Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[Peter R]

My opinion isn't popular here, but fiat currencies are backed by national governments.

How so?  They always take them to zero.  I'm not sure I'd call that "backing".

They are legal tender, so businesses are required by law to accept it. That has as much value as any shiny stone or metal. You can't eat gold or diamonds.

You are only required to accept "legal tender" for the settlement of debts.  Any business may choose to accept any legal form of payment it wishes for the purchase of goods and services.  

For example: I could open an ice-cream shop where I only accept payment in bitcoin.  If you don't have bitcoin and can't pay on my terms, there is no one who can legally force me to serve you ice cream.  

However, if I say "OK, Joe, you don't have any bitcoins?  I'll give you an ice cream today if you promise to pay me back next week."  If Joe doesn't pay me, I could sue him in small claims court, and, if I won, he would be ordered to pay me back and he would have the right to do so in dollars.  

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[aminorex]

These are media myths, and have never been promulgated as such by any knowledgable members of bitcoin community, during the history of my involvement.  They have little enough bearing on the value of Bitcoin.  Indeed the fact that taxes are imposed on fiat is often used as an argument in favor of the value of fiat.  (Hopefully we can agree that it is a specious argument.)

As I wrote before, those claims were and still are being made by some bitcoin enthusiasts.  Ditto for the claim that Governments cannot stop bitcoin.   I was arguing with one such enthusast on twitter a couple of days ago, and have seen people write that somewhere in this forum.

You are focusing on the fact that these statements are not comprehensively categorically and universally true.  I am focussing on the fact that they bear truth, if you have ears to hear it.  I find that in this way I perceive more reality.  You can use bitcoin to transact anonymously, and people do so frequently.  Anonymity is not black and white.  There are infinitely many shades of anonymity, and perhaps colors that I could see if I were not blind to that spectrum.  What is useful for one purpose is not necessarily useful for another purpose.

it is precisely where anonymity and privacy would be most necessary, that they are least likely to be possible.   In those situations, the mere attempt to use a secure channel will make you a criminal.  I wish there was a way to get around that problem, but there seems none in sight.

Say rather "more difficult" and I would agree with the prefix.   Easy anonymity is elusive, but I think that is intrinsic in the nature of entropy.  Domains in which perfect security are possible are not typically useful ones.

I suppose I do not know what libertarianism is exactly.   I have read two short bios of Ayn Rand, which included a summary of her ideas, and a lot of statements by people who declare themselves "libertarians".  Some of the latter sounded like they hated any form of government.  For example, some people on this forum were against suing MtGOX, and I understood that it was because that would be an "un-libertarian" thing.  I have seen many oppose any form of regulation of exchanges and such, apparently for that reason.  Perhaps I was mistaken?

I expect you are correct.  Extremism is it's own reward.  I tried to provide a rendering of what I understand to be the coherent kernel of libertarianism, as the term is used in ordinary language, in a reply to creekbore:

It is diverse, but the centroid is something like this:  It is wrong to do violence to others.  The state is institutionalized violence.  Minimizing that violence without creating other greater evils is desirable.  Freedom to transact, to contract, is a fundamental right, as are property rights. 

You seem to conflate libertarianism with anarcho-capitalism.  They are neighbors, but I suspect they appreciate a tall fence between their estates.

Would you agree that some of them, at least, are against any form of government, or want extremely reduced governments (e.g. with no support for education, health, trasportation, etc)?

Yes.

Would you agree that some libertarians, at least, are rooting for the collapse of governments and banks?

Yes.

Personally, I despise the injustice and evil that I perceive.  Governments and banks are great perpetrators of evil.  I despise that evil.  I don't think it is wise to generalize to the conclusion that all goverment, all fiduciary business should be opposed, and I think some people who make that mistake consider it part and parcel of their identity as libertarians.

I utterly contemn Ayn Rand, her ideology, and its impact on the lives of her ditto heads.  She suffered the natural consequences of her arrogance and veniality.  Much like Friedrich Nietzsche.  It is a sad end.

I have strong affinity for the principles of libertarianism as I have heard them expressed in defining contexts.  It is a political philosophy rooted in the moral value of freedom, and I can get behind that platform.  The deontology avoids most of the incoherencies and grotesqueries that other moral philosophies have perpetrated.

[aminorex]

]They are legal tender, so businesses are required by law to accept it. That has as much value as any shiny stone or metal.

It is valuable for those who get to print the currency.  It is harmful to those who do not.

You can't eat gold or diamonds.

I can more reliably obtain more and better food under more circumstances using gold than I can using fiat.  You can't eat fiat either.
Or if you do, you might get colon cancer from the PCB ink.

[billyjoeallen]

My opinion isn't popular here, but fiat currencies are backed by national governments. Isn't that worth more than lumps of conductive metals?

Fait currencies are backed by guns. Our currency is backed by math. Which is more reliable?

Guns are pretty convincing when you are the one staring down the barrel.

And Bitcoin isn't backed by math, it's backed by faith. Numbers have no inherent value. There is no mathematical reason for Bitcoin to be valuable besides the trust we place in it.

Every Shitcoin in the alt board is backed by math as well. It doesn't make them valuable.

The fucker holding the gun has to sleep sometime. When does math sleep?
It's public knowledge that I'm no fan of altcoins, but the existence of the alt board proves you wrong if you claim they are completely worthless.

[JorgeStolfi]

Just one question:

You must admit that nobody can foresee the future with perfect clarity.  In 2018, bitcoin could be a dominant world currency, it could be an academic curiosity of a past failed experiment, or it could be something in between.  My question is how do you expect you'd feel if bitcoin is successful beyond all of our wildest hopes?  Will you look back, shrug, and say "oh well"?  Or will you be disappointed that some mental obstinance prevented you from hedging with 2 BTC just in case?

As I wrote in that long post, I wish the success of the bitcoin project (providing an internet payment method that is safe etc.)  So obviously I will be very happy if it succeeds.

But I presume that by "successful" you mean "1 bitcoin (not 1 dogecoin) will be worth a billion dollars".  In that case I will probably feel a bit bad for not having bought one BTC today. Just as I feel a bit bad that I did not buy Apple or Google stock when it was cheap.  Or Enron or Worldcom or OGX at the IPO, and then sold at the peak.

However, if I ever become convinced that bitcoin will succeed in that sense, I can always get a loan and buy one when the price gets to a million dollars.  I don't think I will feel too bad for having made only a $999,000,000 profit, instead of a $999,999,000 profit. 

[Adrian-x]

Bitcoin is backed by maths and its functionality.

Just the value is backed by the faith others will trust the immutable Bitcoin Protocol. (Maths)

[aminorex]

Every Shitcoin in the alt board is backed by math as well. It doesn't make them valuable.

And the repetition of that concept doesn't make it any less misleading and fallacious.  There's a fish in your knee, sir.

[Richy_T]

Bitcoin is backed by maths and its functionality.

Bitcoin is no more backed by maths than any other currency. It is backed by its utility though and assured against counterfeiting by the protocol.

[ChartBuddy]

Explanation

[billyjoeallen]

However, if I say "OK, Joe, you don't have any bitcoins?  I'll give you an ice cream today if you promise to pay me back next week."  If Joe doesn't pay me, I could sue him in small claims court, and, if I won, he would be ordered to pay me back and he would have the right to do so in dollars.  

Opportunity costs are real and can form the basis for contract enforcement. Break a promise and your credibility ranking goes down. No guns necessary. Quit looking to mommy Government to bail you out every time you place trust is some untrustworthy person.

[KeyserSoze]

Ditto for the claim that Governments cannot stop bitcoin.

It must be a semantics issue which you're hung up on with regard to this issue. Governments cannot stop Bitcoin. They can ban it or otherwise criminalize it but that won't stop it from being used. I guess the only way we'd know is to give it a whirl.

[hmmmstrange]

I suppose I do not know what libertarianism is exactly.   I have read two short bios of Ayn Rand, which included a summary of her ideas, and a lot of statements by people who declare themselves "libertarians".  Some of the latter sounded like they hated any form of government.  For example, some people on this forum were against suing MtGOX, and I understood that it was because that would be an "un-libertarian" thing.  I have seen many oppose any form of regulation of exchanges and such, apparently for that reason.  Perhaps I was mistaken?

From what those people say, I got the impression that libertarians are rather varied in their views.  Would you agree that some of them, at least, are against any form of government, or want extremely reduced governments (e.g. with no support for education, health, trasportation, etc)?

Would you agree that some libertarians, at least, are rooting for the collapse of governments and banks?

I'm a libertarian and I'm rooting for everyone to succeed. If someone wants to be "ruled" that should be up to them, not forced.

As for education, health, transportation, all can be done in the private sector, in a much more efficient manor.

Just imagine what you could do for society with the 50% of your income your government takes from you with the threat of imprisonment or death.

[Arcas]

Ditto for the claim that Governments cannot stop bitcoin.

It must be a semantics issue which you're hung up on with regard to this issue. Governments cannot stop Bitcoin. They can ban it or otherwise criminalize it but that won't stop it from being used. I guess the only way we'd know is to give it a whirl.

Can't they force ISPs to block the protocol?

[aminorex]

Can't they force ISPs to block the protocol?

The Internet perceives censorship as damage and routes around it.

[Richy_T]

Ditto for the claim that Governments cannot stop bitcoin.

It must be a semantics issue which you're hung up on with regard to this issue. Governments cannot stop Bitcoin. They can ban it or otherwise criminalize it but that won't stop it from being used. I guess the only way we'd know is to give it a whirl.

Can't they force ISPs to block the protocol?

Not in any way that couldn't be gotten around in 3 nanoseconds. Protocol changes, encryption, side-channel communications, steganography, VPNs...

[KeyserSoze]

Ditto for the claim that Governments cannot stop bitcoin.

It must be a semantics issue which you're hung up on with regard to this issue. Governments cannot stop Bitcoin. They can ban it or otherwise criminalize it but that won't stop it from being used. I guess the only way we'd know is to give it a whirl.

Can't they force ISPs to block the protocol?

I read this argument somewhere else and while I don't understand it, apparently it could simply adapt to a certain port or some such.

[JorgeStolfi]

Traditional market trends don't mostly apply with cryptocurrencies.

I understand that technical analysis of price charts does not help much with traditional markets either (although it is widely used, perhaps for the lack of any better tool).

However, I have tried to explain  here why I think that the "Chinese Slumber Method" works with Huobi (and only there, although Bitstamp tracks it very closely most of the time.) 

Basically, Huobi appears to be a relatively simple market, and my theory is that while the price swings randomly during the day, the traders apparently thend to reset their favorite BTC:CNY position at the end of the day; with the effect that the price returns to a value that is determined by some slowly-varying "external" variables -- such as the total amont of money and bitcoins available for trading, and the general feeling of traders about bitcoin.  So the analysis is trying to pick the trend in those variables, not of the market price per se.

[JorgeStolfi]

Ditto for the claim that Governments cannot stop bitcoin.

It must be a semantics issue which you're hung up on with regard to this issue. Governments cannot stop Bitcoin. They can ban it or otherwise criminalize it but that won't stop it from being used. I guess the only way we'd know is to give it a whirl.

My definition of "success" is "it is used by many people for ordinary payments because it is cheaper/faster/safer than using a bank or credit card". That will not happen if it illegal to use it. 

Since december, even a foreign tourist cannot pay for a hotel bill or meal in China with bitcoin.  So the bitcoin project is already dead in China.

The Chinese government still allows trading inside the exchanges only because they feel that it is harmless. If they saw a threat there, they could easily close the exchanges, and block access to the network if necessary.   

Again, I do not see how the blockchain could be maintained if the US government decided to ban bitcoin.

[aminorex]

I think its rather ironic that you are so passionate about a disruptive technology but you seek to belittle a disruptive thinker.

Hey, I find Jorge stimulating.  I think he is well educated, fairly intelligent, and well socialized.  "A man of wealth and taste" in the words of Keith Richards.

It's his pernicious ideas and his misleading tactics that I want to nuke from orbit.  They cut much closer to the bone than do more ham-handed idiocies.

The second I'm not sure about institutionalised violence -- but yes, I'd like to see an end to military spending...

Pretty much everything the government does it does by violence or by threat of violence.  Well, in the modern social contract, it also offers carrots as well as sticks.  I consider those mostly a form of moral violence, but that's taking the words into a whole 'nother universe, so it's not a useful path.

Property rights are interesting because I see that as being extremely capitalistic and transact and contract seem very business orientated.  Sounds like everyone in the BNW will have an MBA.  I'm also wondering how you resolve your property rights with the traditional owners of your land?

Fun stuff.  But please, I'm describing the ideas in their relationship to the label "libertarian".  I have affinities to some of the ideas, not others.  I would self-identify as libertarian only inconsistently, if it were useful to move the ball forward.  Let us prefer "one" over "you".

Property rights have always seemed to me factitious, cultural.  I'm ambivalent about them personally.  Until you try to use my toothbrush, that is.  The best argument for property rights is the evil done when people violate them.

I am very pragmatic.  The internet was going to make our lives so much better -- it's had huge impacts but they've been balanced between good and bad -- but technology does not make the world a better place, people do.

Technology is the tool they use to do it.  And the Internet has indubitably made my life much, much better.  Never-ending stimulation.  Illimitable knowledge resources.  Instant world-wide access to sensors.  One day, instant world-wide access to effectors.  In fact, that's what bitcoin is.  Just as the web gives you remote eyes, bitcoin gives you remote hands.  (I like that idea, so I made it bold.  Money is power to change the world.)

Is it any wonder when you are skidding around like this -- banks are about to collapse, next they're not.

Being useful and entrenched doesn't make them immune to collapse.  When things get tightly coupled they get brittle.  When they get addicted to energy, they die without it.

So, what you are describing is evolution rather than revolution. Which is contrary to your earlier argument about chaos etc.

Chaos is to be defended against, but it is also a necessary process.  I argue that the anti-fragile properties of Bitcoin is useful for the defense, in particular with regard to economic reorganization.  I will also argue that a degree of chaos is inevitable, even desirable, and some painful chaos is likely to arise soon as we enter regions of the phase space of the economy which are prone to catastrophic transformation.  Those catastrophic changes will be revolutionary.  It is super-duper hard to predict what changes will be evolutionary and what changes will be revolutionary.  It's also hard to predict the outcomes, especially of revolutions.  But there's enough icky stuff around right now, so that I have hope the change will be an improvement, overall.  It will be, if enough people of good will take vigorous action.

[Richy_T]

Since december, even a foreign tourist cannot pay for a hotel bill or meal in China with bitcoin.  So the bitcoin project is already dead in China.

Not dead. Merely in Chinese slumber.