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As I understand it Fidelity have bought a chunk of Bitcoin and are currently trying to buy more. They actually do not care about price, they just need the coins

As I understand it Fidelity have bought a chunk of Bitcoin and are currently trying to buy more. They actually do not care about price, they just need the coins so they can setup these new financial things they will let their bigger customers buy into, as part of the portfolio. The cold storage thing is no biggie, they will be holding their new and shiny bitcoins in many, many wallets. So a customer of theirs will be able to effectively buy one of these wallets rather than a stake in a nebulous fund. I have heard no mention of them wanting to buy the 'fake crptocurrencies', i.e. anything except 'bitcoin', which I think has appeal to their customers in a way that 'ethereum' or 'crypto-kitties' does not. But is this really progress? If a cafe has customers wanting some new fad food, e.g. 'kale and pulled pork burgers' and if they have staff that have bought into the 'kale and pulled pork' hype then they might as well add it to the menu. This is becoming a trope: "No one said when some of these early-stage Internet companies in 2000 were going out of business, 'Gee, the Internet is toast,'" Jessop said. "We don't focus too much on the price. It's a foundational technology — people are trying to get exposure to the trend and expect volatility in the assets themselves." Could be said about fidget spinners - they have only got started! In debating this point with a bitcoin 'bore' I was told that there was no innovation in the internet after the dot-com crash until 'ajax came along' and no 'new innovation' came along after that until the iphone came along. I didn't see it that way, but was it?

roymurdock 8y ago
Bitcoin is useful for evading currency controls, semi-anonymous digital payments, and speculation Blockchain is a new type of database that has larger applications that involve the tradeoff between efficiency and trust To answer your bigger question you have to ask yourself what you define as "progress" - is Bitcoin/blockchain new? Yes. Is either useful? Sure, for people who are looking to move money around semi anonymously, enforce more expensive supply chain tracking solutions, or make money selling new financial products. Is that progress? If you, like me, don't see new database/financial engineering that benefits a small group of technologists and financiers as potentially equal in value to the raise in standard of living across huge sections of the world brought by electrification, refrigeration, antibiotics, internal combustion engines, public roads, and white goods, then you may be interested in this thesis: https://www.nber.org/papers/w19895 https://www.nber.org/papers/w19895 "While no forecast of a future slowdown of innovation is needed, skepticism is offered here, particularly about the techno-optimists who currently believe that we are at a point of inflection leading to faster technological change. The paper offers several historical examples showing that the future of technology can be forecast 50 or even 100 years in advance and assesses widely discussed innovations anticipated to occur over the next few decades, including medical research, small robots, 3-D printing, big data, driverless vehicles, and oil-gas fracking."
- 21 8y ago
  > brought by electrification, refrigeration, antibiotics, internal combustion engines, public roads, and white goods Most of that stuff required financial engineering. The most developed countries on Earth, with the best of those things, also have the most developed financial markets. Coincidence?
  - Theodores 8y ago
    Sorry to mod you down... Antibiotics means Fleming, one guy worked it out, I wouldn't be here if it wasn't for him, my grandpa was one of the first to use penicillin and I don't see the bean-counters as having had anything to do with it, however, the war machine did. Henry Ford was the man that got America and the world motoring. He is an incredibly complex character however, he did not go to the city to raise money and he had no time for bean counters, hence the Jew-bashing nonsense that he got involved in. As for early motor innovation/discovery in Europe and America, it was the bicycle workshop that made it happen, not the bean counters with their 'financial engineering'. We are talking organic growth from paying customers buying bicycles from people that had workshops. The Wright Brothers also started with bicycles, hence the left/right hand thread they also lay claim to. Public roads also have a debt to the bicycle. Trains came before bicycles and roads ceased to connect towns when the trains were how people travelled. It was actually the bicycle and cyclists that got the roads paved, motorists were to come along a lot later. Your Interstate Highway System was again military-industrial complex, not some wonder brought to the world by bean-counters. Of course capitalism and the need to raise capital made a lot of things possible, the railways were obviously a massively speculative bubble at first. However, the industrial revolution is not a story of financial engineering. The bean counters had nothing to do with progress. And Henry Ford was not alone in wanting to avoid 'investors' like the plague. In the UK - cradle of the industrial revolution - the prominent industrialists tended to be Quakers with god rather than mammon on their side. (We skip over the slave trade part conveniently here - but you don't want that because that really is 'financial engineering', a.k.a. rape and pillage.)
    - kasey_junk 8y ago
      I don’t know if it counts as financial engineering but Ford took investments for both of his incarnations of the Ford company including from a banker.
fattire 8y ago
I dunno. For me, this initiative does not leave a good impression about Fidelity. Okay, maybe they're not buying a stake in bitcoin themselves, but even serving/promoting the cryptocurrency scene/culture seems pretty sketchy to me. (And wasn't the big selling point supposed to be that you bypassed the big financial institutions?)
- leppr 8y ago
  I too boycott exchanges trading SAR, VES, and other such "sketchy" currencies. Big financial institutions should stick to respectable assets. I also stopped using USD because I don't support the Iraq invasion.
- sueders101 8y ago
  The sketchy aura of cryptocurrencies(at least with regards to Bitcoin and Ethereum) seems to be progressively fading away. And if you’re solely looking at cryptocurrencies as a long term investment vehicle, it makes sense for Fidelity to have an offering for their customers.
  - stock_toaster 8y ago
    > The sketchy aura of cryptocurrencies(at least with regards to Bitcoin and Ethereum) seems to be progressively fading away. With tether still being a thing I have a /really/ hard time believing that.
    - village-idiot 8y ago
      Bitcoin is no longer the terrorist and drug runner’s currency of choice, there are other crypto’s for that. Bitcoin however is the white collar criminal’s crypto of choice.
tootie 8y ago
Bitcoin/crypto was designed with express intent of allowing financial transactions to be safe and trustworthy without a central broker (ie a bank). Since the value of a coin was essentially arbitrary, speculators with big graphics cards drove the price up leading a bubble which has attracted the sharks and now the whales. I haven't seen any major breakthroughs in the technology, but there has been innovation in the usage of coins from simple currency to investment securities. Arguably we've come full circle and Bitcoin is now the opposite of what it intended but that doesn't mean it isn't innovation. Frisbees used to be pie plates.
hnmonkey 8y ago
Where have you seen that they've bought Bitcoin and are trying to buy more? It would be interesting to see the evidence of this I think. And as a note... other cryptocurrencies aren't 'fake cryptocurrencies' since they're actually cryptocurrencies. There might be some scams for sure, but ones that are not Bitcoin are just not Bitcoin yet are still currency. Also, why are you putting quotes around different things like 'fake cryptocurrencies,' 'bitcoin,' 'ethereum,' 'crypto-kitties,' 'kale and pulled pork burgers,' 'bore,' 'ajax came along,' and 'new innovation?' I'm not sure I understand what you're trying to imply there.
- Theodores 8y ago
  Not every financial dealing is in the papers, sometimes you need to know people with skin in the game to know what is going on. They aren't buying coins through the 'over the counter' ways basement-dwelling kids buy coins though. If you want sizeable quantities of Bitcoin then you need to be buying very differently in a whole new world of brokering. None of this affects the price you see on exchanges, as you can imagine someone buying USD billion worth of coins is an entirely different venture, exchanges can't supply that, they don't have enough sellers. You have to reach out to people who mined significant quantities years ago and also have the problem of not being able to sell on 'Coinbase grade' exchanges. Regarding 'fake cryptocurrencies', there is a big distinction between Bitcoin and every other coin. Bitcoin genuinely isn't controlled by one individual, it is actually decentralized in the true sense. Is anything else? A second point regarding 'fake cryptocurrencies' is that a currency - crypto or otherwise - has to be a means of exchange. Apart from in-game tokens and gambling chips there are not a lot of things you can buy with these wonders of the blockchain. Bitcoin is different in that regard, you might struggle to buy things with it at your local newsagent, however, it did gain value as a currency for buying drugs in the days of the Silk Road. You can donate to Wikileaks with it too. There was a time when you could buy other things with it, even a Dell computer. Although Bitcoin did not make the cut for retail transactions it did morph into digital gold, definitely with value as a currency in the eyes of many, albeit with tax dodging benefits. A third point. From a city point of view Bitcoin is a commodity, everything else is merely an 'unlicensed security'. Of course there are those who want to beg to differ on this. But we live in a world where tomato ketchup can be deemed a 'vegetable' by regulatory types. The distinction is that coins that are decentralised in name are still with a central point of control due to having a company/org that can be identified as starting it. This is an inescapable distinction. Due to history Bitcoin has ended up as a unicorn, it is not possible to anonymously setup another coin and walk away from it as happened with 'Satoshi Nakamoto', who created what 'he' did from the 1996 NSA White Paper on blockchain things, allegedly. Every subsequent coin has creators, whether they promise anonymity and give away 100% of the coins to strangers matters not. At time of writing it does not look like anything but Bitcoin really is satisfying points 1 - 3 to make it as something that is a currency in the true sense of the word. Words are our servants and not our masters and the term 'unlicensed security' is generous, 'crypto-currency' is a bit too generous since means of exchange is far from satisfied. 'Tokens' is good, as in those things you might buy to spend in a car wash. 'Chips' would suit me fine too, as in those things you buy at a casino. Regarding the use of quotes, I am not an American and I know that U.S. readers do not understand humour that is used elsewhere in the English speaking world. American English is very different, for instance the country name 'Ireland' is pronounced 'Ireland' but Americans think it is 'I-re-land'. Poe's Law applies and on HN there is not the custom of using emojis, therefore I tend to use air quotes to indicate that I am not being deadly serious about analogies and phrases that Americans may consider pejorative.

roymurdock 8y ago

Bitcoin is useful for evading currency controls, semi-anonymous digital payments, and speculation Blockchain is a new type of database that has larger applications that involve the tradeoff between efficiency and trust To answer your bigger question you have to ask yourself what you define as "progress" - is Bitcoin/blockchain new? Yes. Is either useful? Sure, for people who are looking to move money around semi anonymously, enforce more expensive supply chain tracking solutions, or make money selling new financial products. Is that progress? If you, like me, don't see new database/financial engineering that benefits a small group of technologists and financiers as potentially equal in value to the raise in standard of living across huge sections of the world brought by electrification, refrigeration, antibiotics, internal combustion engines, public roads, and white goods, then you may be interested in this thesis: https://www.nber.org/papers/w19895 https://www.nber.org/papers/w19895 "While no forecast of a future slowdown of innovation is needed, skepticism is offered here, particularly about the techno-optimists who currently believe that we are at a point of inflection leading to faster technological change. The paper offers several historical examples showing that the future of technology can be forecast 50 or even 100 years in advance and assesses widely discussed innovations anticipated to occur over the next few decades, including medical research, small robots, 3-D printing, big data, driverless vehicles, and oil-gas fracking."

21 8y ago
> brought by electrification, refrigeration, antibiotics, internal combustion engines, public roads, and white goods Most of that stuff required financial engineering. The most developed countries on Earth, with the best of those things, also have the most developed financial markets. Coincidence?
- Theodores 8y ago
  Sorry to mod you down... Antibiotics means Fleming, one guy worked it out, I wouldn't be here if it wasn't for him, my grandpa was one of the first to use penicillin and I don't see the bean-counters as having had anything to do with it, however, the war machine did. Henry Ford was the man that got America and the world motoring. He is an incredibly complex character however, he did not go to the city to raise money and he had no time for bean counters, hence the Jew-bashing nonsense that he got involved in. As for early motor innovation/discovery in Europe and America, it was the bicycle workshop that made it happen, not the bean counters with their 'financial engineering'. We are talking organic growth from paying customers buying bicycles from people that had workshops. The Wright Brothers also started with bicycles, hence the left/right hand thread they also lay claim to. Public roads also have a debt to the bicycle. Trains came before bicycles and roads ceased to connect towns when the trains were how people travelled. It was actually the bicycle and cyclists that got the roads paved, motorists were to come along a lot later. Your Interstate Highway System was again military-industrial complex, not some wonder brought to the world by bean-counters. Of course capitalism and the need to raise capital made a lot of things possible, the railways were obviously a massively speculative bubble at first. However, the industrial revolution is not a story of financial engineering. The bean counters had nothing to do with progress. And Henry Ford was not alone in wanting to avoid 'investors' like the plague. In the UK - cradle of the industrial revolution - the prominent industrialists tended to be Quakers with god rather than mammon on their side. (We skip over the slave trade part conveniently here - but you don't want that because that really is 'financial engineering', a.k.a. rape and pillage.)
  - kasey_junk 8y ago
    I don’t know if it counts as financial engineering but Ford took investments for both of his incarnations of the Ford company including from a banker.

fattire 8y ago

I dunno. For me, this initiative does not leave a good impression about Fidelity. Okay, maybe they're not buying a stake in bitcoin themselves, but even serving/promoting the cryptocurrency scene/culture seems pretty sketchy to me. (And wasn't the big selling point supposed to be that you bypassed the big financial institutions?)

leppr 8y ago
I too boycott exchanges trading SAR, VES, and other such "sketchy" currencies. Big financial institutions should stick to respectable assets. I also stopped using USD because I don't support the Iraq invasion.
sueders101 8y ago
The sketchy aura of cryptocurrencies(at least with regards to Bitcoin and Ethereum) seems to be progressively fading away. And if you’re solely looking at cryptocurrencies as a long term investment vehicle, it makes sense for Fidelity to have an offering for their customers.
- stock_toaster 8y ago
  > The sketchy aura of cryptocurrencies(at least with regards to Bitcoin and Ethereum) seems to be progressively fading away. With tether still being a thing I have a /really/ hard time believing that.
  - village-idiot 8y ago
    Bitcoin is no longer the terrorist and drug runner’s currency of choice, there are other crypto’s for that. Bitcoin however is the white collar criminal’s crypto of choice.

tootie 8y ago

Bitcoin/crypto was designed with express intent of allowing financial transactions to be safe and trustworthy without a central broker (ie a bank). Since the value of a coin was essentially arbitrary, speculators with big graphics cards drove the price up leading a bubble which has attracted the sharks and now the whales. I haven't seen any major breakthroughs in the technology, but there has been innovation in the usage of coins from simple currency to investment securities. Arguably we've come full circle and Bitcoin is now the opposite of what it intended but that doesn't mean it isn't innovation. Frisbees used to be pie plates.

hnmonkey 8y ago

Where have you seen that they've bought Bitcoin and are trying to buy more? It would be interesting to see the evidence of this I think. And as a note... other cryptocurrencies aren't 'fake cryptocurrencies' since they're actually cryptocurrencies. There might be some scams for sure, but ones that are not Bitcoin are just not Bitcoin yet are still currency. Also, why are you putting quotes around different things like 'fake cryptocurrencies,' 'bitcoin,' 'ethereum,' 'crypto-kitties,' 'kale and pulled pork burgers,' 'bore,' 'ajax came along,' and 'new innovation?' I'm not sure I understand what you're trying to imply there.

Theodores 8y ago
Not every financial dealing is in the papers, sometimes you need to know people with skin in the game to know what is going on. They aren't buying coins through the 'over the counter' ways basement-dwelling kids buy coins though. If you want sizeable quantities of Bitcoin then you need to be buying very differently in a whole new world of brokering. None of this affects the price you see on exchanges, as you can imagine someone buying USD billion worth of coins is an entirely different venture, exchanges can't supply that, they don't have enough sellers. You have to reach out to people who mined significant quantities years ago and also have the problem of not being able to sell on 'Coinbase grade' exchanges. Regarding 'fake cryptocurrencies', there is a big distinction between Bitcoin and every other coin. Bitcoin genuinely isn't controlled by one individual, it is actually decentralized in the true sense. Is anything else? A second point regarding 'fake cryptocurrencies' is that a currency - crypto or otherwise - has to be a means of exchange. Apart from in-game tokens and gambling chips there are not a lot of things you can buy with these wonders of the blockchain. Bitcoin is different in that regard, you might struggle to buy things with it at your local newsagent, however, it did gain value as a currency for buying drugs in the days of the Silk Road. You can donate to Wikileaks with it too. There was a time when you could buy other things with it, even a Dell computer. Although Bitcoin did not make the cut for retail transactions it did morph into digital gold, definitely with value as a currency in the eyes of many, albeit with tax dodging benefits. A third point. From a city point of view Bitcoin is a commodity, everything else is merely an 'unlicensed security'. Of course there are those who want to beg to differ on this. But we live in a world where tomato ketchup can be deemed a 'vegetable' by regulatory types. The distinction is that coins that are decentralised in name are still with a central point of control due to having a company/org that can be identified as starting it. This is an inescapable distinction. Due to history Bitcoin has ended up as a unicorn, it is not possible to anonymously setup another coin and walk away from it as happened with 'Satoshi Nakamoto', who created what 'he' did from the 1996 NSA White Paper on blockchain things, allegedly. Every subsequent coin has creators, whether they promise anonymity and give away 100% of the coins to strangers matters not. At time of writing it does not look like anything but Bitcoin really is satisfying points 1 - 3 to make it as something that is a currency in the true sense of the word. Words are our servants and not our masters and the term 'unlicensed security' is generous, 'crypto-currency' is a bit too generous since means of exchange is far from satisfied. 'Tokens' is good, as in those things you might buy to spend in a car wash. 'Chips' would suit me fine too, as in those things you buy at a casino. Regarding the use of quotes, I am not an American and I know that U.S. readers do not understand humour that is used elsewhere in the English speaking world. American English is very different, for instance the country name 'Ireland' is pronounced 'Ireland' but Americans think it is 'I-re-land'. Poe's Law applies and on HN there is not the custom of using emojis, therefore I tend to use air quotes to indicate that I am not being deadly serious about analogies and phrases that Americans may consider pejorative.