LOL Yes!! India is the largest democracy.

Silicon valley and future exchanges must have had a lot of leverage. Silicon Valley has been betting big on blockchain and bitcoin. In Indian on the other hand, their is hardly any institutional presence in terms of blockchain innovation. Unlike China, there aren't any industries related to bitcoin.

It's mostly the hardcore users who were minuscule in numbers just a year back. Most of the numbers have swelled because of ordinary people jumping in for gains. A lot of them were scammed by a guy in his 20s by being sold fake tokens in return for BTC. One of the main exchanges is in fact run by some of the Indians who were active at the forum through these years.

There are petitions started on the internet and most of the big exchanges are also trying to clarify their positions. We can only wait and watch for now.

You are right about loaning banks having collaterals, as an example, in the form of land deeds or houses when it's someone in their 20's taking an educational loan. When it comes to the real money out there, the business-men making impossible bets and banks providing them money for their mid-air castles, there are hardly any collaterals to bank on.

This mismanagement and nepotism based judgement in loaning out funds to select businesses is typical of the present system. This is made possible because we accept the point no. 2 we are discussing as an economic certainty. it necessarily needs to happen that the "poor, risk-taking. true-blood capitalist" businessman will eventually lose money when there is a downward cycle needing loan write-offs.

All I am raising a question on is in treating this as a necessity when it seems to me a corruption of the existing system. Why do we have to replicate that in crypto? I am probably not understanding the economics related point you are trying to make and I'd appreciate if you can point me to source on this.
 
On the face of it, the idea to justify money depletion as a method to compensate for bad loans given out by compromised banking entities seems illogical to me.


Your question was about where the increased supply needed should come from. The amount of currency to be made available in any future period is mathematically known in case of bitcoin. I am not saying that we need planned economies.
That's the reason i insisted on "Planned as not in a planned, socialist economy ".

Planning doesn't necessarily have to mean communism. Every government has an yearly budget allocation. When you know the future money availability, you can always decide beforehand where and how to allocate funds to.

Unfortunately, there is dissonance in everything that this government does. This was most visible during the demonetization drama. All talk and no work has made all of them dull boys..

If this idea of RBI coming up with it's own cryptocurrency materializes, you can expect the government to introduce some sort of licensing and make owning cryptocurrency some sort of crime without it.
That is what the Indian bureaucracy has always been known for. Complicating a simple system beyond all recognition by introducing checks and watchdogs at every point. The watchdogs are basically meant to act as extortionists.

I frankly hope that the Jaitley group just leaves crypto on their own in India. Let them dissuade the banks from financing it and let us move to a peer-to-peer system rather than rely on their stupid regulations.

LoL..Enough with shaming Indians for the lack of bitcoin nodes. Wait till I make it 26..  

The OP didn't mean to warn the whole community I suppose. It's just for Indians buying on the small exchanges like Zebpay. The day the announcement was made, Bitcoin price dropped below the international price by around 5%. This despite the fact that the price always used to be about 10% higher because of the premium on currency conversion.

So it did experience a minor crash and OP was probably trying to address just that.
And yeah it's a shame that we cannot really afford mining farms let alone equipment manufacturing because of the service dependent economy we have. We jumped straight from growing wheat to typing code. Missed the manufacturing sector completely. Hopefully there'll be some improvement with the renewed focus on Defence manufacturing.

Most of the decentralized exchanges have been trading alts whose value is hard to justify.

The time when decentralized exchanges can be a norm hasn't come yet. A competitive, truly decentralized exchange which can trustlessly manage fiat conversion isn't available yet as the main problem of initial funding is unsolved. If its funding with fiat then we are back to the problem of relying on banks.

An established currency like bitcoin could have been the obvious solution if bitcoin generation hadn't become so centralized already. An ideal situation would have been for bitcoin to become established as a p2p currency first and the alts should have boomed afterwards.

The booming of alts without bitcoin maturity and distribution has been a clear step backward for the crypto space.

LOL. The media had front page advertisements about Amit Bhardwaj, the scammer behind gainbitcoin just a few months back. You think these people do any background check of credentials before deciding who to call for a talk about a hot topic?? For me, some guy coming onto CNBC means nothing and neither should it to anyone else.

Searchtrade.com seems to suddenly have an ugly, unprofessional banner that it's moving. Another Red Flag.

And yes, I am biased. There are enough scams in this space. Only a fool won't be biased when judging these people spouting ICOs at the drop of a hat. They have nothing in line while asking people to give them millions.

A very important factor for crytpocurrencies to be widely adopted is for the network to remain robust and energy efficient. ASICs are by far the most efficient of the lot.
Imagine if a purely GPU/ CPU mining based coin becomes the de-facto standard then a company like bitcoin Bitmain would only have to covertly manufacture enough ASIC's to take over the majority hashrate. It's like the quantum computer attack before quantum computers are even possible..

It seems quite straightforward that there isn't many alternatives to ASICs in a truly developed and widespread crypto economy. You want the most efficient, highest possible hash rate to secure the network.

In this regard, A way forward is something like the Blockchain Defensive Patent License. Simply forking to avoid ASICs is a regressive step which will create more problems than solving them.

I doubt that really big investors looking to catch hold of enough BTC would do it through exchanges only. They may as well pass the burden to some investment manager who will find the best OTC or P2P deals for them. There goes the risk that you mention.

Exchanges like Bittrex seem to be suitable mostly for alt-trading. I think we have seen just one cycle of investor influx yet. Clearly the exchanges weren't ready for it. This lull period has given them time to incorporate things like SegWit, Transaction Batching and hopefully time to increase headcounts so that they can actually manage investors.

Again, Why would anyone looking to invest millions go for Etherdelta. Isn't it the place where anyone can list a similar sounding contract and scam you straight?

Why'd you say that he is being censored for his views on bitcoin? He is still free to carry his "babies dying" and "I am the first investor in the world to invest in bitcoin" megaphone around.
The @bitcoin twitter handle wasn't meant for him to use for covertly attacking bitcoin and promoting BCash. Same for bitcoin.com.

If this wasn't crypto and if bitcoin actually was a company, he would have been sued by now for misrepresenting another trademark. He knows that such a thing cannot happen but someone had to stop him from this underhanded, unethical practice.

I am glad that twitter did it. Either due to complaints from the bitcoin community or due to their own policy.

Without bitcoin, the future would simply be private blockchains run by private institutions on the set of trusted servers that they decide. So instead of trustlessness, we'll be offered distributed-trust or something.

It is not feasible for another network, code-base or user-base to simply replace and start doing what bitcoin has been doing for almost 10 years now. Bitcoin is also the most held and most distributed crypto out there. It's the settlement currency of cryptocurrencies. Imagining a crypto market without bitcoin wouldn't be possible as all those people wouldn't simply stop using it altogether.

There was bitcoin without other cryptos and it can still exist on its own. On the other hand, there can be no crypto ecosystem without bitcoin.

In the OP you raise question about how crypto would adjust to growth and contraction cycles in economy. From what I understand of your analogy to present economic cycle, this is what you have stated:

1. During growth, banks extend more credit allowing availability of currency for things like capital investment, additional wages etc.
2. During contraction, the bad loans get 'written off' resulting in money being destroyed.

I don't understand how the second point is a desirable characteristic for any currency to adopt. Aren't such cycles of credit destruction caused by the banking, politician, business nexus in the first place??

Let's talk about the first case. Lets assume that a country has its own publicly auditable cryptocurrency. It is being mined with a PoW algorithm and you can always expect to have predictable supply available to be added to the pool. This assumes that the reward hasn't trailed off to almost zero yet.

This leaves you ample scope for "planned growth". Planned as not in a planned, socialist economy but planned as in prudent planning about where to allocate the budget rather than simply allot huge amounts to schemes like today that get distributed to private contractors via a complex system of Government sub-contracts. The flow of money in such government handouts is completely obscured and unaccounted. It's as easy to write off a loan as an asset loss to accident or unforeseen incidents.

Contrast this with a scenario where every allocation and fund outgo is publicly available on a block explorer. Every single payment from Government coffers can be traced to it's recipient and approver. Mix in smart-contracts and you could have a publicly available record of what the expenses was made for.

I understand that this will not be an answer if you keep looking at it through the established lens of macroeconomics. Why do we need big money expense to be so obscure and tentaclized that any chance for accountability and auditing is a huge task that is corrected only in hindsight.

I understand it'll be pretty painful for all those people who bought near that 12k- 19k run. I believe i myself did buy some fractions but then there is no point being  gloomy. Sure there is no guarantee that they'll ever approach breakeven but there is a chance they will.

We have all been screwed left, right and center by the traders, the alt-coin peddlers, not to miss the governments, hackers and the dishonest exchange operators..lol..Regardless, I still see this as a huge learning opportunity for the masses about an alternative to state control of money. This is not over by any chance.

Wow Man, Reading through the posts by Laszlo and seeing him tackle all this attention so humbly is such a great experience. What a legend..!!

Lots of Respect and good wishes to you and your family..

May you stay forever young..

It was painful to go through your post history. If your English is at this level, you should try brushing up your technical knowledge and help others with that.

Technical information doesn't need to be wrapped up with forced words to be seen as substantial. That means you will have to work harder than usual. You should stop hoping for things to change with posts like this or by being extra polite. This has been a dead horse for quite a while.

There's only two ways for you to earn respect and merit on this forum:

1. Improve your knowledge and make yourself technically useful.
2. Actually demonstrate something you are doing in the real world to support or bolster the bitcoin economy.

George Soros, Rothschilds and other mega investors coming in..So The Illuminati had woken up to bitcoin..LOL..

Conspiracy theories apart, it looks like they have finally found this to be the right entry point. They must have decided that they cannot take a chance with letting go off something like bitcoin that can have far reaching implications for them in the long run.

Now the question is that even if they enter and hold huge amount of this decentralized currency, what effect could they have on a crypto-based future. As long as bitcoin is PoW, I don't think individuals holding huge amounts can be a problem except through market manipulations.

These people maybe good but are they god enough to manipulate the market always to their advantage? We see speculations about these coordinated pump and dump scenarios. Over the years, it has been confirmed that the more this happens with bitcoin, the more popularity it gets. The kind of people who are holding considerable amounts of BTC as individuals are diverse enough to defend from any sort of coordinated whale attack.

Now if they enter with the view to use the volatility to their advantage, we'll soon see regulations on trading similar to the stock markets. The one thing such news will speed up is regulation and possible recovery.

Though if the illuminati conspiracy is true, they may already have huge stocks of BTC with them cuz then they'll be the one behind Satoshi anyways!! 

Regulations are the goverment's perogative and right now, these will have to be accepted as facts of life.

Those who have the purely libertarian viewpoint want to live in countries which leave crytpos fully unregulated. There have even been proposals to build seasteads where normal jurisdictions won't apply. This is quite fascinating but not practical for everybody, as of now.

So we have to sit back and look for the possible regulations:

1. First will be the requirement to have full KYC when dealing with crypto.
2. There maybe some sort of taxation built into the system, which normal users already pay as a service tax.
3. ICO regulation and audit can be a big area of improvement, if the ICO craze has to actually be of any value.

These regulations should serve to make market safer for the average investors. The biggest problem will be maintaining a balance between privacy and law-enforcement. This is the trickiest bit of the problem.

One thing is sure that it can't be regulated out of existence. If such a thing happens, it'll just move into the background again. People will move to friendlier countries and we can have a division of the camps that support it vs the non-supporters.
Fiat vs Bitcoin may well be the 21st century equivalent of the Socialist-Capitalist economy divide.

People losing money has nothing to do with their far-sightedness or understanding of bitcoin or crypto in general. Being seasoned investors, What they do know is that common people cannot handle markets well with their well of emotions.
People who got burned in the market are the ones who invested during the ATH in the months approaching December. All the while they were being warned not to invest more than you can afford to lose. They got greedy, FOMOed or were enticed by the wild fluctuations and desire to earn money. I am sure that the next time around people will be much more cautious in investing in bitcoin or any of the other cryptos out there.

This is all still an experiment on a peer-to-peer economy. The part highlighted above is pretty much non applicable for the majority of people. It is only an unfortunate minority who had to face this. You can't just forget everything that bitcoin stands for and take the side of the likes of Dimon and Buffett because people lost money to their greed.

If your premises is correct then the economists shouldn't just be deriding something that is just a blip on their macroeconomic radars?? Why then People like Jamie Dimon, Warren Buffett feel the need to comment negatively on them??  Why exactly do you have High Networth investors raising queries to investment managers around the world?? Isn't that because crytpo is a new, currently quite wild class of investment/ money??

They don't find it palatable that people are just raising money out of thin air by burning electricity while they have been doing the same for a long time themselves.

Of course they see crypto as an attack and that's where these reactions come from.

Absolutely right. It'd be so much better if we can see some real academic studies on the positive and negative effects of bitcoin on world economy rather than these off the cuff remarks.

I am sure there are people out there doing exactly this. Can we talk about those things here? Last i looked, there were a few articles on the nakamotoinstitute website. What are the other serious attempts to study it?

Let's see what they are all saying one at a time:

1. Paul Krugman: 2008 Noble Nobel Laureate:
"So is Bitcoin a giant bubble that will end in grief? Yes. But it’s a bubble wrapped in techno-mysticism inside a cocoon of libertarian ideology."

So if you don't understand how cryptography ensures security of the private keys or how mining ensures protection against double-spend, It becomes mysticism. This is an outright baseless and dishonest statement. People who are familiar with the system and are actually studying it don't find anything mystical about it.
For calling this mysticism, can he explain what exactly goes on behind all the "Financial Engineering" of bringing out derivatives and then using the invested money to generate bonuses for traders and bankers??

2. Eugene Fama: Noble Nobel Memorial Prize 2013
"if it doesn’t have a stable value it’s probably not going to survive as a unit of account."

Jumping the gun again. You cannot know what you don't know. How does he know that the value cannot stabilize? If there is enough consensus on using bitcoin the way it is meant to be, it can stabilize as much as any of the other 'settlement methods' that had been in vogue through centuries.

3.Robert Shiller: Noble Nobel Prize 2013
"It’s such a wonderful story. If it were only true.”

Reverse psychology for those who get easily floundered. Yes it's a wonderful story and it's true. Yes you have to be smart and fast to understand it. Not old and smug about your scholarship.

4.Joseph Stiglitz: Nobel Memorial Prize, 2001
"We have a good medium of exchange called the dollar. We can trade in that. Why do people want Bitcoin? For secrecy."

Yes we have the dollar. Before that it was bullion. We can trade in yuan, ruble as much as we can trade in dollar. People want bitcoin because you cannot simply generate more of it to write-off bad debts coming out of financial mismanagement. You cannot simply give bonuses to all the people who cause mayhem in investment banks by bail-outs and pass the burden on to the working class. Of course they want a system that can be held more accountable than this. If bitcoin is that system, then yes, people want it.

And Secrecy. Yes why not?? Did we have any less drug and guns trade even without bitcoin?

5. Bengt Holmström: Nobel Memorial Prize 2016
"That’s an example of where you think you’re doing something good, you’re creating a lot of safety, but the consequences are actually potentially catastrophic [...] The bigger the calamity, the more safety there was initially,”

This is the only response which i find worthy of discussion. He says that centralized cryptocurrencies would be bad in the event of a crisis.  If the money rushes back to the central bank in the event of a crisis (as the central bank would be seen as the one dependable intermediary), what is wrong with it.
He says it'll see the central bank become an intermediary. Well, isn't that exactly what happens after the crisis anyways. All the central banks become the sole source of bail-out funds. Only with bitcoin, that wouldn't be an unlimited supply.

The problem is that the idea of bitcoin challenges the control that Central banks exercise through monetary and fiscal policy. It is not an easy thing to change and much research is still needed to determine how a financial system with a settlement currency like bitcoin will look like. These people are intellectually intimidated by bitcoin and simply want to brush this aside. These reactions are something we shouldn't really heed much.