5 ms·

at the prices of bitcoin right now, about every day I wonder if it's the day to cash out. While I see these changes are to stop money laundering, I wonder what

by Curbob 10y ago

at the prices of bitcoin right now, about every day I wonder if it's the day to cash out. While I see these changes are to stop money laundering, I wonder what percentage of the bitcoin worth is from it being used for money laundering.

bdcravens 10y ago
And more importantly, how much have you benefited from it? I don't mean in the moral sense, but as in how much of Bitcoin's gains have come from a house of cards with no long-term foundation, and how much from "organic" growth as a currency?
- logicallee 10y ago
  I hate bitcoin because by design it burns resources, polluting the environment, and by design it enables extralegal monetary remittance subject to the laws of no one, no matter how "legitimate" those laws and no matter how well they reflect the will of the governed. The idea of government is fundamental: otherwise, might makes right. Bitcoin makes it impossible to ensure anything like that is happening. I state all this as my "credentials" for making the statement that theoretically it is not a house of cards. Transactions could take 72 hours to clear. The blockchain could be 1.7 terabytes in size. And transactions could cost hundreds of dollars. None of this would stop bitgold from having a market capitalization in the hundreds of billions. (What could stop it is some technical bugs or mismanagement.) It is emphatically not a house of cards. (But I don't like it.) In what way is it a house of cards? It is a legitimately scarce resource being legitimately used exactly as designed.
  - bdcravens 10y ago
    I'm referring to the gains of Bitcoin, not the currency itself. Bitcoin advocates point to price growth as a sign of stability and use, but I'd posit that much of the growth comes from early use-cases which will likely disappear due to increased regulation (drugs, tax avoidance, escaping capital controls) or the result of fake market conditions (WillyBot, artificial Chinese volume due to bots operating in a zero-fee environment)
  - emiliobumachar 10y ago
    About the environment, I have not crunched the numbers, but I suppose Bitcoin is actually greener than gold. Literal mining is messy.
    - srssays 10y ago
      Presumably bitcoin mining is generally done in places that have hydro-powered electricity (cheaper)?
- sayurichick 10y ago
  my interest in btc began to increase when I started to learn about "money". Did you know that all fiat (government issued/backed) currency is inflationary by nature? The reason the Swiss used to be regarded for having the strongest currency was because it was still backed by gold. They are mostly fiat now sadly. So you say Bitcoin has no long term foundation? How about a hedge against inflation? the USD will ALWAYS lose value over time ABSOLUTELY. If I don't want to lose the value of my fiat, and there is enough people who also feel the same way by exchanging it for cryptocurrency, in which direction can we expect the price of bitcoin to go ? *sidenote - bitcoin is capped at 21 million tokens, hence NOT inflationary.
  - bdcravens 10y ago
    Like so many discussions on Bitcoin's value, you're conflating the currency/technology with the currency's value. Bitcoin is inflationary; it's exchange rate is not. The exchange rate is influenced by news and psychology, and fiat inflation has very little influence on the price. I'd call that a weak foundation, and much of what we've seen in the past may not continue (anonymous drug sales, lack of government regulation, etc). Bitcoin has several years before it's an inflationary hedge, but in the meanwhile, it's a great speculative play with potentially unlimited upside. There's also an unlimited number of events that could occur in the next twelve months to destroy its exchange rate.
Symmetry 10y ago
I expect money laundering is only a small fraction. On the other hand, the use of Bitcoin to evade currency controls and take legitimately earned money out of China is probably a large fraction of total Bitcoin use.
brilliantcode 10y ago
I'm puzzled as to why the prices have not collapsed. Removing China from Bitcoin....isn't there a big shock in the hash rate and thus the prices?
- placeybordeaux 10y ago
  Why do you think the hash rate will change? This is talking about the exchanges not the mines.
  - xyzzy4 10y ago
    If the price collapses then the cost of electricity will be greater than the mining rate
Animats 10y ago
If you have anything in a Bitcoin exchange in China, get it out now. Even if you have to take it in RMB. It's not clear if those operations have 100% of the reserves they're supposed to have. Do you want to gamble on that?

by Curbob 10y ago

bdcravens 10y ago

And more importantly, how much have you benefited from it? I don't mean in the moral sense, but as in how much of Bitcoin's gains have come from a house of cards with no long-term foundation, and how much from "organic" growth as a currency?

logicallee 10y ago
I hate bitcoin because by design it burns resources, polluting the environment, and by design it enables extralegal monetary remittance subject to the laws of no one, no matter how "legitimate" those laws and no matter how well they reflect the will of the governed. The idea of government is fundamental: otherwise, might makes right. Bitcoin makes it impossible to ensure anything like that is happening. I state all this as my "credentials" for making the statement that theoretically it is not a house of cards. Transactions could take 72 hours to clear. The blockchain could be 1.7 terabytes in size. And transactions could cost hundreds of dollars. None of this would stop bitgold from having a market capitalization in the hundreds of billions. (What could stop it is some technical bugs or mismanagement.) It is emphatically not a house of cards. (But I don't like it.) In what way is it a house of cards? It is a legitimately scarce resource being legitimately used exactly as designed.
- bdcravens 10y ago
  I'm referring to the gains of Bitcoin, not the currency itself. Bitcoin advocates point to price growth as a sign of stability and use, but I'd posit that much of the growth comes from early use-cases which will likely disappear due to increased regulation (drugs, tax avoidance, escaping capital controls) or the result of fake market conditions (WillyBot, artificial Chinese volume due to bots operating in a zero-fee environment)
- emiliobumachar 10y ago
  About the environment, I have not crunched the numbers, but I suppose Bitcoin is actually greener than gold. Literal mining is messy.
  - srssays 10y ago
    Presumably bitcoin mining is generally done in places that have hydro-powered electricity (cheaper)?
sayurichick 10y ago
my interest in btc began to increase when I started to learn about "money". Did you know that all fiat (government issued/backed) currency is inflationary by nature? The reason the Swiss used to be regarded for having the strongest currency was because it was still backed by gold. They are mostly fiat now sadly. So you say Bitcoin has no long term foundation? How about a hedge against inflation? the USD will ALWAYS lose value over time ABSOLUTELY. If I don't want to lose the value of my fiat, and there is enough people who also feel the same way by exchanging it for cryptocurrency, in which direction can we expect the price of bitcoin to go ? *sidenote - bitcoin is capped at 21 million tokens, hence NOT inflationary.
- bdcravens 10y ago
  Like so many discussions on Bitcoin's value, you're conflating the currency/technology with the currency's value. Bitcoin is inflationary; it's exchange rate is not. The exchange rate is influenced by news and psychology, and fiat inflation has very little influence on the price. I'd call that a weak foundation, and much of what we've seen in the past may not continue (anonymous drug sales, lack of government regulation, etc). Bitcoin has several years before it's an inflationary hedge, but in the meanwhile, it's a great speculative play with potentially unlimited upside. There's also an unlimited number of events that could occur in the next twelve months to destroy its exchange rate.

Symmetry 10y ago

I expect money laundering is only a small fraction. On the other hand, the use of Bitcoin to evade currency controls and take legitimately earned money out of China is probably a large fraction of total Bitcoin use.

brilliantcode 10y ago

I'm puzzled as to why the prices have not collapsed. Removing China from Bitcoin....isn't there a big shock in the hash rate and thus the prices?

placeybordeaux 10y ago
Why do you think the hash rate will change? This is talking about the exchanges not the mines.
- xyzzy4 10y ago
  If the price collapses then the cost of electricity will be greater than the mining rate

Animats 10y ago

If you have anything in a Bitcoin exchange in China, get it out now. Even if you have to take it in RMB. It's not clear if those operations have 100% of the reserves they're supposed to have. Do you want to gamble on that?