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How would that be better than holding gold? Fees for large transactions of btc are getting higher than the cost of physically moving gold anyway, and the chance

How would that be better than holding gold? Fees for large transactions of btc are getting higher than the cost of physically moving gold anyway, and the chances to lose it or get it stolen are higher.

shawabawa3 3y ago
Fees for storing and moving bitcoin are absolutely not approaching the costs for gold Try moving $10M of gold from one end of the world to another for under $100
- nikolay 3y ago
  Well, how about trying to move $200 in Bitcoin - it's the most expensive funds transfer. You cannot "move" $50 as it's cost-prohibitive!
  - mratsim 3y ago
    Try moving $50 in a private bank. Fees for stocks start at $200.
    - nikolay 3y ago
      I do it every week. It's free (Zelle), or it's incredibly cheap. It has predictable cost and timeframe, too, unlike Bitcoin, with no customer service and no way to remediate errors and fraud! So, even if I pay to the banks, it covers people and insurance - unlike with Bitcoin, which just burns fossil fuels so that Chinese miners can get richer and richer stealing subsidized electricity!
      - trompetenaccoun 3y ago
        That's like Robinhood users telling me they pay zero trading fees. Then how does RobbingHood make money? Think about it, running an exchange has costs. I really don't understand how people can be so easily tricked by "free" offers that are actually more expensive when you do the math. PFOF (i.e. legal theft), unfavorable spread, etc... They get their money one way or another. It can technically make sense when you're trading something like $50 worth of a stock, because of course that would not be reasonable with a brokerage using a traditional fee structure. But frankly trading such low figures is silly. You have to invest a lot of time (=money) in research when stock picking, else you're guaranteed to lose sooner or later. But the reward simply isn't there. Even if you make 100% profit you now have $100. Better put that money into an index fund savings plan and forget about active trading. You're guaranteed to receive a better reward on your investment just getting a part time job selling fast food or something like that.
        nikolay 3y ago
        I pay for Coinbase One - more than I've ever paid to any bank for a year. And what's my benefit? Almost none, because I still have to pay the immense fees! In crypto, the margins are much wider than in any traditional financial services, which rely on volume and wide adoption!
        trompetenaccoun 3y ago
        Coinbase is a centralized exchange, the trading does not happen onchain so the trading itself has nothing to do with crypto, it's fundamentally just like a stock exchange. Onchain trading would be using a decentralized exchange, and that's much cheaper now on Ethereum L2 for example (although still in the experimental phase, slowly getting there). Coinbase is btw one of the more expensive CEX, but I guess you're there paying the higher fees and not with the competition, because they're reputable and unlikely to steal or lose your funds, correct? The great thing about cryptocurrency is you can trade it any way you like. You can take your tokens in self custody. You can in theory trade with a random guy on the street, without any third party involvement and with zero fees. I know a guy who does this because he's worried about a coming police state, so he buys everything with cash during meetups. I think the high fees CEX are currently charging, which you're right about, has multiple reasons. One is it's a completely new and largely unregulated space. There are a lot of risks, they need to set aside a lot for litigation. FTX had very low fees for example while stealing customer funds to lobby Washington ;) Coinbase is legit but has to spend a lot on legal fees and compliance, because they're in it for the long run. Also a huge part of the reason is surely simply because they can. Crypto traders are making so much money that they're more likely to accept paying high fees than the average stock trader. That won't last forever, it's just because the market is new and volatility is crazy.
        Terr_ 3y ago
        > That's like Robinhood users telling me they pay zero trading fees. Then how does RobbingHood make money? I was reading a book about that recently, it boils down to: "You're not [just] the customer, you're [also] the product." Key term: Payment For Order Flow (PFOF) [0], with the book-paragraphs I was thinking of down below: ____________ > Retail investors have one hugely attractive property when considered by a professional – they’re dumb money. Not only are they unlikely to have private information, a lot of the time they haven’t taken care to consider all the public information. When the party on the other side of the trade is a small investor (or a lot of orders from small investors all over the country, ‘bundled’ by a retail stockbroker), you can be reasonably sure that you’re not taking too big a risk that the person selling stock to you knows something about it that you don’t. > This makes retail orders very valuable to the market. One of the reasons why stock brokerage commissions are so cheap these days is that retail brokers have actually realised how valuable they are. They charge a quite substantial fee to players like the high-frequency traders for the privilege of dealing against their order flow, and they rebate some of this fee to their customers. But the retail orders would eventually dry up if the customers lost too much or felt that they weren’t being given a fair chance. And without a steady flow of ‘dumb money’ lubricating the wheels, the professionals would find it a lot harder to trade, as they’d always suspect each other’s motives for buying or selling. -- Lying For Money by Dan Davies [0] https://www.investopedia.com/terms/p/paymentoforderflow.asp https://www.investopedia.com/terms/p/paymentoforderflow.asp
  - michaelt 3y ago
    Simply divide your BTC into paper wallets in a variety of sizes from $5 to $100, and when you need to make a transaction, mail the right combination of wallets to the person you want to pay. /s
    - nikolay 3y ago
      Mailing costs money, too; it's slow, and there's no proof that I've made the transfer. Plus, if that person wants to consolidate their funds, they will have to pay the crazy costs still, i.e. they will put it into their pricing model! How about comparing apples to apples?!
      - blep_ 3y ago
        And the receiver has no guarantee that I didn't photocopy the paper before mailing it.
  - npoc 3y ago
    The bitcoin network is best suited for storing and moving large amounts of monetary energy. Compared to any other monetary system, it does this the most efficiently (i.e. with the least amount of energy loss), both during storage and during transfer. Note that the transfer of monetary value/energy is final settlement (i.e. it's not just an IOU that will be settled at later date, like most bank payments). Ultimately the base layer network will be used for settlement between banks, national reserve asset/currency etc. and faster, cheaper payment rails will be built on top of it (e.g. the Lightning Network)
    - dovakin 3y ago
      The Lightning Network isn’t working as intended and the devs have basically admitted it’s never going to though. I don’t think blockchain as it is built for the btc network is as scalable as you think it can be.
      - jazzyjackson 3y ago
        huh, can you give me some context? I never used lightning but it sounded like it was maturing, what went wrong?
      - nikolay 3y ago
        Is this why Coinbase does not support it?
        siwatanejo 3y ago
        Coinbase is a joke as an exchange. Other behemoths exchanges support it, such as Kraken or Binance. But I recommend you p2p exchanges, which don't require KYC, e.g. RoboSats or LNP2Pbot.
        nikolay 3y ago
        It's the only exchange without a bad reputation, theft, inside trading, etc.
      - 3y ago
  - yreg 3y ago
    Probably not a worry for Blackrock.
    - nikolay 3y ago
      That's what it boils down to - Bitcoin is nothing it promised to be; it's like the equivalent of penny stocks... except that it's quite the opposite in terms if pricing.
  - RestlessMind 3y ago
    Using Bitcoin network to move small amounts of money is akin to using a jumbo jet to go grocery shopping. There are better blockchains out there for small money transfers.
    - nikolay 3y ago
      So, I have to go through a multitude of swaps, i.e losses, if Bitcoin is the real deal?! I've tried it, it's even more expensive than doing it directly!
      - RestlessMind 3y ago
        Sorry you lost me. Can you please clarify?
        nikolay 3y ago
        If Bitcoin is a wealth store and I need to convert Bitcoin to USDC, let's say, just to make a payment, or if I get paid in USDC and have to convert it back to Bitcoin to store, then I still need to pay even more than just the Bitcoin fees if I pay directly in Bitcoin or get paid directly in Bitcoin! Often the margin on the crypto currency conversion is higher than the Bitcoin network fees.
        RestlessMind 3y ago
        True, which is why you do not convert Bitcoin to USDC for each micropayment. You batch all the USDC transactions until you have a sizeable amount to touch Bitcoin network. Ultimately, I see Bitcoin as Gold. You do not touch your gold savings for buying your daily coffee. For that, you have USDs in your wallet. But you still transact with Gold once in a while when it makes sense.
        nikolay 3y ago
        So, if wires are chaeper in EUR (thanks to SEPA), than even if I want to store my wealth in USD, I need to always sell USD for EUR just to do wires?! That's crazy! It's a patchwork an a scheme, not an alternative to fiat, gold, or stocks!
treyd 3y ago
"Large" here meaning physically large in terms of bytes, it's irrespective of the amount transferred in the tx. If you have high volume in a relatively low number of transactions and are relatively good with input/output hygiene then the actual fees paid probably won't break the bank.
factorialboy 3y ago
Strawman. I never claimed Bitcoin is the only hedge. Certainly gold has it s place. Lightning network fees are negligible. So that argument doesn't hold either.
- Workaccount2 3y ago
  Lighting network isn't really bitcoin though. More like an optional bolt on peripheral network with it's own set of issues.
  - nullc 3y ago
    It's accurate to say that lightning makes it's own tradeoffs, but it's not accurate to say it's not Bitcoin. Every lightning transaction is just a regular bitcoin transaction that could be posted to the chain at any time-- you just don't have to, because the scripting functionality has been used so that if a counterparty posts an earlier state you can effectively cancel it. The switch to deferring updates unless there is a dispute gives a massive advantage to scaling (e.g. number of tx per second possible goes up the more users there are rather than being a global constant), instantaneouness of transaction irreversability (as fast as the involved parties can make a couple round trips, vs an hour for multiple confirmations), and potentially privacy (since not every update is globally broadcast). But these benefits come at a considerable cost of requiring a degree of active monitoring so if a counterparty posts an outdated state your software can respond, along with additional software complexity, etc. For some applications the benefits are well worth the costs, for others they aren't. To say it's not bitcoin is like saying multisignature transactions aren't bitcoin. In both cases they're ways of using the existing functionality. In both cases they require some additional software and different approaches. In both cases they use functionality built into the protocol which was intended for their purposes (payment channels being a concept originally described by Satoshi, and specifically accommodated in the transaction format). And in both cases they change the tradeoff surface somewhat.
nullc 3y ago
Gold has an inferior tax treatment. Gold has considerable storage/security costs compared to Bitcoin. Gold has considerable fake risks/costs compared to Bitcoin. The supply of gold is continually inflated by mining (also true for Bitcoin though the mining rate in bitcoin decreases over time).
houseatrielah 3y ago
World gold supply inflates at 2% per year due to mining. That's an key point of the Stock2Flow model.

shawabawa3 3y ago

Fees for storing and moving bitcoin are absolutely not approaching the costs for gold Try moving $10M of gold from one end of the world to another for under $100

nikolay 3y ago
Well, how about trying to move $200 in Bitcoin - it's the most expensive funds transfer. You cannot "move" $50 as it's cost-prohibitive!
- mratsim 3y ago
  Try moving $50 in a private bank. Fees for stocks start at $200.
  - nikolay 3y ago
    I do it every week. It's free (Zelle), or it's incredibly cheap. It has predictable cost and timeframe, too, unlike Bitcoin, with no customer service and no way to remediate errors and fraud! So, even if I pay to the banks, it covers people and insurance - unlike with Bitcoin, which just burns fossil fuels so that Chinese miners can get richer and richer stealing subsidized electricity!
    - trompetenaccoun 3y ago
      That's like Robinhood users telling me they pay zero trading fees. Then how does RobbingHood make money? Think about it, running an exchange has costs. I really don't understand how people can be so easily tricked by "free" offers that are actually more expensive when you do the math. PFOF (i.e. legal theft), unfavorable spread, etc... They get their money one way or another. It can technically make sense when you're trading something like $50 worth of a stock, because of course that would not be reasonable with a brokerage using a traditional fee structure. But frankly trading such low figures is silly. You have to invest a lot of time (=money) in research when stock picking, else you're guaranteed to lose sooner or later. But the reward simply isn't there. Even if you make 100% profit you now have $100. Better put that money into an index fund savings plan and forget about active trading. You're guaranteed to receive a better reward on your investment just getting a part time job selling fast food or something like that.
      - nikolay 3y ago
        I pay for Coinbase One - more than I've ever paid to any bank for a year. And what's my benefit? Almost none, because I still have to pay the immense fees! In crypto, the margins are much wider than in any traditional financial services, which rely on volume and wide adoption!
        trompetenaccoun 3y ago
        Coinbase is a centralized exchange, the trading does not happen onchain so the trading itself has nothing to do with crypto, it's fundamentally just like a stock exchange. Onchain trading would be using a decentralized exchange, and that's much cheaper now on Ethereum L2 for example (although still in the experimental phase, slowly getting there). Coinbase is btw one of the more expensive CEX, but I guess you're there paying the higher fees and not with the competition, because they're reputable and unlikely to steal or lose your funds, correct? The great thing about cryptocurrency is you can trade it any way you like. You can take your tokens in self custody. You can in theory trade with a random guy on the street, without any third party involvement and with zero fees. I know a guy who does this because he's worried about a coming police state, so he buys everything with cash during meetups. I think the high fees CEX are currently charging, which you're right about, has multiple reasons. One is it's a completely new and largely unregulated space. There are a lot of risks, they need to set aside a lot for litigation. FTX had very low fees for example while stealing customer funds to lobby Washington ;) Coinbase is legit but has to spend a lot on legal fees and compliance, because they're in it for the long run. Also a huge part of the reason is surely simply because they can. Crypto traders are making so much money that they're more likely to accept paying high fees than the average stock trader. That won't last forever, it's just because the market is new and volatility is crazy.
      - Terr_ 3y ago
        > That's like Robinhood users telling me they pay zero trading fees. Then how does RobbingHood make money? I was reading a book about that recently, it boils down to: "You're not [just] the customer, you're [also] the product." Key term: Payment For Order Flow (PFOF) [0], with the book-paragraphs I was thinking of down below: ____________ > Retail investors have one hugely attractive property when considered by a professional – they’re dumb money. Not only are they unlikely to have private information, a lot of the time they haven’t taken care to consider all the public information. When the party on the other side of the trade is a small investor (or a lot of orders from small investors all over the country, ‘bundled’ by a retail stockbroker), you can be reasonably sure that you’re not taking too big a risk that the person selling stock to you knows something about it that you don’t. > This makes retail orders very valuable to the market. One of the reasons why stock brokerage commissions are so cheap these days is that retail brokers have actually realised how valuable they are. They charge a quite substantial fee to players like the high-frequency traders for the privilege of dealing against their order flow, and they rebate some of this fee to their customers. But the retail orders would eventually dry up if the customers lost too much or felt that they weren’t being given a fair chance. And without a steady flow of ‘dumb money’ lubricating the wheels, the professionals would find it a lot harder to trade, as they’d always suspect each other’s motives for buying or selling. -- Lying For Money by Dan Davies [0] https://www.investopedia.com/terms/p/paymentoforderflow.asp https://www.investopedia.com/terms/p/paymentoforderflow.asp
- michaelt 3y ago
  Simply divide your BTC into paper wallets in a variety of sizes from $5 to $100, and when you need to make a transaction, mail the right combination of wallets to the person you want to pay. /s
  - nikolay 3y ago
    Mailing costs money, too; it's slow, and there's no proof that I've made the transfer. Plus, if that person wants to consolidate their funds, they will have to pay the crazy costs still, i.e. they will put it into their pricing model! How about comparing apples to apples?!
    - blep_ 3y ago
      And the receiver has no guarantee that I didn't photocopy the paper before mailing it.
- npoc 3y ago
  The bitcoin network is best suited for storing and moving large amounts of monetary energy. Compared to any other monetary system, it does this the most efficiently (i.e. with the least amount of energy loss), both during storage and during transfer. Note that the transfer of monetary value/energy is final settlement (i.e. it's not just an IOU that will be settled at later date, like most bank payments). Ultimately the base layer network will be used for settlement between banks, national reserve asset/currency etc. and faster, cheaper payment rails will be built on top of it (e.g. the Lightning Network)
  - dovakin 3y ago
    The Lightning Network isn’t working as intended and the devs have basically admitted it’s never going to though. I don’t think blockchain as it is built for the btc network is as scalable as you think it can be.
    - jazzyjackson 3y ago
      huh, can you give me some context? I never used lightning but it sounded like it was maturing, what went wrong?
    - nikolay 3y ago
      Is this why Coinbase does not support it?
      - siwatanejo 3y ago
        Coinbase is a joke as an exchange. Other behemoths exchanges support it, such as Kraken or Binance. But I recommend you p2p exchanges, which don't require KYC, e.g. RoboSats or LNP2Pbot.
        nikolay 3y ago
        It's the only exchange without a bad reputation, theft, inside trading, etc.
    - 3y ago
- yreg 3y ago
  Probably not a worry for Blackrock.
  - nikolay 3y ago
    That's what it boils down to - Bitcoin is nothing it promised to be; it's like the equivalent of penny stocks... except that it's quite the opposite in terms if pricing.
- RestlessMind 3y ago
  Using Bitcoin network to move small amounts of money is akin to using a jumbo jet to go grocery shopping. There are better blockchains out there for small money transfers.
  - nikolay 3y ago
    So, I have to go through a multitude of swaps, i.e losses, if Bitcoin is the real deal?! I've tried it, it's even more expensive than doing it directly!
    - RestlessMind 3y ago
      Sorry you lost me. Can you please clarify?
      - nikolay 3y ago
        If Bitcoin is a wealth store and I need to convert Bitcoin to USDC, let's say, just to make a payment, or if I get paid in USDC and have to convert it back to Bitcoin to store, then I still need to pay even more than just the Bitcoin fees if I pay directly in Bitcoin or get paid directly in Bitcoin! Often the margin on the crypto currency conversion is higher than the Bitcoin network fees.
        RestlessMind 3y ago
        True, which is why you do not convert Bitcoin to USDC for each micropayment. You batch all the USDC transactions until you have a sizeable amount to touch Bitcoin network. Ultimately, I see Bitcoin as Gold. You do not touch your gold savings for buying your daily coffee. For that, you have USDs in your wallet. But you still transact with Gold once in a while when it makes sense.
        nikolay 3y ago
        So, if wires are chaeper in EUR (thanks to SEPA), than even if I want to store my wealth in USD, I need to always sell USD for EUR just to do wires?! That's crazy! It's a patchwork an a scheme, not an alternative to fiat, gold, or stocks!

treyd 3y ago

"Large" here meaning physically large in terms of bytes, it's irrespective of the amount transferred in the tx. If you have high volume in a relatively low number of transactions and are relatively good with input/output hygiene then the actual fees paid probably won't break the bank.

factorialboy 3y ago

Strawman. I never claimed Bitcoin is the only hedge. Certainly gold has it s place. Lightning network fees are negligible. So that argument doesn't hold either.

Workaccount2 3y ago
Lighting network isn't really bitcoin though. More like an optional bolt on peripheral network with it's own set of issues.
- nullc 3y ago
  It's accurate to say that lightning makes it's own tradeoffs, but it's not accurate to say it's not Bitcoin. Every lightning transaction is just a regular bitcoin transaction that could be posted to the chain at any time-- you just don't have to, because the scripting functionality has been used so that if a counterparty posts an earlier state you can effectively cancel it. The switch to deferring updates unless there is a dispute gives a massive advantage to scaling (e.g. number of tx per second possible goes up the more users there are rather than being a global constant), instantaneouness of transaction irreversability (as fast as the involved parties can make a couple round trips, vs an hour for multiple confirmations), and potentially privacy (since not every update is globally broadcast). But these benefits come at a considerable cost of requiring a degree of active monitoring so if a counterparty posts an outdated state your software can respond, along with additional software complexity, etc. For some applications the benefits are well worth the costs, for others they aren't. To say it's not bitcoin is like saying multisignature transactions aren't bitcoin. In both cases they're ways of using the existing functionality. In both cases they require some additional software and different approaches. In both cases they use functionality built into the protocol which was intended for their purposes (payment channels being a concept originally described by Satoshi, and specifically accommodated in the transaction format). And in both cases they change the tradeoff surface somewhat.

nullc 3y ago

Gold has an inferior tax treatment. Gold has considerable storage/security costs compared to Bitcoin. Gold has considerable fake risks/costs compared to Bitcoin. The supply of gold is continually inflated by mining (also true for Bitcoin though the mining rate in bitcoin decreases over time).

houseatrielah 3y ago

World gold supply inflates at 2% per year due to mining. That's an key point of the Stock2Flow model.