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1  Economy / Economics / Re: Would crypto gain full intrinsic value? on: October 30, 2021, 07:09:48 AM
With the high level of volatility and constant fluctuation in market capitalization on crypto currencies would there ever come a time we would trade crypto based on the value it has in it's self and not in exchange for fiat currency. Many countries has now adopted crypto as mode of payment but we are still faced with the issues of price irregularities. If we decide to adopt crypto fully as a global legal tender how do we deal with this price fluctuation.

This is the edge fiat and centralized currencies have over crypto and this has made so many shy away from doing legal business transaction using some crypto most especially during bear market. Can this issue get a remedy?

There is no such thing as "intrinsic value". Maybe the closest concept is the amount of usable energy a product/service contains

The edge that you describe is "Unit of accounting". This must be the most strange concept in human history. Unlike KG/LBS or Meter/Foot (that can be verified scientifically in all the labs around the world), the unit of accounting in each country's financial system is its fiat money. And to ensure its stability, central banks look at CPI to monitor the inflation and adjust the money supply in according.

This whole concept of price stability of fiat money is just based on people's imagination and blind trust, it has nothing to do with market supply and demand. For example, FED created more than 5X money in a few years after 2008 financial crisis, and the goods and services did not increase that much, if not decreased, but you never see anything's price rose by 5x in that period. Why? Because most of the people do not have financial knowledge, they think USD is just like LBS/FOOT, have a fixed value and it is used to measure the value of anything else, regardless of how much it is produced

But there is no need to wake up everyone when they are sleeping, that is how today's financial system works. They can believe in what they want to believe, while smart people profit from it

In cryptocurrency, you don't have that imagination and blind trust, so you see the value of cryptocurrency fluctuates because of supply and demand. If one day, people start to use cryptocurrency to measure value, then they will discover that everything's price measured by cryptocurrency will keep going down, because of the limited supply of coins and forever increasing supply of goods/services. Those who hold coins would just become richer and richer by doing nothing, and business making production will find out that when final product is released, its sale price already got lower than the cost, so they end up doing nothing too. And that's why modern monetary policy don't take this approach, it will discourage any economy activities and cause recession


2  Economy / Economics / Re: Really, why bitcoin has this value? on: October 24, 2021, 02:16:33 AM
Although bitcoin is currently around $63k, but this does not guarantee bitcoin will continue to be worth, this is because bitcoin has a decentralized concept so that the price goes up or down depending on the community, maybe the price will continue to rise because the community is getting bigger but we have to be realistic that one day bitcoins can be worthless.

This is really a concern that everyone has, I want to analyze it from pure buy and sell power angle

I have followed the price movement for many years. What I observed is that some kind of price stickiness in it, so it maximum crash 80-90 percent.

I think this is due to combined effects of 2 major driven factor:

1. dramatically reduced selling pressure when the price has gone down so much
(For those who bought the top, it doesn't matter if they sold at 90% loss or 100% loss, they have lost most of their investment anyway, so they end up do nothing and hodl, and this in turn reduce the sell pressure)

2. dramatically increased purchasing power of market buyers
(With same money, you can buy 10x more coins when price has crashed 90%)

That's why when it crashes 90%, the sell pressure will disappear and price will start to stabilise. As a result, if you could drive the price up 100x, even after the crash, you could raise the new bear market bottom to be 10x higher than the old bear market bottom. And that will draw new participants

A big limitation is the fiat money inflow channel, today many banks are restricting it, trying to starve the cryptocurrency market, but with the rise of USDT and other stable coins, it seems the community has find its own way of generating liquidity without fiat money inflow, this is the new development and will raise the price by a few magnitudes if keep going without restriction


3  Economy / Economics / Re: A tale of the two parasites on: October 24, 2021, 01:54:21 AM
There's always the other side of the story for each of those parasites. There are poor people but they're not parasites that are opposites to the description that you've given.
There are also rich people who are not parasites and they're living normally and want to contribute and opposites the description that you've given.
The sad truth is that there really are people that don't want to contribute to the economy and going up of a country. They're as is what it is with their living.

I don't like calling anyone parasite. It is based on the simple definition that everyone must contribute to someone else in society, otherwise he is a parasite. That is a communist way of thinking.

Many people born in rich family, they have plenty of resource that can support them for generations, they don't need to contribute to society, and it is a blessing if they don't start a war against another country just because their benefits are hurt

Many people born in poor family, they have no chance to get a good education or job to support themselves, they end up receiving social benefits, it is a blessing if they don't go on street and rob other people
4  Economy / Economics / Re: A tale of the two parasites on: October 21, 2021, 03:37:58 AM
About the rich, they do add value sort off during their investment in the country that adds to the GDP and increase per income to their employees. The employees are made responsible to their families as they paid and they take care of their children, send them to school, feed and provide shelter.

The rich also add value because of different types of taxes levied against them and their businesses. The monies being generated from that are used to provide social amenities to the people.

Likewise not all the poor are parasites. Some poor have good knowledge to be better but may lack capital to do something with their knowledge. The poor are employed in government and they develop good policy to the government, they are very dedicated to work for progress to the area of life they find themselves.

No, the "rich" parasite does not add any value by paying others. He is not creating anything for anyone. You do not understand the difference between money and value.

Please, read a bit more carefully and see if I say that all poor are parasites in any part of my post.

This is interest and worth debating. Value depends on supply and demand, as long as people want money, it has value. So by giving other people money in exchange for their product, you are doing fair trading and satisfy other's need of money, how is that not creating anything for anyone?

The real question might be: Why people need money? Does money has value? And where is that value coming from?

By the way, if you want to eliminate rich parasites, then you should first disable private ownership of properties/land, since every land owner is able to do rent seeking and live forever on passive rent income. But if you remove the private ownership of properties, then you have communism society, no rich parasite for sure but lots of politic parasites

And another question, does it really matter economy being strong or weak, as long as most basic needs can be satisfied and national defense is strong enough, like Russia?

5  Economy / Economics / Re: Everything you wanted to know about BTC futures but were afraid to ask! on: October 20, 2021, 02:43:44 AM
OMG, im shocked, really its walls of text to explain one way of investing? I mean why there is need to create such complex ways of investing in Bitcoin world?
Buying is best investment, why complicate things? Often its to confuse less bright or people less beign able to manage their funds, to make them make wrong decisions and loose money.
I really don't like complicated instruments of investment, banks love to create them to steal money from customers over and over. Its really sad how many people falling for that.

Totally agree!

Although there is a need for hedging price risk for a future delivery of commodities/goods, such kind of risk does not exist for bitcoin, since it is always delivered instantly in an hour

Futures and options for bitcoin seems to be merely a complicated way of gambling using leverage
6  Economy / Economics / Re: Really, why bitcoin has this value? on: October 20, 2021, 02:23:34 AM
At some point I am really messed up and lost in vein when it comes to bitcoin's price. I think that every second it gets more and more a victim of speculation and gets abandoned from its original idea.
If bitcoin could perform very well at 6K some months ago, why it become 60K after some months? And then it went back to 30K but was still functioning very smoothly, i.e. it was doing the job it was created for.
Again, If bitcoin could perform well at 30K some weeks ago, then why it worth 60K right now? I just don't get it when people say that bitcoin isn't speculated and all of these prices are just natural.


It is very similar to the situation in container transport right now, the price of each container has risen 1000% since last year, because limited capacity and more goods waiting to be shipped before Christmas season

Bitcoin is just like a money container, when lots of money need to be transferred/stored using bitcoin, and there are just so many bitcoin available on market, then each bitcoin would cost much more to acquire.
7  Economy / Economics / Re: Elon musk now the richest man in earth on: October 17, 2021, 12:33:57 AM
My question is can Elon musk sustain this new found financial spot for how long? We have seen bill gate coming back to this spot from time to time and occupying it for a longer time. Now that Elon musk is said being the richest in the world , is he going to keep to this status longer or we are yet going to hear another story of selling off assets because Elon musk is now known as a public stage man Grin Roll Eyes So what do you think?

They are definitely not the richest person on earth, far from it. The wealth they hold is barely a few week's QE of one of the many central banks. I also remember a few months ago, there is a report claiming that one trader's position in an exchange is larger than all their wealth.
8  Economy / Economics / Re: What will be the effects of China's central bank declaring all crypto illegal? on: October 15, 2021, 01:39:41 AM
My taught On the Chinese people? It will make cryptocurrencies like Bitcoin illegal. Anyone who uses crypto becomes a criminal. I don't actually think their laws will get rid of crypto. Instead, people who don't like being under the harsh thumb of the CCP will utilize privacy cryptos like Monero. I won't be surprised if new internet and cryptocurrency privacy is developed because of the Chinese. There is now a market of potentially 1 billion people who want internet and monetary secrecy. Even if only 1 percent of the Chinese people want/need privacy crypto and internet that's a market of 10 million users! The CCP has planted the seeds of the rebellion that will throw them out of power and they don't even know it.


There are many misunderstandings regarding the chinese ban of cryptocurrency trading.

The original text from authority is:
(二)虚拟货币相关业务活动属于非法金融活动。开展法定货币与虚拟货币兑换业务、虚拟货币之间的兑换业务、作为中央对手方买卖虚拟货币、为虚拟货币交易提供信息中介和定价服务、代币发行融资以及虚拟货币衍生品交易等虚拟货币相关业务活动涉嫌非法发售代币票券、擅自公开发行证券、非法经营期货业务、非法集资等非法金融活动,一律严格禁止,坚决依法取缔。对于开展相关非法金融活动构成犯罪的,依法追究刑事责任。

It clearly says, the cryptocurrency related exchange business is illegal, means exchanges and centralized dealers are illegal. But it did not say the trading of cryptocurrency is illegal.

Of course it will be difficult to trade without centralized exchanges, but there are still decentralized exchanges and many private person that trades cryptocurrency, those are not illegal unless you trade daily as a business. For example, a chinese family, farther buy 0.1 ETH from his son, who mined ETH using his graphic card, how is that illegal?

And  when a foreign dealer trades with chinese people on a foreign platform, even by chinese definition that service is illegal, but in practical a chinese law have no effect to any person/entity that is not in china

So the whole chinese cryptocurrency ban is aimed at centralized chinese exchanges and professional chinese dealers, nothing more. Many western medium misunderstood that, showing that they don't know much about cryptocurrency either






9  Economy / Economics / Re: Money and wealth as the major religions in world. on: October 08, 2021, 09:05:39 AM
Money or wealth is the dream destination of many people in the world

Religion is the total believe of a group people on a particular being.
Most or everyone in the world today in which I am included believe in accumulating of wealth and making money.

More than Half of the life span of the human race is centred on making of money or wealth.

Making money legally or illegally, accumulating of wealth is the believe of most people in the world.

I stand to be corrected or cencitize


Let me give you some piece of paper and call it money, do you believe in it? (might be a currency from an island country that you have never heard of)

What you believe is not money or wealth itself, but the ability of something that can get other things you want.

Essentially that is a power to let others serve you and satisfy your need, that's the real motive behind money or wealth seeking

If you are a king, you don't seek money or wealth, since those are just tools that you can create at ease

If you are super rich, you might not seek them intentionally, since all your needs are satisfied for hundreds of years to come

If everyone have billions of money like in Zimbabwe, then you must seek much more to satisfy your need
10  Economy / Economics / Re: The EU takes 9 more jurisdictions out of the Tax Heaven list on: October 08, 2021, 08:33:47 AM
A global tax of 15% should be required to be considered for business as an equal.

How about a zero tax?
Then everyone should be indeed equal and nobody would have to spend millions of in searching for millions in tax evasion.

As I said before, businesses and corporations are not poeple, they don't spend millions on mansions, cars, and hookers, cut any deductible expense that could be used by the employees as a backdoor, and set the tax to null. All the money they will be getting in paychecks from the company be it wages, dividends anything will sure be taxed when it comes to their personal income tax. So why fracture this in 100 steps and make it both overcomplicated and easy to avoid when the results will be the same in the end.
Anyhow, that money hidden in tax havens will still be used sooner or later, they will return to the economy, they will be spent, and then taxed, at least with VAT.


Exactly, tax should all be zero when government can get unlimited money from central banks. The government's tax income is neglect-able comparing with huge amount of fiat they borrowed each year from central banks, why government still tax in 2021 is out of understanding of who understands modern monetary policy
11  Economy / Economics / Re: Bitcoin assets cannot be blocked - is that helping terrorists? on: August 31, 2021, 03:27:45 AM
Super power do not like to be blocked, large nations have demand for unblock-able funding
12  Economy / Economics / Re: Crypto is not limited till buying Bitcoins, it is beyond this. on: August 27, 2021, 12:07:23 AM
I just saw a movie series about an ancient king seeking immortal life by uploading his memory into another new body every time he dies.

It is quite similar here, since memory is just lots of data and logic, you could upload your data and special logic onto blockchain using smart contracts, it could run many generations after you died. This has been simulated in many sci-fi games but all those systems failed eventually, since there is a single point of failure. Now it is actually making some sense on blockchain

Constructing the rules of an ideal society, and let the rules run on blockchain for thousands of years, even better, those rules have the ability to self-upgrade, we are just seeing the beginning of this revolution for humanity
13  Economy / Economics / Re: Crypto is not limited till buying Bitcoins, it is beyond this. on: August 26, 2021, 06:43:08 PM
We saw threads where discussions sparked about how will the poor take the advantage of crypto and all of them limit their thinking to what will happen if BTC skyrockets. There were lots of great answers, but we have a different approach here in this matter. Even if the poor believe that they have missed the BTC train, why don't they spread their vision and look around?

We have:
+ NFTs (we know about one user who sold an NFT for $60k that he won for free - a life changing experience)

+ DeFi tokens (liquidity pools, staking, farming are all giving huge returns for small investors)

+ P2E (Play 2 Earn is another way to make money by playing games online and getting tokens or NFTs as rewards, some games have different types of rewards)

It is really beyond all of these. From surface, it is a new internet form of private ownership of properties, but deeply inside, it is an immortal spirit that could last thousands of years, like language or religion. It established on humans fear and greedy, providing ultimate safety and growth, which every human seeks, generation after generation
14  Economy / Economics / Re: Nothing about communism: The real cause of hyperinflation in Venezuela on: August 22, 2021, 11:34:49 PM
TLDR,

The only reason for hyperinflation is increased money supply by many magnitudes. Those newly printed money are distributed to a few government officers that owns the oil supply, lots of people in the country does not get more reward for produce anything, thus the supply of tangible products and services are still very limited, then the price of everything just go up

The strange thing is that once price go up, there is usually a higher motive to drive more production, but if it goes up too fast, there is no motive of production, hoarding assets instead become the first choice


15  Economy / Economics / Re: Whatís the nature of consensus? on: August 16, 2021, 08:17:19 PM
I told you in your previous article that consensus is easy in the world of crypto, but it is difficult or impossible in the world of humans, I did not fully understand until now how do you expect consensus to occur in the human world through the spread or acceptance of Bitcoin? Is it enough for Bitcoin to spread and accept it around the world for the consensus you are talking about to be achieved? I did not understand how humans would be able to obtain consensus while wars, hatred, and malice were spreading among the human race? I also did not understand how there can be consensus among countries? Can powerful and rich countries give up their international standing, power and civilization to poor countries? Can there be consensus in choosing one leader who will lead the whole world through one rule, one decision and one laws?

Just like Tulip mania, everyone reached consensus that it is a way to get rich quick. Here it is the same, only the time frame is different: Tulip mania could last maximum a year, while bitcoin mania could last for decades or forever, if the fiat money supply keep increasing exponentially
16  Economy / Economics / Re: Whatís the nature of consensus? on: August 16, 2021, 03:52:04 PM
The most widely spread consensus in the world currently could be English language, it is just a universal way of communication

But that was established during the phase of colonization for centuries, to establish similar level of consensus on bitcoin is much more difficult, currently only prevail in IT nerds and some financial people who have very good IT knowledge
17  Economy / Economics / Re: Where is the value reflected? on: August 16, 2021, 03:43:09 PM
The situation with the use of bitcoin as a means of payment is indeed a big problem for cryptocurrency users. Bitcoin is now bought mainly as a store of value, hoping that due to the rise in its price, it will be profitable. Therefore, it makes no sense to buy goods and services for it, because the transaction time and transaction costs are large compared to other cryptocurrencies.


It has been proven that USDT is much more suitable for payments, since people get used to use USD as base unit of value. Mortgage BTC and get USDT loans would also remove the difficulty in calculating capital gain/loss tax
18  Economy / Economics / Re: Why would people ever use bitcoin if its expected to always go up? on: August 09, 2021, 10:47:19 PM
I couldn't put the full title in the subject line due to character restrictions, but here is the full question:
If bitcoin was fully adopted into everyday life, why would it ever be used for day-to-day transactions if the general consensus was that the price would always appreciate?

After reading several posts on this forum many people seem to think that Bitcoin will always go up. If this were to be the case, why would people spend Bitcoin at all? In this theoretical time, wouldn't it just be a poor financial decision to do?

Or is it thought that in this future where there is widespread adoption the price would stop being so volatile and for the most part stabilize?

Yes, lately the trend is never sell and mortgage it and get loan to spend. It will be used in many different ways, but to buy a cup of coffee is not that important, although doable

It is mostly about those higher level financial usage that normal people typically have no knowledge of. For example, if the pension fund decided to buy bitcoin ETF, then it will impact everyone's future pension, while they might never know about it at all.
19  Economy / Economics / Re: Why bitcoin will appreciate forever on: August 08, 2021, 03:46:04 PM

Bit of a nit, but is money creation actually exponential?  It may accelerate over time, but I doubt exponentially.  Your larger point that increasing the money pool should create price appreciation for scarce assets though.  The amount of speculation though makes it volatile and risky, and nothing is guaranteed to go up forever; not even scarce assets.  The risk is that the volatility will have you at a loss when you need to cash out, and it's not an insignificant one.

Since Bernanke invented helicopter money, money supply has not only increased exponentially, but doubled a few times


https://tradingeconomics.com/united-states/money-supply-m0

Volatility is irrelevant, you could go broke in one day if you all-in for USD/EUR trading with a 400x leverage. You could also have a lower-than-T-bond volatility for bitcoin if you use 0.01x leverage, it is all about the exposure. If you use leverage to adjust all investment products to same level of volatility, then bitcoin gives best return
20  Economy / Economics / Re: Why bitcoin will appreciate forever on: August 07, 2021, 04:06:58 PM
It has been another year and I checked back, my prediction still holds.

During this year, the most common question I get from investors is: What is the use of this thing?

In fact, many things people donít know their usage, as long as they can be sold for fiat money, they are useful

Hedge inflation is still the most easy to understand: Since fiat currency is issued exponentially, scarce assets that have wide acceptance will appreciate

The rise in the price of ordinary goods is a slow process. New QE money often need to change hands many times before reaching the supplier. More often, the supplier is worried that no one will buy his product

But cryptocurrencies are different, they can be exchanged for all those QE money without delay. According to my simulation earlier in this post (investors buy and hold for four years, and then sell 10% every year), the daily net selling of coins is less than 5,000 coins. If the market demand exceeds 5,000 coins, the price will rise.

The key is to understand that it is sustainable since constant fiat money inflow will digest those 5000 coins sell pressure every day

There are 385,000 new babies every day now. Assuming one-tenth of these people need to buy coins to get on this ship, that's 30,000. 30,000 people are competing for 5000 coins every day, and each person gets 1/6 of those coins. These coins are the total amount of all their investments in their lifetime, which can be assumed to be the amount of investment in their pension funds. If each person invests 10,000 USD, the price of Bitcoin can be maintained at 60,000. If they invest 100,000, the price can be maintained at 600K. If they invest 1 million, the price of Bitcoin can be maintained at 6 million.

So once ETF is mature and invested by pension funds, it will get a guaranteed support
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