2020 and is now over twice that. It's actually bitcoin that has done little since then. It seemed clear to me by Feb of 2021 that bitcoin was overbought and would be taking a nap and that the metals were going to run...and I said as much at the time while I was putting my money where my mouth is.

Gold consolidated from August of 2020 to January 31 of 2022 and is now running again. You really should update your charts...they seem to be malfunctioning.

Gold and silver have an established relationship and ratios can make sense, but no such thing exists with gold and crypto.
Is this to say that because you don't recognize how maths work that you refuse to acknowledge maths? A ratio is one number divided by another. It's not real tough to calculate. You even quoted me listing ratios from a year ago and today...where do you suppose I got them from? The beauty of not liking fiat dollars is that I needn't think in fiat dollar terms all the time.
 

ds_mustang

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So we're clear, you're saying paper gold did not go from 1455 to 2070(+42.3%) during the period beginning 3/16/2020 and 8/3/2020? ...I happen to know that it did, so I guess I'm asking why you're saying it didn't when I know it did. Paper silver was as low as 12 bucks in March of 2020 and is now over twice that. It's actually bitcoin that has done little since then. It seemed clear to me by Feb of 2021 that bitcoin was overbought and would be taking a nap and that the metals were going to run...and I said as much at the time while I was putting my money where my mouth is.

Gold consolidated from August of 2020 to January 31 of 2022 and is now running again. You really should update your charts...they seem to be malfunctioning.


Is this to say that because you don't recognize how maths work that you refuse to acknowledge maths? A ratio is one number divided by another. It's not real tough to calculate. You even quoted me listing ratios from a year ago and today...where do you suppose I got them from? The beauty of not liking fiat dollars is that I needn't think in fiat dollar terms all the time.
Attached is a graphic of two charts, one is a monthly chart of bitcoin/USD (a typical price chart), the other is bitcoin/gold. I challenge you to tell me which is which because they're nearly identical. So like I said, I call shenanigans. You must be using that "new" math. Although I'm sure it works as well predicting the future as anything else traders use.

However if you look at a long term ratio chart of gold/silver there arguably is information there as to when one is overvalued vs the other distinct from mere price and with ranges that go back 100 years.
 

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solarion

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What you don't seem to be understanding is the concept of time. See, when I make decisions day to day, I get to consider both, that which has come before and that which I believe probable going forward. When I do these things and I have assets that have run up dramatically, I tend to begin taking profits so that those profits do not disappear. Are you with me so far?

Now since I do not want fiats, I tend to swap things that have run up for things that I do want that haven't run up, but I believe will run up at some point. I keep trying to explain the concept of risk management to you, but you seem so fixated on what happened with crypto a year ago that you're unable to accept new information.

I guess that's why you chose to ignore the comments about gold running up 42% vs fiat in just five months after being proven wrong. Perhaps I wrongly assume we both have access to the same historical data?
 

ds_mustang

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What you don't seem to be understanding is the concept of time. See, when I make decisions day to day, I get to consider both, that which has come before and that which I believe probable going forward. When I do these things and I have assets that have run up dramatically, I tend to begin taking profits so that those profits do not disappear. Are you with me so far?

Now since I do not want fiats, I tend to swap things that have run up for things that I do want that haven't run up, but I believe will run up at some point. I keep trying to explain the concept of risk management to you, but you seem so fixated on what happened with crypto a year ago that you're unable to accept new information.

I guess that's why you chose to ignore the comments about gold running up 42% vs fiat in just five months after being proven wrong. Perhaps I wrongly assume we both have access to the same historical data?
So then you're trading random short term price fluctuations, not meaningful long term ratio data. You've fooled yourself into thinking you're doing something meaningful, but really you're just selling after "price go up." And that's been my point. You can buy at any point along the chart and sell for a profit later because bitcoin keeps going up. But you're not adding value. And I claim you're losing value compared to just holding--a LOT of value.

At least now you know you don't need to bother calculating bitcoin/gold ratio, you can just use bitcoin price. That ratio isn't meaningful because bitcoin isn't cycling in value relative to gold, it's mostly just going up up up.

There are cycles you might look at... but the ratio with gold isn't one of them IMO. Here's an interesting one:

Here's a more watched one:
 
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solarion

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So then you're trading random short term price fluctuations, not meaningful long term ratio data. You've fooled yourself into thinking you're doing something meaningful, but really you're just selling after "price go up."
Yes! Totally random moves! There's absolutely no way ever to spot trends or trade them over the course of 3 or 6 months. I totally got lucky...over and over! ...and the fact that I explained precisely what I was doing, why I was doing it, and when I was doing it here on this very website in a conversation you were involved in over a year ago...is likewise just a coincidence.

Trading stuff is teh harrrrrd. lol

1647977701660.png


At least now you know you don't need to bother calculating bitcoin/gold ratio, you can just use bitcoin price. That ratio isn't meaningful because bitcoin isn't cycling in value relative to gold, it's mostly just going up up up.

1647977784262.png


Let me try again...because apparently it's complicated for you. If a bitcoin is worth 58,330 fiats on 2/21/2021 and an ounce of gold is worth 1784 on the same date...and I swap them at those prices...and the former subsequently drops(it did), while the latter simultaneously rises(it did), then I've literally increased my wealth. It's not a sideways move...it's a profitable trade. ...and yes the profit is due to the fact that bitcoin literally "cycled" relative to gold during that period. Bitcoin has declined by 22.4% while gold has risen 8.3% during the same.

1647978394798.png


Whatever you do...never try trading forex...methinks you'd lose your shirt.
 

ds_mustang

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Yes! Totally random moves! There's absolutely no way ever to spot trends or trade them over the course of 3 or 6 months. I totally got lucky...over and over! ...and the fact that I explained precisely what I was doing, why I was doing it, and when I was doing it here on this very website in a conversation you were involved in over a year ago...is likewise just a coincidence.

Trading stuff is teh harrrrrd. lol

View attachment 251511



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Let me try again...because apparently it's complicated for you. If a bitcoin is worth 58,330 fiats on 2/21/2021 and an ounce of gold is worth 1784 on the same date...and I swap them at those prices...and the former subsequently drops(it did), while the latter simultaneously rises(it did), then I've literally increased my wealth. It's not a sideways move...it's a profitable trade. ...and yes the profit is due to the fact that bitcoin literally "cycled" relative to gold during that period. Bitcoin has declined by 22.4% while gold has risen 8.3% during the same.

View attachment 251515

Whatever you do...never try trading forex...methinks you'd lose your shirt.
I love the charts with the arrows drawn on prices from the past. If only you could pick buy/sell points as easily on prices that haven't happened yet. Every trader has their stories of their winning trades ready to explain in detail... no mention of the losers though.

So while you try to predict the future, hodlers will continue to outperform you by 1000x by just having control of their fears. And 1000x might be an understatement.
 

solarion

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lol It's hopeless. You're obviously going to continuously ignore things that are said just prior, so that you can pretend nobody can ever predict 50% crashes on parabolic moves to the upside. ...or that risk managment isn't really a thing.

I am a hodler btw. I even have some ETH...even though I think it will fail long term. I realize you also think these things are binary, but that's not how my mind works. I function on risk/reward probabilities. When the probability was that gold would outperform bitcoin...I jumped ship with some portion of my bitcoin holdings...and yes it was the right move.
 

ds_mustang

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lol It's hopeless. You're obviously going to continuously ignore things that are said just prior, so that you can pretend nobody can ever predict 50% crashes on parabolic moves to the upside. ...or that risk managment isn't really a thing.

I am a hodler btw. I even have some ETH...even though I think it will fail long term. I realize you also think these things are binary, but that's not how my mind works. I function on risk/reward probabilities. When the probability was that gold would outperform bitcoin...I jumped ship with some portion of my bitcoin holdings...and yes it was the right move.
Tell us about a wrong move. Or are all your moves right?

People that are trying to avoid downside all face the same problem... as soon as their investment starts to fall they have to wonder if this is the downside they were trying to avoid, so they end up selling on a down move to avoid risk. Then if it rebounds, they have to chase because they're not long anymore and have to buy back in. The result is selling dips and buying rallies, a great way to lose money and the exact opposite of what successful trading requires. Those that successfully buy dips and sell rallies can't be trying to avoid the downside. So when you tell me you're trying to avoid downside, I'm quite certain you're not doing as well on your trades as you would have everyone think. You simply have the wrong goal for trading. Traders must embrace risk, even seek it.
 
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solarion

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You simply have the wrong goal for trading. Traders must embrace risk, even seek it.
Says the confessed non-trader. lol

Tell us about a wrong move. Or are all your moves right?
Of course. I've made lots of wrong trades...that's the case in roughly 30% of my option trades...which are the most speculative trades I make. Thing is, when I win I tend to win big and when I lose I tend to lose small. IOW, I manage risk.

I post these trades in a thread I started last year btw.


The macro trades I make that are non-speculative tend to be very conservative. Swapping some bitcoin for metals from 58k to 68k wasn't risky at all imo...it was a no-brainer...despite your seemingly being mystified.
 

ds_mustang

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Says the confessed non-trader. lol


Of course. I've made lots of wrong trades...that's the case in roughly 30% of my option trades...which are the most speculative trades I make. Thing is, when I win I tend to win big and when I lose I tend to lose small. IOW, I manage risk.

I post these trades in a thread I started last year btw.


The macro trades I make that are non-speculative tend to be very conservative. Swapping some bitcoin for metals from 58k to 68k wasn't risky at all imo...it was a no-brainer...despite your seemingly being mystified.
I'm a non-trader in crypto because I spent 20 years trading and know what works and what doesn't. I even had client-subscribers with over $2 million under management at one point. But you simply can't beat holding on an asset that moves like crypto--that's why I don't trade crypto.
 

solarion

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WOW...two whole million!?! Amazed I am.

...and you don't understand how ratios work? Seems safe to assume then that you've zero experience with forex trading. It's surprising that you're seemingly unable to appreciate that at some point crypto investors will be looking to cash out for risk off assets...like physical gold. I can assure you, I'm not the only ever that has stared at a crypto wallet full of bitcoins worth 60k apiece and contemplated how many ounces of physical gold it can be converted into. It's dead simple logic.
 

ds_mustang

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WOW...two whole million!?! Amazed I am.

...and you don't understand how ratios work? Seems safe to assume then that you've zero experience with forex trading. It's surprising that you're seemingly unable to appreciate that at some point crypto investors will be looking to cash out for risk off assets...like physical gold.
Not bad for a guy whose main job is software development. Had around 200 small client-subscribers--ordinary folks with small self-directed accounts, not bankers.

I know enough about Forex to avoid it. The pattern in forex is smaller traders make small amounts of money until one day the big guys literally destroy them overnight.

And I don't agree crypto holders will one day be looking to cash out. Crypto is a new asset class and it's very useful in today's world of monetary insanity. The pattern we're seeing is a new emerging asset class... something that hasn't happened in my lifetime. Massive amounts of value moving into something entirely new from people all over the world. You want as much value in crypto as possible during this rare period, and you don't want to trade. Once the asset class matures then maybe trading makes sense. But we've got a way to go until then. We're still in adoption... just breaking out of early adoption to mainstream adoption IMO.
 
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solarion

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The big guys destroy the little guys in every market. When hedge funds/commercial banks lose, they simply get their pet regulators to call a pause and/or change the rules.
 

ds_mustang

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The big guys destroy the little guys in every market. When hedge funds/commercial banks lose, they simply get their pet regulators to call a pause and/or change the rules.
True, but forex is so much leverage. And the moves are all very nice and controlled... until they're not.
 

solarion

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That's certainly true. As to leverage, I've leveraged positions on call options on leveraged ETF shares...so yeah...that's how I roll with speculative bets.
 

ds_mustang

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That's certainly true. As to leverage, I've leveraged positions on call options on leveraged ETF shares...so yeah...that's how I roll with speculative bets.
Crypto has been so good to me and things like DeFi are so new and interesting, I've lost interest in the wall street market. When all you've seen your whole life is a managed market, seeing an actual free market is exciting.
 
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solarion

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Good luck with that. I've watched all the centralized crypto exchanges be killed one by one over the years till there's nothing left save corporate garbage IPOs with KYC gatekeepers. Crypto security markets...dead. Crypto bond markets...dead. Gumbymint goons ruin everything in the name of keeping their predatory debt dollar scam running for as long as possible.

Anyway, we're heading into a sustained high inflationary environment with multiple hyperinflations happening simultaneously around the world. Cryptos in general will yield to less speculative stores of purchasing power imo.

1647987184853.png
 

ds_mustang

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Good luck with that. I've watched all the centralized crypto exchanges be killed one by one over the years till there's nothing left save corporate garbage IPOs with KYC gatekeepers. Crypto security markets...dead. Crypto bond markets...dead. Gumbymint goons ruin everything in the name of keeping their predatory debt dollar scam running for as long as possible.

Anyway, we're heading into a sustained high inflationary environment with multiple hyperinflations happening simultaneously around the world. Cryptos in general will yield to less speculative stores of purchasing power imo.

View attachment 251543
Sure, you've probably never actually used a smart contract crypto so you have no idea what's going on. Most people are still in the mode of speculating on tokens like it was some horse race. Until you actually USE a DEX, or a lending/interest protocol, farmed, etc. you don't see what is really happening out there. There's no reason to use centralized exchanges anymore. There's an entire free market financial system out there running decentralized and even most the people who have crypto have never seen it.
 

solarion

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That's nice. It won't of course mean much when the tech sector resumes its bear market downturn and cryptos drop with it.

While I continue to believe cryptos will rally again to new highs...maybe even your pet buterin token...it won't be for some while imo. They're successfully hitched to the banksters derivative products for now. So you conintue to hodl and rack up those losses bruh.

I'll continue to keep a stack of select cryptos, but I see no reason to be a financial martyr.
 

ds_mustang

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That's nice. It won't of course mean much when the tech sector resumes its bear market downturn and cryptos drop with it.

While I continue to believe cryptos will rally again to new highs...maybe even your pet buterin token...it won't be for some while imo. They're successfully hitched to the banksters derivative products for now. So you conintue to hodl and rack up those losses bruh.
DeFi keeps working even in a bear market. If you don't want to hold a smart contract token because of the down market, then don't. Once you get a little of the main chain token you move it off the centralized exchange into your own wallet (maybe having to use a bridge). Then you use a DEX and buy stablecoins: USD, gold, Euro, whatever. It doesn't have to be a lot, just some fun money to experiment with. Then you put them on a lending or investment protocol for income, provide liquidity to a DEX and get paid for it, take a loan against your stablecoin that magically pays itself off over time, whatever. Depending what you do you can make 10% or more on your stablecoin, and sometimes get paid bonuses in other coins just for participating. It's decentralized--nobody will ask for your email let alone your name. It doesn't have to be ETH, there's Polygon, Solana, Avalanche, and maybe some other chains up and running by now. I've used DeFi on Ethereum, Polygon, and Solana. I'm going to try Avalanche at some point. Youtube has a lot of videos describing how to do all this.

Someone told me I wouldn't appreciate what was happening until I used it myself, so I did and they were right.
 

solarion

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All of that sounds swell, but I'm not suggesting the tokens will stop working, I'm suggesting they'll fall in value relative to other stuff. Cryptos just saw a nice little rally with the tech sector on what is truly horrible economic news. Eth is up nearly 37% from the recent bottom...suggest people take some profits here and move into stuff that isn't going to get slaughtered in a high inflationary, rising rate, low growth environment that's filled with geopolitical/counterparty risk. IOW PMs.
 

ds_mustang

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All of that sounds swell, but I'm not suggesting the tokens will stop working, I'm suggesting they'll fall in value relative to other stuff. Cryptos just saw a nice little rally with the tech sector on what is truly horrible economic news. Eth is up nearly 37% from the recent bottom...suggest people take some profits here and move into stuff that isn't going to get slaughtered in a high inflationary, rising rate, low growth environment that's filled with geopolitical/counterparty risk. IOW PMs.
I understand, that's why I suggested just using mainchain coins to get started then swap to stablecoins. Stablecoins don't lose value as crypto falls, and you can still explore, make income, take loans, etc. You can even buy gold stablecoin that are exchangeable to physical but can make income. You only need to hold a small amount of mainchain token for fees. And you don't need to put much in anyway to see how it works, especially for the less expensive chains.

Smart contact crypto aren't about one coin, they are communities of coins working together to create a decentralized ecosystem. Those ecosystems don't need centralized services, they function regardless of bull market or bear market, there is incredible opportunity there, and IMO they are going to change the world.

Once you start looking into it, and it's a very big world with a lot to learn, you'll get a glimpse into the future. These are communities and technologies that only started a year or so ago--this is the cutting edge of crypto. It's not clear exactly how it will evolve, but you'll see the potential is enormous. You'll discover how wrong-headed most of the thinking about crypto is right now. You quickly understand the scale of infrastructure and development that is coming... and will be required. And you'll start to understand how much bitcoin is lacking on on its own to actually change anything.
 
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solarion

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Clearly the largest stablecoin is tether and it's allegedly pegged to the US dollar using some shady financing...which is precisely what one should be trying to avoid. The Euro is probably a worse place to be. Where's the incentive to do all this swapping instead of simply dumping cryptos and buying physical metal? ...which one can simply and easily swap for bullion online anyway?
 

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Clearly the largest stablecoin is tether and it's allegedly pegged to the US dollar using some shady financing...which is precisely what one should be trying to avoid. The Euro is probably a worse place to be. Where's the incentive to do all this swapping instead of simply dumping cryptos and buying physical metal? ...which one can simply and easily swap for bullion online anyway?
So don't buy Tether. Tether was created before DeFi existed. It's old, centralized tech. It has almost nothing to do with what I'm talking about. If you want to understand the future of crypto that is coming and what it will look like, take a look. Or don't. But IMO what is happening is bigger than Bitcoin ever was, and few people know it exists yet.
 

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Where's the incentive to do all this swapping instead of simply dumping cryptos and buying physical metal? ...which one can simply and easily swap for bullion online anyway?
The question of everyone dumping crypto to buy physical metal is a big one. I think a lot of people will buy gold as monetary trouble happens. Gold is the premier, real store of value with an impeachable historical validity. However we no longer spend the majority of our lives in small local communities like we did hundreds of years ago. There are a number of limitations gold has that make it less attractive in today's world, so I don't think it's as simple as predicting that "gold wins."

In particular gold is difficult to move and store. It doesn't work online. It's not suitable for small or most ordinary transactions. It's not something you want to carry around. Gold requires expertise to validate authenticity. It can be confiscated. It requires trusted third parties to facilitate many sorts of exchanges and pretty much all higher level financial functions. All of these limitations have historically been addressed to some degree by centralization, trust, authority, regulation, etc. But today all those limitations can be addressed by crypto without centralization, trust, authority, regulation, etc.

The ordinary guy on the street already knows what crypto is an can buy it in their phone apps. The same guy would have no clue where to get a gold coin or what to do with it if he was given one. So where is that guy going to run when fiat starts falling apart?

If you're an ordinary salaried Joe you just want to have your salary keep up with inflation and your financial cards work so you can pay your bills. Gold itself does nothing for you without a financial system already structured to use it. Unfortunately there is no such financial infrastructure build for gold and if there was it would require centralization, trust, authority, regulation, etc. Crypto is building that financial system now and it doesn't require centralization, etc.

If you're rich, are you going to sink all your excess funds into gold when it needs special storage/management, can be physically confiscated, and there's no easy way to relocate with it if things go sideways? Crypto solves that.

Bottom line I think crypto solves too many issues that both gold and fiat have to ever go away. So no, I don't see everyone dumping crypto to buy physical metal. I see them dumping fiat to buy a variety of things... mostly durable consumer goods, legacy investments, and also gold and crypto.
 
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solarion

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That's a lot of words, yet when I suggested cryptos wouldn't do well in the current economic environment you launched into a bit about how people could swap them for stable coins.

Do you believe cryptos will be an effective store of purchasing power in the current environment? How about going forward?
 

ds_mustang

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That's a lot of words, yet when I suggested cryptos wouldn't do well in the current economic environment you launched into a bit about how people could swap them for stable coins.

Do you believe cryptos will be an effective store of purchasing power in the current environment? How about going forward?
We're talking about crypto on two different levels. You're talking about a horse race of crypto tokens and their prices. I'm talking about crypto as an ecosystem with a focus on how it provides a new financial system. In an ecosystem of crypto there are many services and options to choose from depending on your needs including stablecoins. So since you mentioned you were worried about a crypto bear market, I suggested you look into stablecoins and DeFi as those are part of the ecosystem that won't drop in value.

Do I think cryptos will be an effective store of value in the current environment and going forward--some of them, yes. Because crypto (or smart contract crypto anyway) is much more than just a token with a price--it's an entire ecosystem which includes a decentralized financial system, and that's an incredible amount of value. Technologies in crypto like stablecoins can be as stable as any asset you choose as they are able to proxy the value of other assets. Technologies like lending/borrowing/exchanges, etc are highly valuable because the functions of banks and wall street are valuable, especially when they are open to everyone. And because coins like ETH are required to use the protocols that power the crypto ecosystem that drives stablecoins, DeFi, and other technologies, ETH will continue to have value as long as people want to use those technologies. There is a chance some future smart contract crypto might take over as a better technology, but that's the risk of high tech.

Regardless I don't see crypto going away or losing significant value--it's too useful. I expect crypto value to continue to expand as the world's financial and monetary systems are swallowed and displaced by functions in the crypto ecosystem.

Bitcoin I'm not as sure about, but I think it will have appeal being the first crypto. It's sort of like a collectable and collectables have value. It also has some limited functionality as a basic banking system replacement. Also there are a number of governments now looking seriously at bitcoin because bitcoin is a lot less threatening to them than smart contract crypto. So maybe bitcoin gets a boost from governments trying to keep crypto as "just an asset" rather than having their entire financial systems challenged by new crypto tech. But that's all a guess.
 
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solarion

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Technologies in crypto like stablecoins can be as stable as any asset you choose as they are able to proxy the value of other assets.
That's unrealistic, as you're increasing counterparty risk.
 

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That's unrealistic, as you're increasing counterparty risk.
There are decentralized stablecoins. They don't have counterparty risk like you think. They might have systemic risk in that the protocol might have a bug (like with any smart contact), but there are no counterparties.
 

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Apparently crypto is now the new Great Satan and must be 'regulated'

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Nomis Elpmis

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IMO, war is net bad for crypto as a whole. Will speed up and increase the magnitude of regulations. BSV bitcoin has been distancing itself from 'crypto' and has been regulation compliant from it's beginning. It's naïve to believe code is law. Law is law.
 

ds_mustang

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IMO, war is net bad for crypto as a whole. Will speed up and increase the magnitude of regulations. BSV bitcoin has been distancing itself from 'crypto' and has been regulation compliant from it's beginning. It's naïve to believe code is law. Law is law.
When you talk about "law" that implies a jurisdiction and there are hundreds of those with very different "law", so what you're saying doesn't make much sense. There will be jurisdictions that are crypto-friendly and jurisdictions that are crypto-unfriendly. Places that care about investment, development, and freedom will remain crypto-friendly and that's where you want to be. If my jurisdiction becomes unfriendly to crypto, I'll go somewhere else.
 

Nomis Elpmis

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When you talk about "law" that implies a jurisdiction and there are hundreds of those with very different "law", so what you're saying doesn't make much sense. There will be jurisdictions that are crypto-friendly and jurisdictions that are crypto-unfriendly. Places that care about investment, development, and freedom will remain crypto-friendly and that's where you want to be. If my jurisdiction becomes unfriendly to crypto, I'll go somewhere else.
Yeah. I guess you can move to some remote country. The noose is tightening in Canada, Singapore and Japan.
https://www.coindesk.com/business/2...ers-from-users-in-canada-singapore-and-japan/
 
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ds_mustang

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Yeah. I guess you can move to some remote country. The noose is tightening in Canada, Singapore and Japan.
https://www.coindesk.com/business/2...ers-from-users-in-canada-singapore-and-japan/
I expect the future will be shaped and driven by crypto. So places that are crypto friendly, rather than being "remote", will be where the future is made.

On a related note, the dollar {and perhaps the West) is in decline. And the way things are going in the bigger western countries you might not want to be there anyway. In a time of big change, being flexible, mobile, and having options is a probably a good thing.
 

Nomis Elpmis

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I feel Solarian's and ds_mustang's back and forth might be illustrating the topic of the original post. A 'constrained vision' of crypto vs an 'unconstrained vision' of crypto respectively. Myself, I am firmly in the 'constrained vision' camp. Here's another article I just posted that uses this 'framework' to understand the different camps.
 

ds_mustang

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I feel Solarian's and ds_mustang's back and forth might be illustrating the topic of the original post. A 'constrained vision' of crypto vs an 'unconstrained vision' of crypto respectively. Myself, I am firmly in the 'constrained vision' camp. Here's another article I just posted that uses this 'framework' to understand the different camps.
Except I'm talking about things that largely already exist. Arguing against the vision of smart contracts as too big, or too unlikely needs to be tempered by the reality of what has actually been accomplished. My suggestion to Solarian and you is to actually go and use what exists--see what is already happening out there.

It's also worth noting that Ethereum (and subsequent smart contract crypto) haven't been trying to invent the world. They started with the simple idea of implementing a generalized ownership model based on what bitcoin created rather than having one limited to just "coins." What then gets created on that generalized model is up to developers in the future . So you end up with a simple programmable base with a lot of potential--A PLATFORM, like the smart phone and internet. Then you let the future developers discover what is possible and what isn't.

It was clear with both the internet and smart phones that what people would make on those platforms would be much bigger than the original creators of the planforms imagined. The same goes with smart contract crypto. It's only been a few years and what exists is quite stunning, and it's going to keep expanding.
 
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solarion

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...and what you seemingly fail to take into account is the base use case for crypto currencies. You like defi and you like smart contracts...and that's just great. However, that is not why the vast majority of the masses buy crypto currencies. They swap fiat for crypto currencies not for the crypto currencies themselves, rather they swap fiat for cryptos because of the possibility of redeeming them for more fiats later.

In this case there is a significant risk of lost value relative to other things of perceived value. You continuously gloss this over by making it seem as though risk = zero with crypto currencies, and that is simply not realistic.

There are decentralized stablecoins. They don't have counterparty risk like you think. They might have systemic risk in that the protocol might have a bug (like with any smart contact), but there are no counterparties.
Since I don't seem to be getting through to you with regard to how risk management works, let me try a different approach. Let me ask you a simple question.

Is bitcoin money? Now I don't need to know how many desirable qualities of the best money that bitcoin checks off, what I want to get at is why people value bitcoin. From there, I would hope, that we could all agree every other crypto currency...including ethereum has risk that is > bitcoin risk. If that's the case, then tell me please where bitcoin and a theoretical ethereum 3.0 would belong on Exeter's pyramid.

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It most certainly is not at the bottom with physical gold and silver. Now one could make the case that bitcoin's risk is somewhere between base and bank currency. ...and if so, then ethereum 3.0 MUST be some point higher on this inverted pyramid and therefore more risky.

Bitcoin is in many ways a debt dollar derivative. What many miss is that the dollar is a derivative of gold. The US dollar quite literally has value worldwide due to the pile of gold the US amassed over time, particularly between and during the two world wars. There is no asset with less risk than physical gold and silver because the vast majority of people want gold and silver, not because of what they can buy, but because they desire that thing itself.

Certain commodities came to be money quite naturally, as the result of economic relationships that were independent of the power of the state.” ~ Carl Menger

This is the concept that the very best money is that which is the most desirable of all commodities to the greatest number of people due to a desire for that thing itself. ...and that commodity is gold. THAT is why gold is money and THAT is why everything that's not gold has risk that is > gold.
 

ds_mustang

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...and what you seemingly fail to take into account is the base use case for crypto currencies. You like defi and you like smart contracts...and that's just great. However, that is not why the vast majority of the masses buy crypto currencies. They swap fiat for crypto currencies not for the crypto currencies themselves, rather they swap fiat for cryptos because of the possibility of redeeming them for more fiats later.

In this case there is a significant risk of lost value relative to other things of perceived value. You continuously gloss this over by making it seem as though risk = zero with crypto currencies, and that is simply not realistic.


Since I don't seem to be getting through to you with regard to how risk management works, let me try a different approach. Let me ask you a simple question.

Is bitcoin money? Now I don't need to know how many desirable qualities of the best money that bitcoin checks off, what I want to get at is why people value bitcoin. From there, I would hope, that we could all agree every other crypto currency...including ethereum has risk that is > bitcoin risk. If that's the case, then tell me please where bitcoin and a theoretical ethereum 3.0 would belong on Exeter's pyramid.

View attachment 252167

It most certainly is not at the bottom with physical gold and silver. Now one could make the case that bitcoin's risk is somewhere between base and bank currency. ...and if so, then ethereum 3.0 MUST be some point higher on this inverted pyramid and therefore more risky.

Bitcoin is in many ways a debt dollar derivative. What many miss is that the dollar is a derivative of gold. The US dollar quite literally has value worldwide due to the pile of gold the US amassed over time, particularly between and during the two world wars. There is no asset with less risk than physical gold and silver because the vast majority of people want gold and silver, not because of what they can buy, but because they desire that thing itself.

Certain commodities came to be money quite naturally, as the result of economic relationships that were independent of the power of the state.” ~ Carl Menger

This is the concept that the very best money is that which is the most desirable of all commodities to the greatest number of people due to a desire for that thing itself. ...and that commodity is gold. THAT is why gold is money and THAT is why everything that's not gold has risk that is > gold.
Thanks for the reply. Those are good points and good questions. In generally I would say that right now crypto tokens like BTC and ETH are not money and aren't on Exeter's pyramid at all. Bitcoin (and its various clones) in particular is nowhere on the pyramid--it is essentially a collectable like gold and aims to replace Exeter's pyramid with their own pyramid placing itself as the pyramid's base asset.

The ETH token is also not money and not on the pyramid, but it's different in that it's not trying to be money. ETH is a gas token that enables the Ethereum network. The Ethereum network is a platform, like the internet or smart phones are platforms. Ethereum (and by extension ETH) are useful and valuable sort of like oil is useful or the internet is useful, even though oil and the internet aren't money and aren't on Exeter's pyramid.

The Ethereum network enables use cases like programmable ownership tracking. USD stablecoins, which were the topic you were responding to, are created on the Ethereum network and are dollar derivatives and are on the pyramid. Gold stablecoins are gold derivatives, also on the pyramid. So the Ethereum network with its programable ownership tracking platform enables new assets on the pyramid similar to how Wall Street has created so many assets on the pyramid. Ethereum has arguably enabled a number of other assets also on the pyramid beyond stablecoins. This is what I mean when I talk about DeFi and how I suspect it will swallow Wall Street, regardless of the money pyramid--it's not money/gold Ethereum threaten to replace, it's Wall Street.

So Ethereum is a network that enables digital assets (including "monied" assets on the pyramid) and financial applications among other things. Bitcoin is a collectable that wants to replace gold. I don't see BTC as less risky than ETH in the slightest. I see BTC as more risky. For BTC to succeed it needs to replace gold as the base of the money pyramid, or at least become some parallel store-of-value asset on its own pyramid. Ethereum is valuable as a platform for its use cases--for what it enables--similar to oil, the internet, smart phones, etc.

So what do you think is more likely? That bitcoin will replace gold? Or that people will find inventions like stablecoins useful and powerful. Because your answer suggests which is more risky, BTC or ETH.
 
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solarion

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Bitcoin (and its various clones) in particular are nowhere on the pyramid--they are essentially collectables like gold and aim to replace Exeter's pyramid with their own pyramid placing themselves as the pyramid's base asset.
That's a remarkably evasive response that addresses nothing I said.

Did you just say that gold is a collectable? The US dollar is quite literally a derivative of gold...which is money, the us dollar is currency. Crypto currencies are dependent upon the purchasing power of the US dollar, and as a result I believe ethereum 3.0 could theoretically go to $1 trillion per token and it wouldn't mean anything relative to gold. That is so because billions of people worldwide would not be willing to give up even a fraction of an ounce of gold for ethereum 3.0 tokens even if, or perhaps especially if those ethereum 3.0 tokens were valued at $1t US dollars.

...and you're welcome to not see btc as less risky than eth all you like, but that's not reality. Eth as a currency is complete garbage as is its visibility and its chain's immutability. You've such a hardon for eth that you say the weirdest stuff where it's concerned, but thanks for the laughs.

Any take on why Zavalny didn't mention buterin's baby when he casually suggested that Russia may accept bitcoin as payment for Russian energy commodities? Was it just an oversight? ...in your opinion?

https://www.cnbc.com/2022/03/24/rus...ayment-for-oil-and-gas-as-sanctions-rise.html

So bitcoin yes, gold, absolutely...and ethereum 3.0...not even mentioned.

“If they want to buy, let them pay either in hard currency, and this is gold for us, or pay as it is convenient for us, this is the national currency,” Zavalny said, in comments that echoed the president’s warning from the day before."

I know, I know, ethereum 2.0 3.0 3.x is not a currency, it's a "network that enables digital assets (including "monied" assets on the pyramid) and financial applications among other things." ...whatever that means.
 

ds_mustang

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That's a remarkably evasive response that addresses nothing I said.

Did you just say that gold is a collectable? The US dollar is quite literally a derivative of gold...which is money, the us dollar is currency. Crypto currencies are dependent upon the purchasing power of the US dollar, and as a result I believe ethereum 3.0 could theoretically go to $1 trillion per token and it wouldn't mean anything relative to gold. That is so because billions of people worldwide would not be willing to give up even a fraction of an ounce of gold for ethereum 3.0 tokens even if, or perhaps especially if those ethereum 3.0 tokens were valued at $1t US dollars.

...and you're welcome to not see btc as less risky than eth all you like, but that's not reality. Eth as a currency is complete garbage as is its visibility and its chain's immutability. You've such a hardon for eth that you say the weirdest stuff where it's concerned, but thanks for the laughs.

Any take on why Zavalny didn't mention buterin's baby when he casually suggested that Russia may accept bitcoin as payment for Russian energy commodities? Was it just an oversight? ...in your opinion?

https://www.cnbc.com/2022/03/24/rus...ayment-for-oil-and-gas-as-sanctions-rise.html

So bitcoin yes, gold, absolutely...and ethereum 3.0...not even mentioned.

“If they want to buy, let them pay either in hard currency, and this is gold for us, or pay as it is convenient for us, this is the national currency,” Zavalny said, in comments that echoed the president’s warning from the day before."

I know, I know, ethereum 2.0 3.0 3.x is not a currency, it's a "network that enables digital assets (including "monied" assets on the pyramid) and financial applications among other things." ...whatever that means.
Yes gold is a collectable--the ultimate collectable that we call money.

I suggest you go back and reread my previous post. You clearly misunderstand that bitcoin and ethereum are fundamentally very different. Bitcoin is trying to be money, ethereum isn't. Bitcoin is trying to replace gold. It's trying to replace Exter’s Pyramid with itself as the base asset. Ethereum is trying to be a platform for decentralized applications and assets. It enables financial systems like Wall Street and populates assets on Exter's Pyramid (as well as other "value pyramids" unassociated with money like NFTs). Ethereum has a gas token ETH which could loosely be called a currency for use within the Ethereum network, but it's not trying to be money or a global currency.

Perhaps your hatred of ethereum has colored your view to the point where you don't even understand the difference between what bitcoin is trying to do vs what smart contracts are trying to do.
 
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