I think the next bubble will be utterly utterly insane.. with an equal crash(it will stay + 3k or 10k depending on the top). IMO stock market crash... soonish not soon.
Imho hyperinflation needs to become undeniable first, its already underway but it just looks like booming markets at the mo. There is no need for an inflationary collapse of USD in order for BTC to rise in purchasing power by 100x or even 1000x. This scenario could also prove very bearish for gold. The Keynesians get watch on the sidelines, loosing 1%-2% a year, while a massive transfer of Austrian wealth from gold to bitcoin takes place. It could, there's a lot of surplus out there and if even a small part of it is waiting to jump on the train it would be an incomprehensible rise. I meant hyperinflation will likethe excely be obvious before stock markets crash and if that happens then Bitcoin stands a strong chance of taking on the SDR as when it peaks its a reference point to fiat values and the rest of those are completely distorted. There is no need to hyperinflation in order for the stock market to collapse. We can have a deflationary downturn / depression as occurred in the 1930s. One thing to keep in mind is growth in excess reserves in the US. This means the multiplier effect of fractional reserve banking in not taking place. Bitcoin can do extremely well in such a scenario because it is still in the ramp up stage; however gold would get slaughtered. USD may ironically rise with respect most assets with exception of Bitcoin and some of the "senior" alt currencies. You do know what those excess reserves mean right? If they pull them out and start lending, which is ironically what is likely to happen if interest rates go UP without the bribe rate (the interest rate on excess reserves) going up, an extra $26 Trillion can work its way into the M2. That would constitute an increase greater than 200%. Thats one really wound up spring ready to snap back. In order for that not to happen, they have to do two things. Suppress the earnings of financial institutions so owner's equity doesn't creep into those reserves, and keep the bribe rates at least as they are right now proportional to mortgage and other forms of lending that "leads into the economy." In order to have a loan one needs both a willing lender and a willing borrower. If there is no willing borrower there is no loan no matter how willing the lender is. |
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I should point out that I don't see either as being useful as 'money' as long as the USD works fine, and it performs admirably as money at the moment. If I had confidence in this state of affairs persisting in perpetuity I would not be terribly interest in gold, silver, or Bitcoin.
Alot of the time when I read your posts I think you just enjoy listening to yourself talk. Of course, I could be guilty of that myself but I usually don't write in contradictions. Thinking that the USD performs admirably while investing significantly in pm's and bitcoin, at least to the extent that you've told us, sounds ridiculous. Perhaps you meant "tolerably" at best. Given the Fed's 2% inflation policy, USD hegemony in all its forms, QE, legal fiat status for taxes and debt settlement (forced acceptance), etc, I think that would be a more accurate description don't you? It depends on the time frame. If one is looking to preserve wealth for under a 1 month period USD or another of the G7 fiat currencies are an excellent choice. If one is looking to preserve wealth for a period of 18 months or more BTC wins hands down. By the way I am currently invested 102.2% in BTC 0.2% in LTC and -2.4% in CAD. My second choice after BTC / LTC (for diversification from BTC / LTC) would actually be USD or another of the G7 fiat currencies. As for PMs I am staying well away. Ditto for stocks and real estate (the latter because I live in Canada). PMs can crash brutally and even in their best scenario a inflationary collapse of USD are very likely to under perform BTC. One does not have to expect the collapse of USD in order to invest in BTC. |
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I think the next bubble will be utterly utterly insane.. with an equal crash(it will stay + 3k or 10k depending on the top). IMO stock market crash... soonish not soon.
Imho hyperinflation needs to become undeniable first, its already underway but it just looks like booming markets at the mo. There is no need for an inflationary collapse of USD in order for BTC to rise in purchasing power by 100x or even 1000x. This scenario could also prove very bearish for gold. The Keynesians get watch on the sidelines, loosing 1%-2% a year, while a massive transfer of Austrian wealth from gold to bitcoin takes place. It could, there's a lot of surplus out there and if even a small part of it is waiting to jump on the train it would be an incomprehensible rise. I meant hyperinflation will likethe excely be obvious before stock markets crash and if that happens then Bitcoin stands a strong chance of taking on the SDR as when it peaks its a reference point to fiat values and the rest of those are completely distorted. There is no need to hyperinflation in order for the stock market to collapse. We can have a deflationary downturn / depression as occurred in the 1930s. One thing to keep in mind is growth in excess bank reserves in the US. This means the multiplier effect of fractional reserve banking in not taking place. Bitcoin can do extremely well in such a scenario because it is still in the ramp up stage; however gold would get slaughtered. USD may ironically rise with respect most assets with exception of Bitcoin and some of the "senior" alt currencies. |
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Funny how I used to laugh at those people who called gold the "barbarous relic" but since I've discovered Bitcoin I'm beginning to feel the same way. As a former precious metals dealer I appreciate how Bitcoin is so darn easy to use and precious metals are such a chore to deal with. I'm excited to see what the future will continue to bring. Maybe Open Transactions anonymous digital cash secured by bitcoin? Now that would be cool...
That's because gold as money/store of value wasn't outdated until bitcoin showed up. You were right to laugh then, and you are right to feel this way now. So true. Bitcoin was the unexpected "Black Swan." Bitcoin is gold's Black Swan. Sorta has a ring to it. Precious metals have a huge weakness in that it is very expensive and difficult to take delivery. As a result holders and traders of PMs have for millennia relied on trusted third parties to 1) Guarantee the fineness of PMs and 2) Store and transport PMs. Over these same millennia these "trusted third parties" have engaged in their own shenanigans from the debasement of the Denarius during the Roman Empire to fractional reserve banking by the Rothschilds to the conspiracy theories surrounding the German gold at the Federal Reserve Bank of New York. It is these critical flaws with PMs that led to the rise of fiat currencies. Bitcoin solves these critical flaws with PMs by eliminating the need for these "trusted third parties" and their shenanigans. |
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I think the next bubble will be utterly utterly insane.. with an equal crash(it will stay + 3k or 10k depending on the top). IMO stock market crash... soonish not soon.
Imho hyperinflation needs to become undeniable first, its already underway but it just looks like booming markets at the mo. There is no need for an inflationary collapse of USD in order for BTC to rise in purchasing power by 100x or even 1000x. This scenario could also prove very bearish for gold. The Keynesians get watch on the sidelines, loosing 1%-2% a year, while a massive transfer of Austrian wealth from gold to bitcoin takes place. |
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I don't see it happening. Where is all this money going to come from?  From investor's bank accounts Not just bank accounts. It can also comes from the sale of gold and stocks. A 100x rise in the BTC/USD rate could really shake up the gold market since the bitcoin market would then represent 10% of the gold market. Edit: Bitcoin is a direct competitor to gold when it comes to "Austrian" / "Hard Currency" assets. |
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whatever you do, do not go to bed while in fiat.
I think you've got that the wrong way round No he does not. I agree with piramida this is an extremely dangerous time to be a bit bear. |
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Problem here is what if the dollar becomes worthless?
They are printing them to infinity. Not a good currency model that holds value.
Really dumb idea in my view.
it would be better to back it with something like gold.. back a commodity with a commodity. not with an unlimited currency.
The problem is not what Realcoin is backed with. There is market here for backing with USD, other fiat currencies, gold, silver etc., as both e-Gold and Liberty Reserve proved. The problem is dealing with literally hunderds of different regulators of over the world each producing thier own special variant of red tape. But I don't know if I'm following what you are saying in your post. Let's say CaVirtex received regulatory approval to issue dollar-IOUs using the Open-Assets protocol (colored coins). It seems to me that once the product was approved, all CaVirtex needs to concern itself with is redemption of those dollar-IOUs back into account balances. CaVirtex doesn't need to care whether those particular dollar-IOUs went through 10 sets of anonymous hands prior to making their way back to CaVirtex for redemption. And if this is the case, someone from China might happily accept a CaVirtex dollar-IOU at face value, even though they have no plans to redeem it. They just trust that the IOUs will always trade near face value as long as someone is able to redeem the IOUs at CaVirtex. As described that has absolutely zero chance of being approved by the SEC. Bearer shares and notes are explicitly unlawful under federal law. They are unlawful for expressly that reason. It isn't just a US thing, bearer shares have been outlawed most places on the planet. Sure maybe you be able to issue bearer shares in Somolia but then again the coins are backed by dollars they are backed by the promise to rpeay dollars. Any doubt on the legality of the entity casts doubt on the promise to repay. This could work possibly in the UK where as far as I can see it is legal to issue bearer securites. My take however is that Realcoin will drown is a sea of red tape and in the process further prove the value of Bitcoin. |
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You argue about a problem that is only valid for fiat currencies. That problem doesn't exist with bitcoin. So why would anyone want to use a less-secure fiat currency on top of a fully-secure cryptocurrency in the first place?
They wouldn't. They just don't know it yet. Both the Winklevoss ETF and the Realcoin product are gateways. Yes they are gateways but there is a crucial difference with Realcoin when it comes to regulation. In the Realcoin case they have to be both the on-ramp and the off-ramp and this is a serious limitation when it comes to international transactions. Consider first a pure Bitcoin example using existing providers: A person (say myself) in Canada purchases BTC for CAD using CaVirtex. This same person then uses the BTC to purchase goods or services from a US based merchant that uses Conbase (I have done this). Now CaVirtex only needs to concern it self with Canadian regulations since they only provide exchange services in Canada while Coinbase only needs to concern itself with US regulations since they only provide exchange services in the United States. This makes the regulatory process affordable for both companies. Now the same transaction using an unrelated on-ramp and off-ramp would not be possible with Realcoin since Realcoin has to be compliant with regulations at both ends. This is the same limitation faced by PayPal, VISA etc. I completely agree that the obstacle for ideas like Realcoin are regulatory as opposed to technical. It would be hard to argue that Realcoins are not securities, and thus Realcoins would almost certainly fall under SEC jurisdiction. But I don't know if I'm following what you are saying in your post. Let's say CaVirtex received regulatory approval to issue dollar-IOUs using the Open-Assets protocol (colored coins). It seems to me that once the product was approved, all CaVirtex needs to concern itself with is redemption of those dollar-IOUs back into account balances. CaVirtex doesn't need to care whether those particular dollar-IOUs went through 10 sets of anonymous hands prior to making their way back to CaVirtex for redemption. And if this is the case, someone from China might happily accept a CaVirtex dollar-IOU at face value, even though they have no plans to redeem it. They just trust that the IOUs will always trade near face value as long as someone is able to redeem the IOUs at CaVirtex. In any case, as much as I'd like to see it, I really can't imagine the SEC allowing companies to issue "bearer"-IOUs using the blockchain at this point in time. I think these types of products are at least half a decade away... In the above example the CaVirtex dollar-IOUs would only be redeemable in Canada by Canadians. So they would would likely be accepted at face value in Canada but would likely trade at below face value in China since someone in China would eventually need to find someone in Canada to redeem the IOU for them. The discount could easily be 5% or more. The net effect of this discount is to create an effective transaction fee and we are back to the VISA, PayPal, Western Union etc. costs. Of course if they were redeemable in China then they would also trade at par there but then CaVirtex would have to also be regulated in China increasing their costs and again we are back to to the VISA, PayPal, Western Union etc. fees costs. By the way I do agree that these IOUs are securities but unlike the United States where there is one securities regulator there are 13 separate securities regulators in Canada one for each province and territory, further adding to the compliance costs. By the way the Canadian government is trying to create a national securities regulator to simplify the compliance burden but has met with stiff opposition from Quebec and Alberta. The problem here is not dealing with one regulator, that is easy. The problem with international money transfer using IOUs is dealing with literally hundreds of different national and sub national regulators all with different and sometimes conflicting requirements, and with each regulator acting like its own little fiefdom. Ever wonder why we see so many innovative payments systems using IOUs that only work in one jurisdiction but hardly any that work internationally? The beauty of Bitcoin is that it allows one company in Canada say CaVirtex to be the on ramp and another unrelated company in the United States (Coinbase) or in China (BTC China) etc. to be the off-ramp and vice versa. This is not possible with IOUs. |
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You argue about a problem that is only valid for fiat currencies. That problem doesn't exist with bitcoin. So why would anyone want to use a less-secure fiat currency on top of a fully-secure cryptocurrency in the first place?
They wouldn't. They just don't know it yet. Both the Winklevoss ETF and the Realcoin product are gateways. Yes they are gateways but there is a crucial difference with Realcoin when it comes to regulation. In the Realcoin case they have to be both the on-ramp and the off-ramp and this is a serious limitation when it comes to international transactions. Consider first a pure Bitcoin example using existing providers: A person (say myself) in Canada purchases BTC for CAD using CaVirtex. This same person then uses the BTC to purchase goods or services from a US based merchant that uses Conbase (I have done this). Now CaVirtex only needs to concern it self with Canadian regulations since they only provide exchange services in Canada while Coinbase only needs to concern itself with US regulations since they only provide exchange services in the United States. This makes the regulatory process affordable for both companies. Now the same transaction using an unrelated on-ramp and off-ramp would not be possible with Realcoin since Realcoin has to be compliant with regulations at both ends. This is the same limitation faced by PayPal, VISA etc. |
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In addition to the counterparty risk of using the dollar you will have an additional counterparty risk that the "Realcoin"-gang actually has the dollars it claims to have.
It's the same problem with having a dollar balance sitting at an exchange. Does Exchange X really have the dollars it claims to? But with the Realcoin proposal, these dollar IOUs are now tokens on the highly-visible and public blockchain that can be traded in a decentralized manner. This seems to improve transparency. Imagine that all the exchanges follow step ( assuming this is actually approved by the regulators), allowing dollar balances to be withdrawn as colored coins. We'd have: - Realcoins - Stamp-dollars - Bitfinex-bucks - Cryptsy-cash Assuming all the issuers are trustworthy and solvent, the tokens should all trade near par value. But if "something fishy" starts to happen, then we'll see one of the tokens drop in relation to the rest. This would be a market signal that something is wrong with that particular issuer. This will improve market efficiency, because everyone will be able to see how much trust everyone else places on the various counterparties. For example, right now, $1 at Bitfinex is probably not worth the same as $1 at BitStamp, but we currently have no market-driven method of measuring this. This actually happened for a while in 2012 with BitInstant being the market maker where one could trade MTGox USD codes for BTC-E USD codes etc. The regulators killed it. |
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What is being proposed here is to issue a centralized virtual currency not unlike PayPal, e-Gold or LibertyReserve where USD, gold etc., are held in trust by the issuer to back a series of a digital IOUs. The digital IOUs instead of being represented on the issuer's servers are represented as bearer instruments on the blockchain via Mastercoin.
My take is that this will suffer from the same regulatory issues as other centralized digital currencies and payment methods with one of the following outcomes:
1) Remain limited to a small number of jurisdictions and be useless for international money transfer. Examples: Interac (Canada), M-Pesa (Kenya), Dwolla (United States) etc. (Low number of regulators).
2) Become expensive (high fees) and very bureaucratic VISA, MasterCard, PayPal, Western Union, Wire Transfers (Large number of regulators all with different sometimes conflicting requirements).
3) Get shut down e-Gold, LibertyReserve etc. (No regulators)
The key advantage that Bitcoin has is that the on-ramp providers and the off-ramp providers do not need to be related in any way and can be regulated in their respective jurisdictions independently of each other. Realcoin does not have this advantage.
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@Swords, I couldn't agree with you more about UX. And with this in mind our revamped site will feature a UX overhaul with the goal of having a straightforward and rigid user experience, life Facebook, that hopefully the less tech-saavy users will feel comfortable using.
I hope you do not drive away your existing tech-saavy users, like those of us who signed up back in the fall of 2011, with a dumbed down, simplified and rigid user experience a la Facebook. There are those of use who find dumbed down, simplified and rigid interfaces extremely irritating and annoying and have zero use for Facebook. Lol seems as though it's impossible to please everyone. All I want is a slick single page websockets enabled experience. One can please both kind of users. Just give the user the choice of the kind of interface they prefer. |
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@Swords, I couldn't agree with you more about UX. And with this in mind our revamped site will feature a UX overhaul with the goal of having a straightforward and rigid user experience, life Facebook, that hopefully the less tech-saavy users will feel comfortable using.
I hope you do not drive away your existing tech-saavy users, like those of us who signed up back in the fall of 2011, with a dumbed down, simplified and rigid user experience a la Facebook. There are those of use who find dumbed down, simplified and rigid interfaces extremely irritating and annoying and have zero use for Facebook. |
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Sorry for being the idiot here, but I don't get it. You aren't referring to the "RealCoin" altcoin are you? Is this some pun I'm not getting? I understand that the foundation has not been transparent and a lot of well-respected members of dropped, but I don't get this thread. :/
The Bitcoin Foundation board member Brock Pierce is rolling out RealCoin... an Alt coin. What can be worse for The Bitcoin Foundation to question its credibility ? Its' own board members dont have trust in Bitcoin !!! Brock Pierce in a conflict of interest. |
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I can already see in the future people complaining about "paper" bitcoins artificially depressing the price of "physical" bitcoins  Yes, but these are not paper bitcoins. The shares are fully backed. If on the other hand someone should offer contracts to buy bitcoins in the future, not holding any bitcoins at the sale of that contract, it constitutes naked short selling, which will effectively increase the supply of coins. It is not what is going on. Yes of course at the beginning everything is always fully backed. And then the derivatives show up and pile on top of each other. And you end up with a leverage of 100. You're referring I think to a fractional reserve banking system, where the bank's holdings equal only 1% (assuming a leverage of 100) of what is lent out. I think that a deflationary currency like bitcoin would be less likely than an inflationary currency like the USD to support fractional reserve lending. My rationale is that people will be less willing to borrow (with interest) a deflationary currency than an inflationary one. Just think about it from the borrower perspective. I could be wrong -- I've never actually pondered this issue in depth before. People will always need to borrow money in one form or another. So in a bitcoin world, how would that work? Would a loan be denominated in something other than bitcoin, something that loses value over time? What would that be? Hmmm. I suspect the fractional reserve banking will not work very well with bitcoin. This is not because bitcoin is deflationary since fractional reserve banking worked well with gold, but rather because it is extremely easy and cheap to take delivery of bitcoin, when compared to gold and even fiat currencies. Fractional reserve banking ultimately involves short selling and there in no more effective way to push a short to the wall than to take delivery. By the way fractional reserve banking has been tried with bitcoin. Pirateat40 was the first significant case and he managed to suppress the price of bitcoin in 2012 before he came to grief. There is also a very good case the MTGox was running a bitcoin fractional reserve before it also came to grief. My take is that Bitcoin will end up complementing rather than replacing fiat currencies for this reason, with bitcoin being an equity based currency complementing the debt based fiat. |
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Roger Ver Set to Donate 165K+on Twitter For Ross Ulbricht’s Defense. (USD not BTC) https://bitcointalk.org/index.php?topic=680466.0. This will ensure years of litigation while the bitcoins will 1) Remain tied up in the courts and 2) Keep appreciating in value. By the time this litigation is over the 144k BTC could even be worth more than the official US government gold reserves! |
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(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(d) under the Securities Act of 1933. Each Share comprising the initial Baskets of Shares represents 0.20 bitcoins and is offered at a per Share price equal to the price equal to the number of bitcoins comprising such Share. The price of bitcoins is based on a weighted average of the average of the high and low transaction prices of bitcoins on June 27, 2013 on three major Bitcoin Exchange sites: Mt. Gox, BitStamp and BTC-e. On June 27, 2013, this price was $100.45/bitcoin. Bold my emphasis. https://www.sec.gov/Archives/edgar/data/1579346/000119312514190365/d721187ds1a.htmI would suggest the maker of this video first read the fine print before embarrassing himself on YouTube. The 20.09 USD price has nothing to do with the price the units of this trust will be offered to the public. |
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There system allows a person to use any bank account login credentials and as long as you have a login name for lets say bank of America you can use that login to add or link any bank account you want from that same bank so if i have an account number from lets say subject A to bank of America and i have a bank of America account or happen to know someone's login i can use subject A's routing and account number and verify it with Subject B's login credentials. You have to be kidding. Any response from Coinbase on this? |
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