4 ms·

It's going to look a lot less like a Ponzi scheme if/when the dollar collapses.

by gfodor 5y ago

arcticbull 5y ago
No, it won't. It's a negative-sum system that redistributes wealth from new entrants to old entrants and miners. It's a pyramid. And what exact path do you see a 'dollar collapse'?
- gfodor 5y ago
  Sorry, I'm not going to be dragged into a debate about if/when the collapse will happen. But if it does, your claim bitcoin is a pyramid will look silly, since it will be one of several assets that will be rushed into as a safe haven from inflationary forces. If you want to take the position such a collapse would cause a flight from crypto assets, be my guest.
  - arcticbull 5y ago
    In the mad max future you describe the only currency will be guns and ammo. Crypto requires a functional power grid and internet.
    - gfodor 5y ago
      False - there are plenty of scenarios where you have a power grid and ability to reach the Internet and still need to transact illegally to survive.
  - imtringued 5y ago
    The value of cryptocurrency depends on how much people are willing to provide goods and services in exchange for cryptocurrency. If people are just trading crypto:dollar then a dollar collapse could destroy crypto too.
    - chii 5y ago
      It the dollar collapsed, but the internet & support infrastructure remained, then people might be more willing to accept bitcoin over dollars.
- olalonde 5y ago
  Gold and the US dollar, to some extent, fit that characterization as well.
jollybean 5y ago
In a time of economic calamity, if you think your grocery store will take 'Coolbits', or their employees will take 'WokeCoin' as payment, or suppliers will accept 'TrumpGoldBucks' I think you'd be mistaken. If there were a serious problem with the USD, first, because of it's seigneurage position in the world, it would imply a 'giant crisis'. It would be bad. People would switch to other currencies like Euros, Pounds, Canadian / Australian Dollars and Swiss Franks, RMB and Yen because they are fungible and transactable. Gold and other commodities would increase in value, but only as stores of value, they're not good for transactions.
- gfodor 5y ago
  Nobody said the grocery store would take crypto. But you'd park your capital in places that are safe havens and convert out as late as possible to the (increasingly worthless) dollars. Arguably we're already at a place where keeping any non-emergency funds in USD is a terrible idea. My point is exactly what you said: that you'd see a flight of capital to hard assets like gold and bitcoin to shield it from inflationary forces and their contagion. In that scenario, bitcoin is no more a "ponzi" than gold.
  - jollybean 5y ago
    Crypto is a delusion. It's a very bad idea to move money into an 'asset' that has no value other than to the degree other people share that delusion. Real-estate is valuable on some level, so are most other assets - even 'currencies', however poorly managed, are valuable because people need them to do stuff. The worst place to go is crypto, it's the bottom of the 'store of value' equation in almost every way - the fact that the government would wipe them out immediately being just one of many risks. Cypto, at least the way they exist today, have no rational place in anything other than for entertainment and intellectual speculation.
    - gfodor 5y ago
      Your opinion is duly noted, my opinion is that your opinion has little bearing on what the price of BTC will be if the purchasing power of a dollar drops quickly. My prediction is that demand for it will surge and so the price will go up somewhat inversely. I'll note that you're not taking the counter position, just stating why that would be a "very bad idea" for people to demand it. I'm guessing you've been saying the same thing as the price has gone up to $50k. At some point you'll either be proven right in a massive collapse or will have to capitulate that the market is not irrational. What is your threshold? (Year/price threshold where you'd capitulate.) If you're on your death bed and BTC is worth $1M, will you change your mind, or just presume you didn't live long enough to see yourself proven right?
tablespoon 5y ago
> It's going to look a lot less like a Ponzi scheme if/when the dollar collapses. Even if it does, Bitcoin may very well collapse before the dollar.

It's going to look a lot less like a Ponzi scheme if/when the dollar collapses.

by gfodor 5y ago

It's going to look a lot less like a Ponzi scheme if/when the dollar collapses.

No, it won't. It's a negative-sum system that redistributes wealth from new entrants to old entrants and miners. It's a pyramid. And what exact path do you see a 'dollar collapse'?

gfodor 5y ago
Sorry, I'm not going to be dragged into a debate about if/when the collapse will happen. But if it does, your claim bitcoin is a pyramid will look silly, since it will be one of several assets that will be rushed into as a safe haven from inflationary forces. If you want to take the position such a collapse would cause a flight from crypto assets, be my guest.
- arcticbull 5y ago
  In the mad max future you describe the only currency will be guns and ammo. Crypto requires a functional power grid and internet.
  - gfodor 5y ago
    False - there are plenty of scenarios where you have a power grid and ability to reach the Internet and still need to transact illegally to survive.
- imtringued 5y ago
  The value of cryptocurrency depends on how much people are willing to provide goods and services in exchange for cryptocurrency. If people are just trading crypto:dollar then a dollar collapse could destroy crypto too.
  - chii 5y ago
    It the dollar collapsed, but the internet & support infrastructure remained, then people might be more willing to accept bitcoin over dollars.
olalonde 5y ago
Gold and the US dollar, to some extent, fit that characterization as well.

jollybean 5y ago

In a time of economic calamity, if you think your grocery store will take 'Coolbits', or their employees will take 'WokeCoin' as payment, or suppliers will accept 'TrumpGoldBucks' I think you'd be mistaken. If there were a serious problem with the USD, first, because of it's seigneurage position in the world, it would imply a 'giant crisis'. It would be bad. People would switch to other currencies like Euros, Pounds, Canadian / Australian Dollars and Swiss Franks, RMB and Yen because they are fungible and transactable. Gold and other commodities would increase in value, but only as stores of value, they're not good for transactions.

gfodor 5y ago
Nobody said the grocery store would take crypto. But you'd park your capital in places that are safe havens and convert out as late as possible to the (increasingly worthless) dollars. Arguably we're already at a place where keeping any non-emergency funds in USD is a terrible idea. My point is exactly what you said: that you'd see a flight of capital to hard assets like gold and bitcoin to shield it from inflationary forces and their contagion. In that scenario, bitcoin is no more a "ponzi" than gold.
- jollybean 5y ago
  Crypto is a delusion. It's a very bad idea to move money into an 'asset' that has no value other than to the degree other people share that delusion. Real-estate is valuable on some level, so are most other assets - even 'currencies', however poorly managed, are valuable because people need them to do stuff. The worst place to go is crypto, it's the bottom of the 'store of value' equation in almost every way - the fact that the government would wipe them out immediately being just one of many risks. Cypto, at least the way they exist today, have no rational place in anything other than for entertainment and intellectual speculation.
  - gfodor 5y ago
    Your opinion is duly noted, my opinion is that your opinion has little bearing on what the price of BTC will be if the purchasing power of a dollar drops quickly. My prediction is that demand for it will surge and so the price will go up somewhat inversely. I'll note that you're not taking the counter position, just stating why that would be a "very bad idea" for people to demand it. I'm guessing you've been saying the same thing as the price has gone up to $50k. At some point you'll either be proven right in a massive collapse or will have to capitulate that the market is not irrational. What is your threshold? (Year/price threshold where you'd capitulate.) If you're on your death bed and BTC is worth $1M, will you change your mind, or just presume you didn't live long enough to see yourself proven right?

tablespoon 5y ago

> It's going to look a lot less like a Ponzi scheme if/when the dollar collapses. Even if it does, Bitcoin may very well collapse before the dollar.