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Author Topic: Here is the reason why the Chinese Communist Party is not stopping bitcoin.  (Read 7870 times)
AnonyMint
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November 20, 2013, 09:33:13 AM
 #21

Well I think the amount of currency in the world is around 100 trillion.  bit coin is a very small percentage of that, it can get to 1% very easy.  I don't think people will dump it after that.  Many people keep their savings in the bank.

I would not hold an investment that had peaked in price. Meaning peaked in terms of people who would buy into it.

No matter that % of the population that will be, eventually it will be reached.

At that point investors have the incentive to leave and find something that will go up in price.

That is simply unarguable. Who is dumb enough to keep their $100,000 in an investment that returns 0%? You have a risk of decline, and so you need to be rewarded with a rising price to offset the risk of decline.

If investors stopped seeking profit, the world would stop being funded for new investments.

If an investor could fund a new business with Bitcoin, then pay his employees in Bitcoin, then that would be exception my logic. However, the problem is that not enough people have bitcoin, thus not enough of the economy accept bitcoin, thus you can't pay your employees in bitcoin in most cases.

And it is impossible to get most people to own bitcoin, because the price will go over $1 million each before 1% of the 7 billion had purchase Bitcoin. The 99% portion of the population would be devalued by 1/1000000. They simply won't agree to be devalued that much relative to you, thus they would not buy.

Sorry bitcoin lacks distribution because of the 21 million coin limit. It is too harsh. This is fundamentally what makes Bitcoin a ponzi scheme.

Once the investors sense the peak, they will exit. Due to the tiny float, this will quickly turn into a stampede. Then all the way down to near 0 because most capital in Bitcoin is there for the gains, not for use as currency. Only a very tiny portion would remain to use as currency, perhaps back down to $10 or something like that from $1 million.

Problem is that even people wanted to buy it at $10, there are still only 21 million coins and in very few hands, and thus still the same distribution problem.

Distribution is the only thing that can make a currency.

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zeetubes
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November 20, 2013, 10:11:39 AM
 #22

It is quite possible the chinese government likes bitcoin because they need a paypal-like infrastructure and paypal doesn't want to give them their code or control. With bitcoin the infrastructure is already tried and tested, and because it is open source, there are no real intellectual property issues.

Not sure I understand the previous comment about there only being 21 million coins. If bitcoin does stay in play, then owning one or more of those 21M coins in a world population of 7-8B people will be a pretty nice investment. Everyone else will just have to play with tiny fractions.
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November 20, 2013, 10:50:31 AM
 #23

Yeah you really don't understand. At least you admit you don't. Your logic is highly flawed.

The error in your logic is you assume the Bitcoins can somehow be unconcentrated from million owners to 7000 times more owners (1 million x 7000 = 7 billion). But how? Or at least, how soon enough given how fast the price is rising?

I walked you through the scenarios and there is no scenario. You can try rereading my prior post.

If the price was rising more slowly that would allow more time for the coin to slowly be dispersed as the rich owners spend a few of their coins every once in a while.

But even that probably wouldn't work, because the rich always increase their coins and the poor always spend their coins.

You see this is why no currency can exist that doesn't redistribute wealth back from the wealthy to the masses. Otherwise the wealthy would end up with all the coins eventually.

If you earn $1 million per month, what percent of your income do you spend on basic needs? Maybe $5000 per month, so 5%.

If you earn $3000 per month, what percent of your income do you spend on basic needs? Maybe $1500 per month, so 50%.

Which of the two can attain more coins faster?

The fix is to make a coin that can continuously distribute new coins to the masses, but not too fast so as to destroy the price gains of the investor, but just a healthy balance.

But how do you distribute such coins fairly based on capitalism?

Well you let them secure the network and receive coin rewards.

But the problem in bitcoin is that no one with a PC can mine any more. All coins go to those with large capital who can buy ASICs. You can't just download the mining client and run on your PC any more (isn't going to generate any coins).

And the other problem is the bitcoin stops minting many new coins around 2033 (< 1%) and then really slow by 2040 (< 0.2%) and eventually approaching 0 new coins. Very very bad.

You all think it is good, because you didn't think it out, to see it is really bad for you and your investment.

How will you exit at the ponzi top? There will be a stampede to get out.

Did you know that Bitcoin is creating 1312500 new coins this year, which is a 12.5% increase! Yet Bitcoin price is still rising.

https://en.bitcoin.it/wiki/Controlled_supply#Projected_Bitcoins_Short_Term

See adding more coins doesn't stop the price from going up. Only selfish people who have not thought this out think they need to limit coins at 21 million.

And you know what happens to these selfish people? They will lose everything at the ponzi peak price and them the crash. Because that is what selfish people deserve. Because they don't think. They just destroy the world.

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November 20, 2013, 10:55:00 AM
 #24

It is quite possible the chinese government likes bitcoin because they need a paypal-like infrastructure and paypal doesn't want to give them their code or control. With bitcoin the infrastructure is already tried and tested, and because it is open source, there are no real intellectual property issues.

Not sure I understand the previous comment about there only being 21 million coins. If bitcoin does stay in play, then owning one or more of those 21M coins in a world population of 7-8B people will be a pretty nice investment. Everyone else will just have to play with tiny fractions.

China's online payment systems are at least as good Paypal already.
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November 20, 2013, 11:22:20 AM
 #25

Well I think the amount of currency in the world is around 100 trillion.  bit coin is a very small percentage of that, it can get to 1% very easy.  I don't think people will dump it after that.  Many people keep their savings in the bank.

World currency M2 is estimated at $60 trillion whilst M3 is $75 trillion

http://gizmodo.com/5995301/how-much-money-is-there-on-earth

a trillion is with 12 "0"s

http://math.about.com/od/glossaryofterms/a/zeros.htm

If you need to break the $  or the bitcoin fraction of a unit into 100 cents (equivalent) you need another 2 "0"s or 14 in total

21,000,000 coins divided to 10 decimal places = 16 zeros

therefore

As things stand bitcoin has the potential to cover ALL the currency in the world 50 times.

Does that make sense or have I had too much coffee?
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November 20, 2013, 12:18:17 PM
 #26

Bitcoin will grow but it will not take over the world, it would be insane to think that.

Nor will it be the only crypto currency that people use.

It is simply the first that has gained mainstream traction.

Others will follow on a larger scale.
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November 20, 2013, 12:54:13 PM
 #27

AnonyMint is raising some good points.
Bitcoin is not a ponzi scheme stricto sensu because veterans aren't paid by a scammer with the subscription money of newcomers. Nevertheless, the question of bitcoin's long term sustainability remains.
I disagree with you AnonyMint, though ; I think (I might be wrong) that bitcoin-rich people will spend enough coins to allow bitcoin-poor people to trade work for coins. How do you "prove" that wrong ?

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November 20, 2013, 04:45:54 PM
 #28

If QQ was estimated at 13% of China's cash economy and would have grown larger, what's from stopping bitcoin?

AnonyMint does make good points, but investing in bitcoin also guards you from inflation of your own currency.  I can see a lot of 3rd world countries using or backing their currency with bitcoins.  It's like buying a house, a house isn't going to grow new rooms, or gold isn't going to grow into more gold.
gabriella
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November 21, 2013, 02:16:39 AM
 #29

i am just pointing out the fact many people have come to realize that (but ofcourse not 100% guaranteed) china's economy will soon hit a wall, and any catalytic event will cause its house of cards (with numerous oft-mentioned serious flaws) to crumble and collapse.

once that happens, the only thing the ccp has to keep its powder keg of a society from blowing up - breakneck economic growth is gone, and it may very well lead to collapse of the ccp and china.

it may sound ridiculous now, but more and more people are starting to realize this is the scenario inevitably coming.
Mondy
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November 21, 2013, 05:19:35 AM
 #30

Well I think the amount of currency in the world is around 100 trillion.  bit coin is a very small percentage of that, it can get to 1% very easy.  I don't think people will dump it after that.  Many people keep their savings in the bank.

1 trillion dollars is A LOT, especially for an online currency such as btc!

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November 21, 2013, 06:47:21 AM
 #31

Well I think the amount of currency in the world is around 100 trillion.  bit coin is a very small percentage of that, it can get to 1% very easy.  I don't think people will dump it after that.  Many people keep their savings in the bank.

1 trillion dollars is A LOT, especially for an online currency such as btc!

Not really in my opinion the market is there it just needs to be built upon
Mobile banking could help a lot of users in the Global South and even here in the Global North

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