Portugal on the Brink

[BitChick]

I never understood how the last bitcoin bubble was caused by the Cyprus crisis. Is it known fact or just an assumption? With the blocking of withdrawals in the banks in Cyprus how were they able to put money into bitcoin exchanges in the first place? Or were Cypriots more tech savvy than other countries and saving their wealth in bitcoins just an easy step?

I'm of the same way of thinking.

I can't see that Cypriots rushed to Bitcoin as their solution. Someone already feeling cornered isn't going to take on additional risk with a cryptocurrency that they've never heard of or likely don't understand.

Even if they were to come across this 'solution' I can't see them keeping money in it due to the massive fluctuations in value. They would sell their Bitcoins as soon as possible either in a different currency or in a country where they could open another bank account and deposit their Euro. Not sure how easy it is to open an account in the rest of the Eurozone but in the UK it requires a great proof of address and photo ID.

There was a chart that showed the increased activity for BTC in Cyprus after the crisis that does prove some activity.  I am not sure where that link is.  So there was some increase for sure.  I am sure that is overblown.  Isn't everything overblown here on the forums though?

[Inedible]

There was a chart that showed the increased activity for BTC in Cyprus after the crisis that does prove some activity.  I am not sure where that link is.  So there was some increase for sure.  I am sure that is overblown.  Isn't everything overblown here on the forums though?

95% of that was probably speculators buying on the news that Cypriots might use Bitcoin 

[johnyj]

To be honest, I don't really understand the whole EURO thing

Because money is printed out of nothing, how could Portugal give up this right to ECB?

For a normal citizen, he might not have any choice but obey the government rules, but for a government of the country, how could they give up this biggest right of the country to someone else?

I think none of the government officials understand how money creation works

I'm a big proponent of EURO, it's the first attempt of a Level 1 civilization currency, well, now we have bitcoin.

But people need to start thinking beyond the borders of their own countries if we are going to thrive as a species, patriotism means nothing, it's just imaginary borders. More and more we need to have a global plan for free flow of people and goods, and to achieve great things that no one nation can achieve alone.

I'm also with you on the global currency idea, but it should be some kind of honest money, not something you borrow from ECB, which they printed out of nothing

It's like ECB saying: Join me, borrow money with low interest from me (because they are created by me out of nothing), and if you can't return it, you must cut your government spending so that I can lend you more

[Nemo1024]

How is this different from the 52 states (plus the rest of the world) borrowing dollars from the Federal Reserve, dollars, which too get printed out of thin air?

[pedrog]

How is this different from the 52 states (plus the rest of the world) borrowing dollars from the Federal Reserve, dollars, which too get printed out of thin air?

That's why we call it fiat.

[johnyj]

How is this different from the 52 states (plus the rest of the world) borrowing dollars from the Federal Reserve, dollars, which too get printed out of thin air?

It's same everywhere, but before 1971 fiat money were backed by gold, so they were not printed out of nothing

It's like a magic: you built the second floor of a house and removed the first floor, and the second floor just floated in air. But for how long will it float there?

Central banks successfully controlled the society through a fact: People want to earn money.  Since the money has universal equivalence property, it is the hub of all product/service exchange. If there are many other ways to exchange product/service, then central banks won't gain much control and their money printing won't work. And Central banks try their best to make the value of fiat money appears to be stable for 99% of people

Back to the topic, Portugal was using escudo which is also freely printed by their central bank, how come they were willing to give up this right to ECB? I guess maybe their central bank get some hidden benefits joining the ECB

[pedrog]

How is this different from the 52 states (plus the rest of the world) borrowing dollars from the Federal Reserve, dollars, which too get printed out of thin air?

It's same everywhere, but before 1971 fiat money were backed by gold, so they were not printed out of nothing

It's like a magic, you built the second floor of a house and removed the first floor, and the second floor just floated in air. But for how long will it float there?

Why is that better? Would that helped folks in Cyprus or Greece?

[johnyj]

How is this different from the 52 states (plus the rest of the world) borrowing dollars from the Federal Reserve, dollars, which too get printed out of thin air?

It's same everywhere, but before 1971 fiat money were backed by gold, so they were not printed out of nothing

It's like a magic, you built the second floor of a house and removed the first floor, and the second floor just floated in air. But for how long will it float there?

Why is that better? Would that helped folks in Cyprus or Greece?

Of course it will help, it is the money backed by debt created today's problem. When money is backed by gold, every piece of money is already paid, you are free to do anything with it. But when money is backed by debt, you must spend all those money in order to pay back the debt, and even if you spend all of them, you still can not pay back your debt, since there is interest

[pedrog]

How is this different from the 52 states (plus the rest of the world) borrowing dollars from the Federal Reserve, dollars, which too get printed out of thin air?

It's same everywhere, but before 1971 fiat money were backed by gold, so they were not printed out of nothing

It's like a magic, you built the second floor of a house and removed the first floor, and the second floor just floated in air. But for how long will it float there?

Why is that better? Would that helped folks in Cyprus or Greece?

Of course it will help, it is the money backed by debt created today's problem. When money is backed by gold, every piece of money is already paid, you are free to do anything with it. But when money is backed by debt, you must spend all those money in order to pay back the debt, and even if you spend all of them, you still can not pay back your debt, since there is interest

So, no loans with interest, no more corruption, no more tax evasion, no more incompetent politicians?

[johnyj]

So, no loans with interest, no more corruption, no more tax evasion, no more incompetent politicians?

To simplify it:

Gold coin: you first work (dig out the gold), and then you spend the gold coin. Because your work is already done, so the gold coin is debt free -- it contains all the cost to produce it

Debt based fiat money: You first take out a loan, then you spend the money, and then you work to payback the loan

Notice the sequence here: If you first work to create money, and then spend the money, the money contains value already, no one use this money will be debt laiden

But if the money is a loan, then you need to work to payback that loan + interest, but your future income is not guaranteed due to continuously increased productivity, more and more automation/robot and less and less job opportunity, so you might run into a default

From risk point of view, the first case is 100% risk free and the second case is gambling on the future income, which is a variable no one can be sure in advance

There are more serious problem in the second case, because if all the money is created this way, due to interest, your future income must increase exponentially in order to payback those loans, means all the production and consumption must also increase exponentially, which is not possible in the long run

[ErisDiscordia]

Leaving for vacation and travel in Portugal tomorrow. I shall make it my mission to teach everyone about Bitcoin!

[pedrog]

Leaving for vacation and travel in Portugal tomorrow. I shall make it my mission to teach everyone about Bitcoin!

Well, here everybody has one or two smartphones and there's lots of free wifi, hehe, at least there's that.

[Kaiji]

I never understood how the last bitcoin bubble was caused by the Cyprus crisis. Is it known fact or just an assumption? With the blocking of withdrawals in the banks in Cyprus how were they able to put money into bitcoin exchanges in the first place? Or were Cypriots more tech savvy than other countries and saving their wealth in bitcoins just an easy step?

The cyprus-news-induced portion of the bubble did not come from Cypriots (for the most part.) There were indeed some cypriot holders of bitcoins, and some Cypriots started investing in bitcoins. One exchange even had a special discount rate for Cypriots. But there was no "bitcoin boom" in Cyprus like we may have hoped. The vast majority of the funds responsible for the "cyprus-news-induced" portion of the bubble came from others in Europe (either scared that the same would happen to them, or speculating that others would buy on this fear) and elsewhere in the world.

Keep in mind that even with a $266 to, say, $80 pop, after buying at $266, you still have a better (albeit negative) ROI than a Cypriot business with $800,000 operating capital that had $700,000 taken off for the bail-in. So people criticizing BTC for its volatility may not quite realize the true risk of a bail-in. In the end, holding cash is superior to both in the short-term; that's undeniable. But holding BTC means that in many cases, you can pay some invoices and bills online instantly, so it's more acceptable for operating cpaital. There are pros and cons. Most people simply aren't interested in the volatility. But soon, they will learn

Just remember all the people saying "Oh, that would never happen here..." Those are the people you get to laugh at when their livelihoods are ruined and their families are living on the street, and their 16 year old daughters are selling their bodies for 5 euros on an Athens street corner.

So basically what happens in one EU country can happen in another. They probably saw Cyprus as a test case for taxing people's savings and now they see that they can get away with it other countries will face the same thing. That fear might have caused Europeans to save their wealth in bitcoins.

[DPoS]

To be honest, I don't really understand the whole EURO thing

Because money is printed out of nothing, how could Portugal give up this right to ECB?

For a normal citizen, he might not have any choice but obey the government rules, but for a government of the country, how could they give up this biggest right of the country to someone else?

I think none of the government officials understand how money creation works

I'm a big proponent of EURO, it's the first attempt of a Level 1 civilization currency, well, now we have bitcoin.

But people need to start thinking beyond the borders of their own countries if we are going to thrive as a species, patriotism means nothing, it's just imaginary borders. More and more we need to have a global plan for free flow of people and goods, and to achieve great things that no one nation can achieve alone.

Die globalist pig!!    I guess eskimos should have the same healthcare as football players and wheelchair access out of their igloos

Travel outside of your crappy apartment and you might see people live a lot different with different values around the world

[DoomDumas]

To be honest, I don't really understand the whole EURO thing

Because money is printed out of nothing, how could Portugal give up this right to ECB?

For a normal citizen, he might not have any choice but obey the government rules, but for a government of the country, how could they give up this biggest right of the country to someone else?

I think none of the government officials understand how money creation works

I agree, imo, it's true in every country.. no one in govt understand how money is created.. or if they understand they fear to face it..  the last elected US govt to call that he will disolve the FED and take back the power to create money is Kennedy !

Govt folks are a) unaware, b) dont have the gots to fight, c) are friend of those owning the printing press
Citizens are a) unaware, b) unaware of the existence of BTC, c) dont care at all as long as they are able to feed/house themselve.. when they become unable to, it's too late !

We must make everything we can to bring awareness of BTC to every citizen...

I speak of BTC everytime I hand fiat currencies to someone, eveytime I start a LoL game, everytime I see a friend, familly member..

Each time Im at a point of sale to pay, I ask if they accept BTC.. even to those I asked before..

It's not for no reason that I'm so obessed by BTC.. It's money from the peoples, for the peoples.. It's money 4.0 that bring liberty !   Awesome !

[m3ta]

Is Bitcoin popular, or easily accessible in Portugal???

Your ignorant question means that either you're an American (who typically can't pinpoint any European country on a map), or elementary school was too hard for you.

[Raoul Duke]

I'm also with you on the global currency idea, but it should be some kind of honest money, not something you borrow from ECB, which they printed out of nothing

It's like ECB saying: Join me, borrow money with low interest from me (because they are created by me out of nothing), and if you can't return it, you must cut your government spendingtax your people to death so that I can lend you more

FTFY.
Source: I'm a Portuguese and I'm watching it from the front row.

[bitfromit]

To be honest, I don't really understand the whole EURO thing

Because money is printed out of nothing, how could Portugal give up this right to ECB?

For a normal citizen, he might not have any choice but obey the government rules, but for a government of the country, how could they give up this biggest right of the country to someone else?

I think none of the government officials understand how money creation works

I'm a big proponent of EURO, it's the first attempt of a Level 1 civilization currency, well, now we have bitcoin.

But people need to start thinking beyond the borders of their own countries if we are going to thrive as a species, patriotism means nothing, it's just imaginary borders. More and more we need to have a global plan for free flow of people and goods, and to achieve great things that no one nation can achieve alone.

Die globalist pig!!    I guess eskimos should have the same healthcare as football players and wheelchair access out of their igloos

Travel outside of your crappy apartment and you might see people live a lot different with different values around the world

Agree. Diversity is what makes life interesting. I don't want to live in a monoculture and actively avoid supporting anything that pushes that way.

[CurbsideProphet]

How is this different from the 52 states (plus the rest of the world) borrowing dollars from the Federal Reserve, dollars, which too get printed out of thin air?

The difference is Portugal along with some of the other PIIGS are serial defaulters.

Portugal has defaulted on its national debt five times since 1800, Greece five times, Spain no less than seven times (and 13 times in all since 1500).

By contrast, Anglo-Saxon countries rarely, if ever, default. In this country, we haven’t reneged on our debts in nearly 1,000 years, though there have been close shaves. The same applies to Canada, Australia and the United States.

http://blogs.telegraph.co.uk/news/peteroborne/100081316/some-european-countries-are-in-the-habit-of-going-bankrupt/

[TomUnderSea]

How is this different from the 50 states (plus the rest of the world) borrowing dollars from the Federal Reserve, dollars, which too get printed out of thin air?

FTFY