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Question: Will you support Gavin's new block size limit hard fork of 8MB by January 1, 2016 then doubling every 2 years?
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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1953266 times)
Erdogan
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August 11, 2014, 08:46:41 AM
 #10421

Quote from: Peter R
Although a market-based solution like this may not completely accomplish its goals of owning 100% of the bitcoins, an initiative where central banks bought up a significant amount of coins might still produce positive effects
If the CB's were to buy up, would this not make the circulating (not in their hands) btc more valuable?

Hence some of the positive effects Cheesy

Joking aside, the scenario where central banks hold bitcoin reserves is plausible.  It will be generations before the last of the Keynesians goes extinct; in the meantime, the temptation to manipulate the money supply will be too great.  If bitcoin use continues to grow, the only way manipulation will be possible is to hold a large fraction of the coin supply.  And I'm OK with this sort of monetary policy.  At least discipline will be enforced by the network, and not by some old-boy's club lender of last resort.  

It amazes me that the Fed wasn't all over the SR coins with proxy buyers outbidding Tim Draper (or not outbidding, but Tim being told that they did). There must some people working there with a brain. The Fed should have analysts who can see that, even though crypto is unproven long-term, they can do huge risk mitigation by acquiring a holding which represents a few percent of the 21M possible Bitcoin. This goes for other CBs.


Yes, it's not like it costs them anything to do so.  If they want to procure 500,000 BTC, they can create the money for the purchase out of thin air, add these dollars to the liability side of their balance sheet and add the 500,000 BTC to the asset side.  That's how the Fed works.  In fact, after TARP, they probably don't even need an act of Congress to start buying.

I keep saying that central banks get one final kick at the can: they can "sell out" by purchasing bitcoins with newly-created fiat until all confidence in fiat is lost.  Central banks would still have a big pile of coins to continue with monetary policy.  

You forget that current policy is based on continually expanding, continually expanding the expansion (exponentially increase) of the money supply (including debt). With bitcoin, the only thing that is theoretically possible, is for the central bank to smooth out the volatility, in reality they can not do that either (because they can not look into the heads of the economic actors (everybody) (yet).

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August 11, 2014, 01:31:02 PM
 #10422

Ragrding the earlier discussion in this topic regarding block limit has everyone read http://www.reddit.com/r/Bitcoin/comments/2d7ofh/technical_discussion_of_gavins_o1_block/ interesting summary.
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August 11, 2014, 05:17:41 PM
 #10423

I keep saying that central banks get one final kick at the can: they can "sell out" by purchasing bitcoins with newly-created fiat until all confidence in fiat is lost.  Central banks would still have a big pile of coins to continue with monetary policy.  

I wonder how many coins they could get if they started doing this today. 

I'm guessing a good chunk - 1/3 of all in existence at least.  A lot of people would sell their coins before it was clear who was buying them.  And then it would take a bit to realize the CB's intention.  It would take some very high prices before everyone knew what was happening.  Over $100k, I'd guess.  We could hit $10k and nobody would even suspect it was any different than previous bubbles.
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August 11, 2014, 05:19:46 PM
 #10424

Is it just me or were premiums almost double a year or two ago?

1 oz Gold Bar - Credit Suisse (In Assay)
Any quantity only $21.99 per bar over spot!
- See more at: http://www.apmex.com/product/11950/?&RILT=Link_1oz-CreditSuisse-GoldBar&utm_source=Responsys&utm_medium=email&utm_campaign=Non-Purchaser%20Conversion#sthash.mR23LWlQ.dpuf
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August 11, 2014, 05:39:56 PM
 #10425

I keep saying that central banks get one final kick at the can: they can "sell out" by purchasing bitcoins with newly-created fiat until all confidence in fiat is lost.  Central banks would still have a big pile of coins to continue with monetary policy.  

I wonder how many coins they could get if they started doing this today. 

I'm guessing a good chunk - 1/3 of all in existence at least.  A lot of people would sell their coins before it was clear who was buying them.  And then it would take a bit to realize the CB's intention.  It would take some very high prices before everyone knew what was happening.  Over $100k, I'd guess.  We could hit $10k and nobody would even suspect it was any different than previous bubbles.

the risk for them doing this would be enormous.

reputational risk would include a market perception of fear of Bitcoin and lack of confidence in USD.  it would be a clear signal that they believe their future is doomed.  just "being in the game" would not facilitate monetary policy manipulation which is the raison d'etre for their existence in the first place.

if ppl found out they were doing this, everyone and their mother would pile in driving the price even higher to stratospheric levels.  i suppose they could find a proxy buyer to accumulate coins but if they accidentally pick a Snowden-type, they'd be screwed.

CB's aren't smart investors as far as i'm concerned.  look at Gordon Brown's faux pas.  during the noughts, CB's in general were selling gold for the most part.  the recent buying by Russia and China, i believe, will go down in history as yet another mistake.

no, i think the CB's, especially the Fed, are "all-in" with fiat.  that's not good; for them.
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August 11, 2014, 05:46:04 PM
 #10426

Litecoin in a death spiral:

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August 11, 2014, 05:47:23 PM
 #10427

like i said, this sideways action for Bitcoin should serve to clean out a majority of alts; if i had my way, it'd clean out all of them.
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August 11, 2014, 05:48:26 PM
 #10428

Is it just me or were premiums almost double a year or two ago?

1 oz Gold Bar - Credit Suisse (In Assay)
Any quantity only $21.99 per bar over spot!
- See more at: http://www.apmex.com/product/11950/?&RILT=Link_1oz-CreditSuisse-GoldBar&utm_source=Responsys&utm_medium=email&utm_campaign=Non-Purchaser%20Conversion#sthash.mR23LWlQ.dpuf

if true-->shit's on sale
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August 11, 2014, 05:49:58 PM
 #10429

Litecoin in a death spiral:



Not picking it up before USD 2.

Like this post? you can tip me (BTC) 18j7UBNfhWWfvwGwrtzWfUrp1v6RDerFkY or (XEM) NBXGH5-MXQPNL-T5TA3R-QCQYUX-3FIEXC-LGIKGT-H7XJ
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August 11, 2014, 05:52:05 PM
 #10430

Litecoin in a death spiral:



Not picking it up before USD 2.

https://twitter.com/cypherdoc2/status/498889266903384064
SkRRJyTC
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August 11, 2014, 05:55:12 PM
 #10431

Is it just me or were premiums almost double a year or two ago?

1 oz Gold Bar - Credit Suisse (In Assay)
Any quantity only $21.99 per bar over spot!
- See more at: http://www.apmex.com/product/11950/?&RILT=Link_1oz-CreditSuisse-GoldBar&utm_source=Responsys&utm_medium=email&utm_campaign=Non-Purchaser%20Conversion#sthash.mR23LWlQ.dpuf

if true-->shit's on sale

I remember $45 - $55 per oz.
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August 11, 2014, 06:05:06 PM
 #10432

i think the most important financial dynamic going on in the world today is Bitcoin vs Gold.  yes, there’s a component of Bitcoin vs Fiat but gold has always been the real money of centuries past.  the pure fiat game has only been around since 1971.  that is why i was a goldbug from 2005 to 2011 and why i started the gold threads:  Gold: I Smell a Trap and this one.  while the Keynesian’s and major CB’s would never admit that gold still plays any importance on the world stage, actions speak louder than words.  otherwise, why would India, China, and Russia continue to stock gold?  why would the Fed continue to spend millions on fortified storage facilities to stockpile what little they have left? we know that at some level, they covet it. unfortunately for CB’s, they’ve never been very good at calling markets ala Gordon Brown in 2000 selling off the UK’s gold followed by the others for much of the noughts.   enter gold’s Black Swan, Bitcoin.

i’m also surprised at how short memories are.  we’ve already kicked out 4.5/5 legs of the precious metal story:

1.  Silver:  remember how all the silver bugs like Eric Sprott and Max Keiser promised us that silver would lead the gold to massive new highs?  while gold was supposed to go to $35000, silver would head to $200 or something like that?  simply enough, Bitcoin did a Slingshot Effect-cypherdoc past silver easily in the Spring of 2013.  effortlessly, like a knife thru butter.  and yet goldbugs fail to understand/remember its significance.  what bigger a red flag to wave that Bitcoin is superior to metals?  Bitcoin has already been Silver’s Black Swan. no one in their right mind thinks silver will ever catch Bitcoin at this point.  this is an important clue to the big picture.  this is also why i don’t like Litecoin; we don’t need or want a Bitcoin’s silver.  Litecoin is doing a death spiral right now. imo, the only reason silver became a form of money in the first place was b/c of the high amount of friction in pm’s.  gold has a limited form of divisibility despite what you’ve been told.
2.  Miners:  oh Lordy.  this sector has been wiped out on it’s own merit, however, when compared to the performance of Bitcoin, it’s been a complete disaster.  i also think Bitcoin played a big part in that; look at the for sale of the recent gold mine for Bitcoin.  remember how miscreanity used to argue vociferously that miners were the ultimate leverage play on gold/silver itself?  how’s that turned out?  disastrously.  pay close attention to that excellent analysis as to the environmental and USD costs of pm mining.  that is unsustainable and undesirable.  http://www.coindesk.com/microscope-true-costs-gold-production/
3.  Gold itself:  did you all forget that Satoshi dared to touch the face of gold in price last November?  what did that tell us?  answer: a hell of a lot. i dare say that the next time Satoshi touches gold it will be with his fist thru the face of gold’s price.  we should get another Slingshot Effect-cypherdoc as the world realizes what the implications of Bitcoin will be.  that event should re-establish the logarithmic Bitcoin ramp we’ve seen in years past.  the seed of doubt in the minds of goldbugs has been planted and it will continue to blossom.
4.5.  we’re seeing one after another of former staunch gold bugs convert:  Turk, Schiff, Rogers, and possibly Casey and Rickards.  the momentum is clear.  they will be running to Bitcoin soon.
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August 11, 2014, 06:24:17 PM
 #10433

Litecoin in a death spiral:



Not picking it up before USD 2.

It probably won't go that low. LTC spiraled last year until $1.50 while BTC was flat, then it followed its big brother upwards in November. The historical price connection between the two biggest coins in crypto is hard to deny--a rally in BTC usually means a rally in LTC.
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August 11, 2014, 06:29:02 PM
 #10434

Not picking it up before USD 2.

It probably won't go that low. LTC spiraled last year until $1.50 while BTC was flat, then it followed its big brother upwards in November. The historical price connection between the two biggest coins in crypto is hard to deny--a rally in BTC usually means a rally in LTC.

Yup +1

I have my buy orders set at 0.009 LTC/BTC and I plan to at least triple my BTC invested from that point




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cypherdoc
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August 11, 2014, 06:35:32 PM
 #10435

Not picking it up before USD 2.

It probably won't go that low. LTC spiraled last year until $1.50 while BTC was flat, then it followed its big brother upwards in November. The historical price connection between the two biggest coins in crypto is hard to deny--a rally in BTC usually means a rally in LTC.

Yup +1

I have my buy orders set at 0.009 LTC/BTC and I plan to at least triple my BTC invested from that point

even if it does survive by some miracle, LTC will always be relegated to a trading tool for BTC.  we still can't buy anything with LTC and scrypt mining is an unsolvable problem.  with that in mind, i don't think it has a chance.
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August 11, 2014, 06:46:41 PM
 #10436

Fair enough, by those metrics I don't think it has a chance either...

But as it's the most liquid and highly-traded altcoin, I think it has another bubble  Cool




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Peter R
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August 11, 2014, 06:47:00 PM
 #10437

I keep saying that central banks get one final kick at the can: they can "sell out" by purchasing bitcoins with newly-created fiat until all confidence in fiat is lost.  Central banks would still have a big pile of coins to continue with monetary policy.  

I wonder how many coins they could get if they started doing this today. 

I'm guessing a good chunk - 1/3 of all in existence at least.  A lot of people would sell their coins before it was clear who was buying them.  And then it would take a bit to realize the CB's intention.  It would take some very high prices before everyone knew what was happening.  Over $100k, I'd guess.  We could hit $10k and nobody would even suspect it was any different than previous bubbles.

the risk for them doing this would be enormous.

reputational risk would include a market perception of fear of Bitcoin and lack of confidence in USD.  it would be a clear signal that they believe their future is doomed.  just "being in the game" would not facilitate monetary policy manipulation which is the raison d'etre for their existence in the first place.

if ppl found out they were doing this, everyone and their mother would pile in driving the price even higher to stratospheric levels.  i suppose they could find a proxy buyer to accumulate coins but if they accidentally pick a Snowden-type, they'd be screwed.

CB's aren't smart investors as far as i'm concerned.  look at Gordon Brown's faux pas.  during the noughts, CB's in general were selling gold for the most part.  the recent buying by Russia and China, i believe, will go down in history as yet another mistake.

no, i think the CB's, especially the Fed, are "all-in" with fiat.  that's not good; for them.

Cypher, I thought you believed that bitcoin could serve as a sort of reserve currency that enforced discipline.  If central banks hold gold on the asset side of their balance sheets, why can't they one day hold bitcoin?  If our world is truly going to transition from fiat to cryptocurrency, would this not be a natural step in the process?  

To me the relationship between central banks and bitcoin is a high-stakes game of chicken--viewed together as a cohesive system, it's in their best interest to ignore bitcoin; but viewed individually, it's in each CB's best interest to support bitcoin sooner than all the others if the end game is inevitable.  

In a bitcoin future, I also think they'll still be able to conduct monetary policy (albeit to a reduced extent).  They'll be able to lend from their huge bitcoin reserves when the economy slows, and increase the interest rate on those loans when the economy improves.  The beauty with bitcoin is that if they make poor decisions, their reserves will dwindle right alongside the notion that "wise men at the Fed" make better decisions for the economy than the free market.  

Run Bitcoin Unlimited (www.bitcoinunlimited.info)
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August 11, 2014, 06:47:43 PM
 #10438

I won't declare Litecoin dead until it clearly has deviated from its long-term pattern:

http://www.cryptocoincharts.info/v2/pair/ltc/btc/btc-e/alltime

That would mean a BTC mania with no corresponding LTC/BTC mania.

It's going to die eventually, the only question is whether or not they get another pump out of it first.
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August 11, 2014, 06:49:37 PM
 #10439

Not picking it up before USD 2.

It probably won't go that low. LTC spiraled last year until $1.50 while BTC was flat, then it followed its big brother upwards in November. The historical price connection between the two biggest coins in crypto is hard to deny--a rally in BTC usually means a rally in LTC.

Yup +1

I have my buy orders set at 0.009 LTC/BTC and I plan to at least triple my BTC invested from that point

even if it does survive by some miracle, LTC will always be relegated to a trading tool for BTC.  we still can't buy anything with LTC and scrypt mining is an unsolvable problem.  with that in mind, i don't think it has a chance.

Sure you can buy things with it, but the number of merchants isn't nearly as big. I do believe there is a giftcard service although I haven't tried it. After using it for awhile I do like the faster confirm times. As a trading tool to transfer value between exchanges it is useful, so for instance a LTC arbitrage bot might be more profitable deposits confirm much more quickly. Still, in the short/medium term it will rally with Bitcoin barring unforseen problems.
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August 11, 2014, 06:49:53 PM
 #10440

I won't declare Litecoin dead until it clearly has deviated from its long-term pattern:

http://www.cryptocoincharts.info/v2/pair/ltc/btc/btc-e/alltime

That would mean a BTC mania with no corresponding LTC/BTC mania.

It's going to die eventually, the only question is whether or not they get another pump out of it first.
I didn't know about this site, seems pretty good.
LTC price is still going down, I wouldn't say its death.. but it seems to be on a downward trend
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