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I had to read it many times to understand what is the point of you making a loan when you already have money that you invested in bitcoin and you can use it? I have a question:
The day you took your money and decided to buy bitcoin, what was your deal with it? your goal was to buy bitcoin and make hodl and never spend that bitcoin and you die without spending the bitcoin? was that your goal? or was your goal to buy bitcoin and hodl until it increased a lot and then you spent it in the real world?
when we make an investment the objective is to make a profit and then we use that profit, and we continue to invest and then we use the profit, always keeping the principal to generate more profit. it makes no sense to make a loan when you could sell a part of your bitcoins and leave another part until you had a big increase to make more profit
My goal is to never sell the Bitcoin, and to leave it to my children after I die. I will teach them about the first principles of money, and why Bitcoin is the greatest, hardest money ever created, so that they never sell it. Their cash can be stolen through inflation, their gold can be stolen by anyone, and their land can be stolen by eminent domain or asset forfeiture. Their Bitcoin can never be stolen, so long as they know how to hodl it. |
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I like to think Satoshi is alive. He put the 1MB block size limit, which made Bitcoin ultra-secure. I believe he didn’t realize at the time what this meant, but once he saw it, he decided to leave the core principles of Bitcoin alone.
This is why his wallet hasn’t been touched. Satoshi knows that Bitcoin is the greatest store of value in the history of mankind. Why would he trade his Bitcoin for fiat dollars?
I like to think he is still working to make Bitcoin better. He now uses his real name, and nobody knows that he is Satoshi. There are many reasons why he would want to keep his identity a secret. Mostly because it would make Bitcoin feel less decentralized (although there is absolutely no way to stop it’s decentralization at this point). This was the main downfall of all the internet money that came before Bitcoin. Adam Back talks about this in his interview with Robert Breedlove.
I hope Satoshi is making billions of dollars, and has no need to sell his Bitcoin because Bitcoin is the strongest property right humans beings have ever obtained.
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Public Service Announcement:Where that road leads: Liquidation.For example, from someone who started out exactly with the oh-so-clever idea that you state in OP—with lower leverage than you think to use, “in case the price drops”: Now, I want to kill myself... or at least, take up alcoholism as a hobby. (Someone, please quote me.)  Finding that loose change helped so much: $48.82 is now a lot of money to me. My finances have become dollhouse-sized.  Image: A dollhouse handmade by someone’s grandfather (Dave Parker, 2007). Surely a mansion, compared to what my scaled-down finances can afford.A few months ago, as I nurtured my growing BTC long-term savings and a zoo of alts, I was throwing around $10k and $40k chunks of stablecoins. [...] I am now the proud owner of 0.0495 BTC plus a handful of sats, with a liquidation price a little bit under $19.2k. If Bitcoin somehow breaks below $20k, the whole account is so small that I can hold a dollhouse yard sale of miniaturized alt-dust to raise $50; another $50 infusion would push my liquidation price down by >$1,100. Eventually, I will get around to freeing my itty-bitty dollhouse bitcoins from the encumbering debt of around $853. Meanwhile, I can hold a dollhouse tea party. $48.82 is now a lot of money to me. Finding that loose change helped so much. This person was apparently borrowing against their Bitcoin in order to purchase more Bitcoin. This sounds like a terrible idea, because if the price of Bitcoin drops, then you’ve lost value in the equity of your original Bitcoin, and you’re paying a higher price for the new Bitcoin because you have to pay off the loan.
A few months ago, I bought on margin between $35k and $43k. Some things went wrong, with complications from other transactions; leverage wound up higher than planned, but still at what seemed a "safe" level. Then, I held through $48k because I do not want to sell any BTC, ever.
I was one of the idiots trying to increase LTH BTC by leveraging BTC to buy more BTC in the dip, then slowly repaying the margin loan from other income. (Plus doing some of that "borrow against your BTC!" stuff for other purposes; this is the succinct version.)
That's similar to what Saylor does. Why shouldn't I do it? Oh, yes, because Saylor has access to lending terms that are not insane.
Exchange margin accounts make loans on the worst possible terms: If the fuzzy-notional price of an oracle (not even the real market order-book price) dips even one microdollar below exactly $x for even one microsecond, then a robot instantly trashes your collateral. Sells down, market-dumps - with liquidation penalty.
This is not something I would recommend doing at all. However, I never want to sell my Bitcoin. I want to leave it to my children, and teach them about money and why they should buy Bitcoin. You never sell the family gold, and you never sell the family farm. My dad sold a farm in exchange for an acre with a house; and now that farm is worth 30x what he sold it for, and his acre is maybe worth 3x after 20 years. I don’t want to make that same mistake. |
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If you sell your Bitcoin and have to pay taxes, then you’ve lost your Bitcoin to whoever bought it. So long as you live within your means (which is what a Bitcoin based economy teaches us), wouldn’t it make more sense to keep your Bitcoin and borrow the money?
No, it wouldn't. It doesn't actually. Because in your argument you are obviating the increased purchasing power of Bitcoin, with which it is worth selling to enjoy the benefits while maintaining or even increasing purchasing power. Stop listening to the snake oil salesman Saylor. Those who sold $1,000,000 worth of Bitcoin for $10 in 2011 have lost about 25% of that value. If they borrowed smaller amounts as they needed it (with the means of paying off the loan, and the ability to sell some Bitcoin if times got tough), they would have over $2 billion in Bitcoin.
You are cheating yourself. Like selling $1M for $10? What the **** are you talking about? It will always be better to sell small pieces than borrow because in order to delete you will have to deposit at least twice as much, giving up your private keys, and with the volatility of Bitcoin, you will soon receive a margin call. Sorry, I may have worded that wrong. What I mean is, if I sold 100,000 Bitcoin at $10 a coin in 2011, for a total of $1,000,000, my million dollars would have lost 25% of its purchasing power due to inflation- while the Bitcoin would be worth $2 billion. |
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You are late for this. This is so 2021 what you are saying.
The one who popularized this last year was Michael Saylor, to the point of recommending to people that if you have a paid off house, take a mortgage and buy Bitcoin with the money they give you. Soon other Youtubers jumped on the bandwagon, like Max Kaiser.
I’m not saying use your house as collateral to buy more Bitcoin. I’m saying use your Bitcoin as collateral to obtain more property (specifically investments that will earn you more money). If you acquire a significant amount of Bitcoin it is much safer to sell or spend small parts than to borrow against it, even if you have to pay capital gains tax. Better to pay tax than to lose your Bitcoin. [/quote] If you sell your Bitcoin and have to pay taxes, then you’ve lost your Bitcoin to whoever bought it. So long as you live within your means (which is what a Bitcoin based economy teaches us), wouldn’t it make more sense to keep your Bitcoin and borrow the money? Those who sold $1,000,000 worth of Bitcoin for $10 in 2011 have lost about 25% of that value. If they borrowed smaller amounts as they needed it (with the means of paying off the loan, and the ability to sell some Bitcoin if times got tough), they would have over $2 billion in Bitcoin.
Yea the trouble is that you will have to hand over Bitcoin to whomever you borrow the FIAT
from, this means you lose control of that Bitcoin and when the value falls you will have to
give them more Bitcoin to cover the value of the FIAT loan, its like a "Margin Call".
Why would you have to hand over your Bitcoin? Perhaps you do now, but I am talking about the future when Bitcoin is more established. You don’t have to move out of your house when you use it as collateral. You only have to prove that you possess the asset that you’re using. [moderator's note: consecutive posts merged] |
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Have any of you heard of “Buy, Borrow, Die”? It’s what billionaires do, and it’s why they never pay taxes. If more Bitcoiners followed this strategy, the price of Bitcoin would also rise because we would have more holders.
I get you and this is how I love how Robert Kiyosaki inspired people about debt and taxes and it might it's good if you watch this short clip of him. https://www.youtube.com/shorts/vZv-7NqI3NMThis man I most admire, it's sure you've learned a lot with him and I think this idea is also good to apply if you want to invest in Bitcoin and aim for a target range time so that you can get paid the interest. Your idea seems good, but make sure you can handle it very well. There should be a game plan. I have seen videos with Robert Kiyosaki before, and he makes a lot of sense. You don’t want to borrow money against your Bitcoin for something like a car. You want to borrow the money to invest into rental properties or some other business that will make you money. You could sell the Bitcoin and live your entrepreneurial dreams; or you can borrow the money, live your entrepreneurial dreams, and keep your ever rising Bitcoin. |
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It could be a tragic end when there is a bear market and more than half of BTC value drops. If the lender is not reassuring I guess this will work. Isn't something like this already in a Defi platform?
I wouldn't be getting into a loan if I have BTC. What I can suggest is to keep your coins and when ATH, you sell. That's what you should do and then wait for the bear market to come as it always does. You can do whatever you plan with that fiat.
If I sell Bitcoin once it reaches an ATH, and it continues to rise, I will never be able to recoup my Bitcoin. People sold their Bitcoin when it reached an ATH of $10. Suppose they made a million dollars. If they held their Bitcoin and could borrow against it, they would have $1,000,000 to invest in a business, plus $2 billion in Bitcoin. |
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Have any of you heard of “Buy, Borrow, Die”? It’s what billionaires do, and it’s why they never pay taxes. If more Bitcoiners followed this strategy, the price of Bitcoin would also rise because we would have more holders. Basically, you buy an asset that is sure to appreciate. What you lose in interest, you gain substantially more in equity- allowing you to borrow even more. This is why I said I wouldn’t borrow more than half of what Bitcoin is worth at any given time. This will ensure you do not lose all your Bitcoin.
https://www.wsj.com/amp/articles/buy-borrow-die-how-rich-americans-live-off-their-paper-wealth-11625909583
This seems like a smarter move than to sell the Bitcoin for fiat money. If I sell, then I have to pay capital gains tax. When the cash is borrowed, there is no tax. Since I still have the Bitcoin, then I will gain when the price rises. If I only have fiat, the “price” will always go down because of inflation.
Does anyone else plan on doing this?
I have been trying to get the real picture of what you meant. I read through twice and I was able to understand that; When you have enough bitcoin maybe amounting to $100,000 you will have to borrow fiat of half the value. Let's say $50,000 and use your bitcoin as a collateral. When your bitcoin rises to Let's say $130,000 you will pay your debt with the bitcoin and still have enough left in bitcoin. The whole scenario was sounding fine until you said that you will clear the debt without selling the bitcoin. Let's assume it was a mistake. Meanwhile, how long loan are you gonna get, how will you know if bitcoin will bull or bear and how will you be able to prove to the lender that you own the bitcoin. By sharing the address for him to checkup on blockchain? Not a good idea, or by sharing your secret keys, not also a good idea or by showing the person your bitcoin balance? Please explain your idea very well. Not exactly. I don’t plan to live on Bitcoin alone. I will still have a job that ensures I can make the payments until I invest in enough things that offer a steady return. [moderator's note: consecutive posts merged] |
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I don't get you. Based on what I understood you're planning to borrow fiat once you've got enough bitcoin. Does this mean you're planning to borrow money placing bitcoin as the collateral. For borrowed money you need to pay regular interest.
Maybe this can turn to be effective, if the borrowed money is invested on something that brings you regular income.
Yes, if I need something, I would borrow the money instead of selling the Bitcoin to purchase it. Michael Saylor talks about this. If I have to pay 5% interest, but Bitcoin’s price raises over 5% a year, then I would be making money. If I sell the Bitcoin for fiat, then inflation will eat up that money. This is apparently what everyone from Elon Musk to Donald Trump does. They don’t actually have any money. They just have property, and borrow against the property because the property is more valuable than the cash. |
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I don’t have enough Bitcoin (yet) to borrow for anything significant, but this is my ultimate plan. When I get enough Bitcoin, I would borrow no more than half its worth (in case the price drops), and then I would still have Bitcoin along with whatever property I buy with the borrowed money.
This seems like a smarter move than to sell the Bitcoin for fiat money. If I sell, then I have to pay capital gains tax. When the cash is borrowed, there is no tax. Since I still have the Bitcoin, then I will gain when the price rises. If I only have fiat, the “price” will always go down because of inflation.
I hope Bitcoin will eventually replace the fiat system, but until then, the market for cash favors borrowers over savers. This seems like a win-win situation.
Does anyone else plan on doing this?
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A weird question to ask if you mean 'a' as 'one', since from what google tells me, one metric ton of gold is worth $46.7 million, whereas 1 Bitcoin is worth $23.7k.
Yes, I know one Bitcoin is much cheaper than one ton of gold, but there was a time when one Bitcoin was cheaper than one gram of gold. I do not mean “would you take one Bitcoin over one ton of gold today”, because the obvious answer is the ton of gold. However, I believe one Bitcoin is inherently more valuable than one ton of gold; regardless of what the market currently says. |
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But of course, that word “valuable” must be compared to something like fiat, which is think is more useless than toilet paper.
? Most of us here are fiat haters (rightfully so), but yea that's too much of a stretch, ain't it? I'd like to see you to live in today's world(in 99% of places) without fiat. Hope you can pay with toilet paper.  Lol I was being facetious, but in the grand scheme of things, fiat is useless. I always consider when the Germans were burning money to keep warm. In that sense, it was about as useful as toilet paper. |
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But of course — since you're asking Bitcointalk, a Bitcoin forum, then it's quite safe to assume that 90%+ of us here would say Bitcoin is "more precious".
Perhaps more valuable is a better question. I agree, Bitcoin is infinitely more precious than gold. But of course, that word “valuable” must be compared to something like fiat, which is think is more useless than toilet paper. That’s why I like comparing Bitcoin to gold. I have absolutely no use for gold, but at least it’s shinier than paper money. |
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There's 244k tonnes of gold that has been mined from only 3 countries. There might be gold deposits in a lot of other places (and areas we can't access like beneath the ocean).
I think there's likely a time where the number of bitcoin will become more scarce than the number of tonnes of gold, it might be a matter of when.
Yes, Bitcoin is already far rarer than pounds of gold, and the price is similar. A ton of gold is about $55 million right now. That price would make one satoshi 55 cents, and still wouldn’t make me a millionaire  |
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It seems a majority of the time, when Bitcoin is compared to gold, it’s compared as 1 BTC to 1 pound of gold. Currently, they are about the same price in fiat dollars. This seems crazy to me, seeing as there is over 500 million pounds of gold, compared to 21 million Bitcoin forever. That means Bitcoin is on a ridiculous sale right now.
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People like to think of Bitcoin as a super-dollar and compare it to fiat, but I like to think of it as a metric ton of gold. That would mean each satoshi is the equivalent of a centagram of gold.
According to the USGS (The U.S. Geological Survey), about 244,000 metric tons of gold have been mined. That is about 537,927,920 pounds of gold, so Bitcoin is already rarer than pounds. Accounting for gold on the 16 Psyche asteroid and other planets, there seems to be a never ending supply.
Do you think this would make Bitcoin more precious than a metric ton of gold, especially considering it cannot be confiscated and travels at the speed of light?
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There's a lot to unpack in your friend's quote, I'll only address some of it. Bitcoin needs a network to operate. Right now, that network is the Internet. Long before we have to resort to using post-apocalyptic mesh networks, we'll get along just fine using overlay networks like Tor. There are a lot of very determined, very intelligent Bitcoiners with "hacker"[1] mindsets that are willing to die on this hill. I don't believe the regulators have a hope in hell of stopping this thing. [1] The Conscience of a HackerI agree with this 100%. I am not worried about Bitcoin because I will continue to learn how to use it. I don’t care if it’s worth $100 on an exchange. I believe Bitcoin is real money. I just like to have answers other than “oh, that’ll never happen”, because shit happens. I do not trust the government, and I do not believe a manufactured civil war is beyond the realm of possibility. I’m thinking about how we will keep Bitcoin going if some apocalyptic event does happen. I believe this is important- just in case. If Bitcoin is to survive for a thousand years, then it must outlive governments. |
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No the US does not have code that can be sent out as a 'Kill switch'. The global networks are just too independent and self-healing for any attempts at 'killing the internet' to have long-term success. Yes the various countries that hold the major DNS servers and main fiber trunks end-points can easily muck things up for a while if they want to and can certainly take down/control networks within their borders. Thing is, As China found out when they tried having the GFW redirect certain address queries eventually ways are found to circumvent it.
The most prominent example of how the internet functions outside of ANY government control is the DarkNet/Web which is comprised of a gazillion independent servers that are directly accessed via their actual TCPIP addresses. Unless one takes down every single ISP along with every possible way they can communicate (fiber/radio/old-school copper/etc) with each other in every country on Earth the networks will survive. Won't be particularly fast or reliable though. I understand that there is <5% chance that any of this will happen. I was having this conversation with someone, and I said there is a way to bypass practically any regulation, and this is what they said: Right, but those still require an internet connection to your ISP. Once ISP's are forced to authenticate all user's QR code on their proprietary routers (which you cant opt out of) were fucked. The only way BTC will work is with decentralized radio mesh networks…..
I understand what you're saying, but once the proliferation of Digital ID's come in, the authentication technology will change. CCP blocks everything at the national firewall level, where as future censorship will be at the local, router level. I work in IT and cybersec I cannot confirm whether they work in IT, but what are your thoughts on this? |
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Um, in what sort of reality does one live to think that the US or any modernized country would ever 'shut off the internet'? For virtually all countries these days ALL communications be it telephone, data exchange, video, etc. sooner or later runs through the internet so any country deciding to block the networks in said country is simply NOT EVER going to happen unless they want to commit economic suicide. As for any country being able to globally kill the internet, again that is simply NOT possible because by-design the networks WILL find other routes to re-establish the links needed to find each other.
I agree it’s highly improbable. However, it’s the #1 criticism I hear, and it’s not impossible. The United States has an internet kill-switch, and it can be pulled by any president. Russia has temporarily shut off their internet to the rest of the world, and China is making it increasingly harder to use VPNs and Bitcoin. I don’t see this happening anytime soon, but it seems like it would be smart to secure Bitcoin for absolutely anything. |
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Okay, if I’m understanding correctly, if the United States shut off the internet then we would need someone in Mexico or Canada to confirm all transactions over radio, which would probably be impossible. I’m guessing the best use-case for this type of transaction is if we need to escape the country, and we could pay someone over HAM radio to meet us?
By having the Internet shutting down, I think Bitcoin is doomed really until the network is back up. But on the other hand. If the Internet shut off for even a day, would the entire world not turn into a chaos of such a large scale it would be so much more important to prioritize food and survival over anything else, including cash and Bitcoin?
I agree we would have a lot more problems, but this seems to be an argument in favor of gold. At least with gold, we could have something to start a new economy. I’m wondering if it would be smart to make several paper wallets while we have internet, and put some satoshis on each wallet to be exchanged if the time comes. Is that the only way to use Bitcoin as a means of commerce in a temporarily offline society? [moderator's note: consecutive posts merged] |
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