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That's an interesting analysis.

I think a good place to start breaking that down would be to check if spending were significantly different during eras when a gold standard were in place. The concept of inflationary currencies spurring spending is an urban myth. In many instances what we need isn't higher spending, its smarter spending or greater efficiency and cost effective solutions in how currency is spent.

There is also an interesting relationship between HODL and stability. A case could be made for a capital gains tax and relatively high commissions in the US stock market being an incentive to encourage HODL. When bitcoin markets were structured more along HODL lines than the rampant speculation we see now, its price was much more stable.

There's another angle here where investments banks with leverage contribute towards economic and financial instability and need to be bailed out of their bad investments. HODL and long term strategies tend to be more reliable and stable than short term high spending or leverage plans. Banks which HODL via utilizing stable long term planning, typically never need to be bailed out.

One of the reasons leverage and high spending plans are encouraged involves short term thinking and high risk attempts at profiteering. This contributes towards the 2008 economic crisis and many other negative implications society faces.

It doesn't make much sense to criticize long term HODL, which tends to be more stable and reliable than the short term, high risk, ventures which politicians and investment banks favor.

If you want another angle to this, look at budget deficits. Looking at the european union or united states deficit, would they conclude: "we need higher spending"? Eh. I don't think so. This idea which politicians and investment bankers push, which says we must tax and spend our way out of debt. I wish more would question that perspective.

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Excellent post.

May I ask if imperialism factors into the equation?

Typically throughout history we may see superpowers implement policies to maintain their advantage over foreign powers. In the current era this might be represented by the united states taking steps to support oppressive regimes who keep the educational standards of their own people low so that those nations are never in a position to rise up or threaten the economic superiority of the USA.

And so we might explain how the USA gives billions of dollars to oppressive regimes through the middle east. And by some strange coincidence the regimes america supports are the ones who are most guaranteed to ensure said nations never advance anywhere near the united states in terms of technology or economic power.

That type of policy could be bad karma and help explain the decline of powers like rome which eventually could have succumbed as the corruption and evil they fostered upon others, eventually returned to them?

Or maybe that theory is *incorrect* and it is simply power which corrupts and leads to ever declining standards? Just trying to contribute.

Bitcoin's price has a tendency to peak @ the end of the year, near christmas and the holidays. It is possible we won't see more all time highs until 3rd or 4th quarter 2018. That year end peak we saw in 2017 may be seasonal and driven by increased demand and volume produced by christmas shopping, black friday and similar consumer trends. Many of the best shopping deals and free shipping incentives occur at years end.

The btc price decline at the beginning of the year we're seeing now could be normal. Many are done with their christmas and black friday shopping. They could revert back to HODL mode until next christmas. This represents a decline in crypto network volume (demand) which might be correlated with the billions lost in crypto market cap.

It is possible china and south korea are passing anti crypto legislation intended to prevent capital investment from flowing outside their borders. Their end goal is to keep money inside their country, rather than have it leave to be invested in the united states or other countries economies. That is one of the competiting theories for sudden anti crypto legislation in asia.

On the opposite spectrum, banks and the financial sector are some of the largest political campaign contributors and special interest lobbyist groups. And so to a degree, the recent spat of anti crypto legislation we've seen proposed in the united states and elsewhere might be traced to bankers as they're one of the few demographics who wield that type of political influence on a global scale.

In countries like africa, central banks have explicitly shown their dislike of bitcoin and crypto. The response in western nations might not be as obvious but it is possible africa speaks for all banks.

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Let's look at facts.

#1 Analysts pretend crypto is the only currency on earth that is "created out of thin air". No mention of fiat lacking intrinsic value.

#2 Analysts pretend crypto is the only electronic currency on earth. They fail to mention how much electricity banks and credit card companies consume and pretend bitcoin is the only currency on earth which utilizes electricity. "Bitcoin is unreliable as its electronic, leaving no paper trail." Every criticism made against crypto in an electronic sense should also apply to credit cards and banks.

#3 Analysts pretend bitcoin and crypto are the only currencies utilized for money laundering by drug cartels, terrorists and criminals. We have many cases of banks being far more guilty of that.

#4 Analysts attack bitcoin for being "unregulated". They fail to mention lack of regulation is one advantage china's economy has over the united states which causes china's GDP to grow while the united states GDP stagnates. Lack of regulation can lead to lower prices and less taxes. There may not be many real benefits to regulation in this day and age.

#5 Analysts claim "bitcoin is a bubble" without providing any real tangible evidence to support their claims. Many things analysts say about bitcoin and crypto are demonstrably false.

With zero experience it is very difficult. Maybe impossible. There is a learning curve to trading or gambling crypto in sports. Those are probably the two easiest crypto opportunities to get into & they can take years to learn before a person consistently makes money with them. There is also no guarantee a person will ever reach a point where either becomes profitable, rather than an overall loss.

Having background experience or knowledge could help. Having a background as a software engineer or a web developer who can build apps in crypto that could make it easier.

I like that goldman sachs and the US federal reserve look to be taking an objective stance on bitcoin and crypto. I think this trend dates back to Ben Bernanke admitting the federal reserve "caused" the Great Depression to a degree by decreasing the supply of currency in circulation. This apologetic tone and appearance of having an independent stance by the fed has persisted for at least the last decade or so. (I can't claim to have been watching them too closely, this is only based on my own impressions)

Potential worst case scenario here is the US federal reserve (and goldman sachs) is playing "good cop" to the "bad cop" of Jamie Dimon and friends. If you've ever watched a movie where they do a good cop / bad cop routine, where the bad cop threatens while the good cop pretends to be sympathetic & they coordinate to attain an end goal, maybe you know what I'm talking about? Sorry to be conspiracy theorist btw. Just trying to cover all the bases.

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When a retail website like amazon.com goes down. There are some who claim this can represent millions in lost revenue. The same principle could apply to currency support. If there is a high demand for bitcoin and alts which are banned. That demand often can't be replaced. Its based on value and utility. Banning bitcoin is like shutting down the golden gate bridge or something people need and rely on which can't easily be replaced. A ban on crypto definitely represents negative impact upon the economy of a nation. I don't think there is anyone in the world who will argue with that. The only question is how much of a negative impact does a crypto ban represent.

There is also a side issue where independence movements across the world are likely to embrace bitcoin and crypto currencies to gain further independence from central banks. Brexit, the catalan independence movement and similar social reformation occurring around the world could embrace bitcoin and crypto. These bans could become polarized in the sense that independence movements may be likely to legalized and support crypto while those who oppose independence may move to ban crypto as they are able.

Protecting data integrity within a cost effective backend database for accounting purposes appears to be one prospective use for blockchain technology. I think the legalized marijuana industry is also looking into implementing backend blockchain to protect data integrity of shipping/stock ledgers to cut down on theft and fraud.

Utilizing blockchain to store data involving property deeds and other records are also in the works.


 

Warren Buffett is scared investors will pull money out of the stock market, diminishing the value of his Berkshire Hatahway stock and other investments. He doesn't want money pulled out of stocks (decreasing the value of his holdings) and invested in crypto instead.

I kind of dislike Warren Buffett in that he hoards piles of money and doesn't do anything with it. It would be nice if he invested some of it towards something which benefited humanity/society, etc.

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Don't forget! There is Senate Bill 1241 (easy to find information on it via search engine) which contains provisions for the US federal government to confiscate crypto currencies without due process or just cause. Whatever legislative process the united states opts for could also be mirrored in europe to create a unified front. I hate to be a bearer of bad news but hope people can understand a need for clear and concise information, which might help to make more informed decisions in the future.

We may have been lucky so far in that elites appear to be divided on crypto. There are central bankers who probably want bitcoin banned. But there are also whale investors in crypto who want to trade and profit. Those whales probably want crypto trading legalized as its a profitable market with a lot of potential profit to be made.

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This might sound silly. At a bare minimum, I think all a person need do to launch an ICO is create something of value in the crypto currency world that people need and use. 

"Create value."

Its not easy to accomplish given the level of competition. There are many famous/legendary software engineers, innovators and inventors who are trying to accomplish this goal which makes things difficult.

If its too difficult to create value in crypto, then perhaps create value elsewhere. Look for a niche area no one is focusing on. Look for something that aligns with your specific talents and skills. There must be something of value you can contribute.

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If you want another perspective, the best trading strategy for bitcoin over the long term is *debatably* buying and holding. The daily price volatility (in percentage) isn't high enough to make day trading especially viable. There is higher volatility and potential profits to be had day trading penny stocks. Cross platform arbitrage may be the only crypto trading strategy which has a chance of beating long term buy and hold.

I agree many alts like ethreum and bitcoin cash profit at the expense of newer and less experienced demographics who buy those overpriced assets during their dump cycle when the price is wildly falling, mistakenly believing the value will shoot back up again.

Labeling the crypto market a pyramid or ponzi scheme however is going too far. It is true altcoins derive a large portion of their value from bitcoin. That doesn't make it a pyramid scheme. You could make a case for altcoins and crypto currencies, aside from bitcoin, being overvalued in proportion to their growth or fundamental metrics.

But profiting off of consumer lack of knowledge or false media campaigns is a pretty normal and everyday thing in terms of consumerism driving consumption. That aspect of things doesn't imply ponzi scheme/pyramid.

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The current implementation of bitcoin would need to be expanded (similar to lightning network) to provide a paper money version which could be transferred without merchant gateways or electronic payment verification.

I think if bitcoin were paper money, neither the public key nor the private key would be printed on it. Instead there might be a checksum or a digital signature which could be quickly verified as legitimate using a scanner (of the swipe reader for debit and credit cards) or whatever means. Then later the piece of paper could be redeemed for the amount of btc printed on it and withdrawn to a specific bitcoin address.

For bitcoin to be utilized as paper money, it would need to be easy and convenient to print out pieces of paper (for specific sums) which could be used to redeem btc.

There may be two sides to the deflationary coin.

On one side, supply decreases. On the other side, the value of the coin increases as it becomes rare. The two forces can mutually compensate to create a balance where they'll cancel each other out.

The main concern with deflation is scale, value and base unit. With 8 digits to work with on the right side of the decimal point, deflation becomes less of a concern.

With real numbers 1 bitcoin is only 1 segment. Using the 8 decimal places to the right 1 bitcoin becomes 100,000,000. That provides plenty of growth space for bitcoin's to be broken up into smaller fractional elements if the need arises, or under circumstances where bitcoin's go out of circulation due to deflation.

I see some people saying centralization is better, it gives more control! (There's no denying that.)

However, to successfully innovate and progress, people need a certain degree of freedom. They need to be able to exercise their imagination, their creativity to invent new things which advance civilization and society forward.

Nations like china are not known for inventing or creating things. Maybe they lack the freedom to do so? They do well when they counterfeit the inventions of other countries. They pirate DVD's, CDs, games and "borrow" a lot of patented and copyrighted intellectual property. They have ever gone so far as to steal stealth and drone technology from the USA which they incorporated into their own defense programs. However, it might be fair to say their progress is hampered by the state's overbearing and controlling nature which inhibits the type of innovation that the united states has historically been known for.

There aren't many chinese who start a business in their garage which goes on to become the next google or apple. Perhaps the state's "control" prevents that type of innovation and progress?

The timing is interesting.

Steam, microsoft and many others who previously accepted bitcoin dropped support for btc before this latest crash which could indicate it was planned and orchestrated on a large scale. The large majority of short orders across crypto futures exchanges could also indicate many knew this recent drop was coming months ahead of time.

I hope people realize bitcoin's price decline has nothing to do with it being a bubble. The price decline has other causes: high transfer fees, south korea and china proposing to ban crypto, DDoS attacks on places like bitconnect and so on. Bitcoin would appear to be under attack from a number of different avenues. Maybe its not too farfetched to say bankers are the ones pulling the strings, using their influence to attack bitcoin, which happens to be their biggest competition at the moment?

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Good news!

There's a chance this bill is only political in nature and being used as a bargaining chip. Right now russia is under economic sanctions from the united states and europe. Russia could offer to kill this crypto legalization bill for leverage. They must know central banks don't want crypto legitimizing legislation passed. If russia endorses crypto that could be like other countries legalizing marijuana. It makes the united states and other nations look bad when they can't be as progressive or innovative as foreign governments who are decriminalizing drugs & engaging in other progressive laws, while the united states and other major powers fall behind.

Central banks may be behind anti-russian sentiment in the world. Russia may be the only major world power which isn't currently under control of central bankers, which could lead to them seeking ways to weaken russia and divide it from within.

This might sound like something that has a chance of being passed, but over the long term it could easily turn into a bargaining chip russia is using in an effort to ease economic sanctions which have been leveled against them.

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IBM was bought out by a chinese firm and is now rebranded as "Lenovo". Anything with the Lenovo trademark on it is what used to be IBM.

Discussing what led to IBM's downfall would make for an interesting discussion. Unfortunately, I don't think anyone here knows what circumstances led to its demise. Corporate culture appears to be one of the leading failures of american big business. Many executives feel entitled to fly on private jets on the company tab and engage in otherwise wasteful and expensive lifestyles the company covers. Such led to the downfall of General Motors and Chrysler which had to be bailed out.

By contrast, walmart executives fly on regular airlines and sleep in cheap hotel rooms.

There's a claim that union fees are too high which leads to american business failing. What disproves that claim is Ford having the same union issues as Chrysler and GM and still managing to be competitive.

IBM might have failed but Dell and other american based PC manufacturers are still going strong.

I don't think any of the altcoins or forks have what it takes to dethrone bitcoin. There's a lot of hype behind ethereum, bitcoin cash and similar crypto. But not a lot of legitimate facts to support those claims, afaik.

I think running a masternode is very similar to mining. It requires a sum of money to be invested. Then a certain amount of time before a person can hope to make their investment back with a profit.

Masternodes could be a good system of encouraging HODL as it requires coins to be stored over time without being sold or spent in order to earn a passive income. They could also be a good means of expanding into long term interest markets similar to what bank accounts have. An area crypto hasn't offered much support for. I see masternodes as methods of encouraging HODL while reducing speculation, which could promote better price stability and lower volatility over the long term.

It should also be said that masternodes are a system utilized by dash and a few alts. Its not something that is supported by all coins but over the long term we could see some benefits from this type of system which aren't brought up often.

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One question with china's strategy is whether their communist government can develop and manage an electronic payment system better than the private sector. This question also applies to socialist venezuela and other historical instances where similar things have been attempted.

Part of the reason venezuela isn't in the best shape economically involves their socialist state waging a war against all forms of capitalism in the country. This war destroyed jobs and drove private enterprise out of the country. The socialist state was unable to create jobs, distribute resources and create economic opportunity better than the private sector, and so we see the shape venezuela is in now.

It is possible we will see china make many of the same mistakes venezuela made as they seek to bring things like electronic payment directly under the state's control.

It may be that heavily centralized political structures like a communist government lack the competition necessary to run programs which are efficient. In the business world, it is survival of the fittest to a degree. Centralized states have no competition which could contribute towards them becoming wasteful, inefficient and dysfunctional.