Bitcoin is only a medium of exchange. It doesn't do anything itself the improves an economy. An economy is the aggregate of all the jobs and economic output of the citizens. What about Bitcoin do you think would boost, either in terms of economic activity or jobs, beyond what the local currency facilitates? If a country switches to one currency from another, it doesn't create any new jobs. I don't know why everyone keeps asking this question.

You're setting up a strawman in trying to paint it as anyone who disagrees with your idea must believe there is "one true faith" or whatever that means. All opinions aren't created equal, and an opinion on economics is only as good as the the policies it supports. In forming those opinions, what should matter most is evidence and sound economic theory, and both strongly come down on the side of tariffs being more destructive to the economy than beneficial. Steel tariffs will benefit the US steel industry at the cost of every industry that uses steel by raising the price of all steel available to them. Tariffs don't make US steel cheaper, it makes all non-US steel more expensive in order to make US steel more competitive by comparison. So first, you have widespread price increases for all industries that use steel and all consumers who buy steel products. Second, you have retaliatory measures by other governments that will target US industries for tariffs, thereby offsetting any benefit to the US steel industry by making US goods overseas even less competitive than they already are. This is not a secret, Canada (our largest trading partner, which is important), Europe and China have already said they will impose retaliatory tariffs. This is going to affect US GDP negatively far more than protecting steel jobs in the US will positively affect GDP. The market knows this will happen, that's why all major indexes around the world dropped upon Trump's announcement. Economists are stunned, because protectionist trade policies was a problem they thought we "solved" a long time ago. The fact that Trump is cavalierly pursuing policies that have outright failed in the past is a pretty big shock to the system. Finally, Bush tried emergency steel tariffs to prop up the US steel industry in 2002, and at the time, the Congressional committee investigating the expected impact of the tariffs reported that they expected 8 jobs to be lost for every steel job protected.
Source: https://www.gpo.gov/fdsys/pkg/CHRG-107hhrg81372/html/CHRG-107hhrg81372.htm

Studies later on the impact found those tariffs resulted in a net loss for the economy by temporarily boosting the US steel industry and ultimately reducing overall GDP and also resulting in a net loss of approximately 200,000 jobs.  
Source: http://onlinelibrary.wiley.com/doi/10.1111/j.1467-9701.2005.00722.x/abstract
Source: http://www.tradepartnership.com/pdf_files/2002jobstudy.pdf

Also, the WTO ruled against the Bush US steel tariffs and imposed a $2 billion sanction if the tariffs were not withdrawn, which the US refused, but ultimately relented when Europe implemented tariffs on a range of US industries in retaliation.


Yeah, there's no inconsistency here. Government shouldn't be interfering in the economy to produce artificial winners and losers because it's more inefficient than letting the market decide what goods/services the market wants, and it creates crony capitalism where the politically connected elites use the government to advance their own ambitions, which is undemocratic.


I don't see tariffs as promoting free market. By definition, free market means laissez-faire, which means no interference. Do you think that tariffs are non-interference? It's an intervention. So by definition it can't be free market, and it doesn't make the market more competitive, it just raises all prices to artificially keep in business a high cost producer. The most accurate thing we can call it is protectionist. It may logically follow that making the US steel industry more competitive by making everyone else's steel more expensive does increase competition, but not because it makes anyone more competitive, it just artificially increases the number of producers. If it was a naturally competitive market, competition would result in cheaper prices, but we actually have the inverse here, which is obviously a perversion. The question you should be asking therefore is if the detriments of such a policy are worth the price. After all, we could have a completely isolationist trade policy, thereby boosting the consumption of US-made goods to 100%, but it would also decimate the economy and greatly reduce the amount of affordable goods available to US consumers because the US cannot produce itself everything the US consumes. Not competing with China on everything isn't necessarily a problem; the US isn't competitive with China in all sorts of industries due to the fact that the cost of labor is a fraction of what it is in the US. China itself is having problems losing jobs to yet even cheaper labor nations that are yet underdeveloped still. To use your bitmain analogy here, it may be that having Bitmain dominate the ASIC industry may be the most efficient method of ASIC production. Whoever can produce the cheapest and most efficiently will naturally rise to the top, that's just how free markets work. It may be bad for all other producers of ASICs if they can't produce as efficiently, but banning Bitmain ASICs will artificially raise the price consumers pay for ASICs just to benefit a small number of producers who, if they can't produce efficiently, probably don't deserve to be in business.

In this case, a steel tariff is a tax ultimately paid by consumers through higher prices which benefits the US steel industry, and it comes with the added detriments of slowing economic activity and also of retaliatory tariffs that will further depress US trade and therefore US GDP. And because Trump is an unsophisticated statesman who will see this as a loss, is likely to respond with other (what he considers) "strong" measures that will further have unintended consequences.

I'll merit back because you're promoting good discussion.

There's no need for quotation marks on either "drop" or "steep." The decline from all time highs is both a very real drop and also very steep. The fact that years ago Bitcoin was virtually worthless does not diminish either the drop that has been experienced or the fact that the drop has very steep. A 50% decline is catastrophic. It's only the fact that most of the decline has represented unrealized paper gains for the vast majority of people that this doesn't feel apocalyptic.

No, of course not. Anyone who can hold a sophisticated thought in their brain realizes that a trade war is bad for the economy and that the trade off for protecting steel jobs is higher prices all consumers have to pay for those products. It's government interference in the economy, which is never efficient, never works as intended, and never comes without retaliatory consequences. We have a large body of evidence showing the effects of tariffs and trade wars, and despite all this, some simpleton thinks "trade wars are good and easy to win." Well, they're not and they're not. That's why the world at large has moved towards free trade, because it's more efficient to let the low cost producers produce goods they have the advantage in producing, and have other economies specialize in something else. That costs some jobs, yes, but consumers benefit more and the economy experiences more growth as a result. Protectionism never worked, it spawned shortages, price inefficiencies, and nationalist tendencies that sparked wars. That's why the stock markets dropped all around the world at the announcement that the United States was set to repeat the mistakes of the past. The MAGA munchers are on the march!

More important are the properties of fiat that cryptocurrencies don't share: stable store of value and widely accepted for commerce. Without, at a minimum, both of these things, crypto is useless as a currency. Without a stable store of value, you can't save or plan for the long term or have a reasonable idea past the immediate present as to how much value you're holding in the currency, which creates economic chaos. Without being widely accepted, it's as useful as trying to pay with your Diner's Club card. People know it's a thing and that it represents money, but nobody will take it as a payment method.

Except nothing is being traded in this case. A trade is quid pro quo, something for something. That's not what is happening here. You haven't traded your merit for someone's post. The post exists whether or not you give it merit. This is like a street performer with playing a saxophone on the street corner with a bucket for you to place coins into if you appreciate the music. Nobody is obliged, there's no real incentive to do so either. It depends on people's generosity. So it's not an economy at all, it's a patron system.

That said, I don't like it. The main problem is there's no incentive to give merit to good posts, and that's probably why you see so little of it. It's a poor attempt to solve the real problem of low quality posts, and I don't necessarily see it doing a good job of it.

Pick any one, there's no shortage of bs posted in any Zerohedge article. Perhaps you ought to research the history of Zerohedge and the wild conspiracy theories it peddles. When that's your bread and butter, it's not on me to prove any article there is suspect; they're all suspect because of the types of information they deal in. Nobody who has a reputable opinion or knowledge would need to resort to writing for Zerohedge in the first place, so it has come to the point that you can discount anything written there because it was published there. If there's a legitimate point to be made, you'll see it on actual reputable financial blogs and websites, minus all the conspiracy theories and sham information. But nothing I can say is going to convince you of that. They peddle a worldview and you either have the critical thinking skills to see through the garbage they peddle, or you bath in it without knowing any better. If you're the latter, I can't show you the light. It's something you have to be able to see for yourself.

By definition, if there's a "really liquid market" as you put it, that presupposes a deep market. If it's a shallow market where only a small amount of coins get traded, by definition it is not a liquid market. You can disagree with the conclusion all you want, but you're contradicting your own point in doing so. You cannot have both a liquid market and a shallow trading depth. Those things are mutually exclusive by definition since one is an attribute of the other.

If bitcoin is where your money is stored, which many people want bitcoin to replace fiat, then this is of the utmost concern. Fact remains that without electricity, Bitcoin cannot function. There is no analog system whereas fiat as physical currency. Bitcoin only exists in the blockchain, and the ability to move the btc is ownership of the btc. Bitcoin is not a suitable currency during natural disasters, which you can add to a very long list of why it's not a suitable replacement for fiat.

First mover advantage is always important, but Bitcoin always feels on the verge of not keeping up with innovation of squandering its first mover advantage. Block size is going to remain an impediment to expansion. SegWit has so far done a fine job handling the immediate crunch, but it's another limit that will hard cap the capacity and there hasn't been a lot of enthusiasm to further raising the block size. Lightning network as far as I understand it seems like a centralized solution which is not in keeping with the spirit of Bitcoin.

There are lots of examples of companies squandering first mover advantage. Pandora was the first music streaming service, but didn't adapt and keep up with market demands and now has been largely supplanted by Spotify and to a lesser extend, Apple Music. There's no shortage of other examples. Bitcoin hasn't demonstrated to me it's committed to not squandering their advantage.

Bitcoin has spawned demand for chip makers in the US (especially Nvidia and AMD, each of whom derive a not unsubstantial portion of revenue from crypto-related mining rigs), and also the development of large scale mining operations. One of our states out west (either Montana or Wyoming, can't remember which) has just secured a development project that will see a $250 million mining operation in that state. That is the most direct way Bitcoin is affecting the economy.

This is exactly why barter doesn't exist large scale anymore. The economy is far too complex and bartering is far too inefficient as a means of consuming and satisfying wants and needs. Money plays the crucial role of being a medium of exchange and making the economy function more efficiently as buyers and sellers can rely on a centralized medium that is universally considered to be a store of value and universally accepted as payment. Bitcoin's lack of acknowledgement as such is only one of many major weaknesses standing in the way of it being a viable medium of exchange.

It wouldn't take holding half the market or anywhere near it. Currently, a whale could dump $50,000,000 of btc on the market at once and wipe the price down from $9800 to $7800 representing an instant 20% drop in the price that would cause other people to pile on to the downward momentum inflicting further damage. In this scenario, $50m USD would wipe out $35 billion of btc market cap.

You don't have to be anywhere near as big as you think it have dramatic power over the market. But also, the risk of acting like this could epicly backfire, and I don't find it likely too many people are going to risk $50m USD on a ploy that may ultimately end up not working if other momentum traders don't also pile into the selling bonanza.

That's called the Martingale System, when someone doubles every losing bet on the assumption that because the previous result was X the next result is more likely to by Y. That's not true, each result has the exact same odds of happening because future events are not linked to previous events. Applying Martingale to trading is just as faulty. What goes down is not guaranteed to go back up.

I agree that Bitcoin currently has the broadest ecosystem and currently, the highest utility. However, there are at least two alts that are better poised to be more useful going forward. Ethereum and smart contracts are clearly something that could prove to be more useful in the future and have far wider implications. It functions as crypto just as well as Bitcoin, but has so much more potential functionality that can be built on top of it. The second is Ripple, which has major backing from major financial institutions. This backing is going to be more valuable to people who want the integration of crypto with major financial institutions. It seems more likely than not to be that eventually Ethereum or Ripple, or both, will surpass Bitcoin in market cap.

People who buy drops are making a fundamental mistake in assuming that whatever goes down must come back up. Markets don't work that way, especially when things are bubbles. The housing market bubble popped in 2008 and some houses have only recovered their value 8-10 years later, and some still haven't. When the NASDAQ bubble popped in the late 90's early 2000's, it took 15 years to get back to where it was. You could have made far more money investing in other opportunities rather than waiting for an old bubble to get back to where it used to be a decade before.

As it relates to crypto, people employing your strategy when it fell from $20,000 to $18,000 are still way down on their investment. Then when they bought more at $16,000 and $15,000 and $12,000 and so on are compounding losses with a stupid strategy that isn't guaranteed to pay off.  Many commodity bubbles that pop never retain their old high. If that ends up being the case here, I won't feel bad for people who sit on those losses. Play stupid games, win stupid prizes.

Growth charts describing automobiles replacing horses was not a bubble because it never popped, therefore it wasn't a bubble. It was a technological shift in the way people traveled. The same thing will not happen for crypto because crypto is not going to replace fiat for the majority of commerce. The price of bitcoin deflated when it hit $20,000, but I would not say it popped. Right now it just looks like a massive correction. A pop of the bubble would likely see it fall to around $2000 or below.

If you bought 1000 btc for $100 8 years ago, you didn't work hard for your wealth, you just got lucky. Let's dispel this silly notion that all these crypto millionaires worked so hard for their wealth instead of just winning a random lottery that was precipitated on being incredibly lucky. The question of whether they "deserve" it is less debatable. Nobody deserves or doesn't deserve anything, things happen and that's the end of it. There's no value to assign as far as what is deserved goes.

The only people who "earned" crypto wealth are people who built a business or helped code the early releases of the code. Traders along the way can earn as well, but anyone who turned hundreds of dollars into millions didn't earn it, they just got lucky.

If everyone was certain that everyone would be using Bitcoin, the price would never stop going up. But 1) the likelihood that the majority of the world population is going to crypto is not a given, and I would argue against it. Crypto is always going to be a niche element, and the to the moon people are delusional. And 2) the likelihood of the majority of the world using Bitcoin is far, far less likely. There will be so many crypto options and competitors, no one crypto will ever have a too the moon valuation because crypto as a whole will be liquid and easily replaceable, so added adoption is not going to favor any one crypto heavily but be spread among dozens and possibly hundreds of cryptos. If you bought Bitcoin above $1000 and expect to get stupid rich off it, it's not going to happen.

This isn't exactly true. Banks can't create money at will, and they only do so in relation to demand for loans. The money supply increase because of the loans, not because the bank has created extra cash. Only the Fed can print extra currency, and they do so in relation to how much banks increase the money supply through loans to try and keep the ratio of physical currency to digital fiat steady. For regular banks to increase the money supply, the demand for loans has to be there first, the bank can't create loans if no one wants them. Also, by law the banks have to keep a minimum amount of reserves, so they 1) only create loans to match demand, and 2) only are able to create as many loans as able while maintaining the required reserves.

One would expect that when demand for loans is high, banks would have to offer higher interest rates to entice more people to deposit money so they could make more loans without falling below the mandated reserve amount.