e-money is just a newer form of fiat, with all its problems.
Bitcoin is a bizarre virtual hard currency. It doesn’t have fiat’s problems, but does have its own different set.
I think the future for smart people is holding wealth in other assets, real assets, and using either of the above, or anything else, for discrete transactions as needed.
DRUD
November 4, 2015 10:47 am
Bitcoin does indeed have its own set of issues–it is more technically complicated to use, relies entirely on internet and worse, the vast majority already is owned by only a handful of people. It aslo has some truly great aspects. It is not centrally controlled (the article makes this sound as a detriment, or course) and most importantly there can NEVER be more than 22 million of them in existence and it is nearly infinitely divisible. The result, if it were to ever be in widespread use, would be a DEFLATIONARY effect…the good kind. A deflationary currency (like the US had between 1865 and 1913) rewards SAVERS. What a freaking concept! Imagine that if you saved your money you could count on it being worth MORE in the future. No more relying on “investment” (you know paying huge amounts of fees for the privilege of gambling in a rigged casino) to build a nestegg. One could simply put a little aside from each paycheck and over time it would be a lot–and interest rates going to zero and stock market collapses would have no effect.
DRUD
November 4, 2015 10:55 am
Another point I wanted to make about e-money…remember when (way back in the dark ages of the 80s and 90s) we first began to make the slow transition to mostly e-money? It was a slow process because people needed to gain confidence that the money was really there (wherever “there” is). In other words, people needed convincing that a dollar bill was completely interchangeable with and of exact equivalent value with a digit on a computer screen (fungible).
Over the past couple of decades we have become fully convinced of this…and yet is clearly not true. Just ask the Greeks. Their e-money is still fully intact, but they can only withdraw so much at a time in cash…does this sound fungible to you? Same thing here…did you see the video of the guy who tried to pay his mortgage in cash and the payment was refused.
card802
November 4, 2015 11:05 am
“Bitcoin is enjoying one of its best rallies in years.
The digital currency, which has registered a series of records over the past several days, marked a fresh high Wednesday, when it surpassed $490 for the first time since September 2014, according to data from Coindesk, a bitcoin price index.”
The fault I see here is we are still valuing everything against a fiat. How many Rubles or Argentine Peso’s would that be?
4,689 Pesos and 30,813 Roubles
Fiatman60
November 4, 2015 12:16 pm
Emoney – Bitcoin – Same thing, both fiat. Just promises backed by nothing. All it takes is one good Carrington Event and both are rendered useless. Those who espouse the virtues of Bitcoin, forget that the government WILL find a way to get their tentacles of control into it when it becomes mainstream. You can count on it.
Don’t get me wrong…… I use emoney exclusively everyday, (plastic) just like everyone else, however I also have cash on hand, should the power go out, or the banks declare a seven day holiday, or any other catastrophe the elites might dream up.
Just like the stock market saying goes….. keep your portfolio diversified……. same goes for finances.
OutLookingIn
November 4, 2015 2:10 pm
Physical fiat notes (cash) and physical gold or silver –
TELL NO TALES AND LEAVE NO TRAILS. PERIOD.
All the rest are nothing but promises.
Stephanie Shepard
November 4, 2015 4:27 pm
Ah, Drud you’re misinformed.
The most there will ever be “mined” is 21 million Bitcoins. The last Bitcoin won’t be mined until 2140 by today’s growth estimates. Currently there are roughly 14 million mined. So not all of the Bitcoins have been created.
On of the largest holders of Bitcoin is the Winklevoss Twins who own roughly 1% of the currently mined Bitcoins (rough estimate is 140,000 full Bitcoins). They won’t be selling at all. They’ve recently launched their Gemini exchange last month (set up as a trust company and 100% compliant withe regulators).
It is irrelevant who owns the full Bitcoins. Bitcoins is a decimal currency and can be divided into 8 (1.00000000) decimals. Once all the Bitcoins are mined they can always increase the decimals. A Sotashi bit (lowest Bitcoin denomination) is 0.00000001.
How many people own
Administrator
Author
November 4, 2015 6:33 pm
After Topping $500, Bitcoin Is (Again) Plunging On Extreme Volume
Submitted by Tyler Durden on 11/04/2015 18:15 -0500
It appears a double in a week has prompted – just as we saw yesterday – some more profit-taking in Bitcoin as after topping $500 earlier today, the virtual currency has plunged (considerably more than yesterday) to $368 in late US trading as a high volume selling program was unleashed on the virtual currency.
As we noted during yesterday’s plunge,
To be sure, there is nothing wrong with profit taking after such a parabolic move, however we were under the impression that the kind of furious block selling – which is intended to take out the entire bid stack and reprice an asset to a lower baseline – was reserved solely for gold, courtesy of the BIS.
It appears Virtu, or the NY Fed, may have finally noticed the dramatic surge in this alternative currency. What happens next will be up to the influx of new Chinese buyers who as we predicted two month ago when BTC was $230, have nearly doubled the value of bitcoin in two months in order to bypass China’s tightened capital controls.
* * *
However, someting else caught our eye.
While the recent rise (and rapid acceleration) in Bitcoin prices have become more mainstream since we suggested Chinese capital-control-fleeing money may find the virtual currency a useful conduit, something odd has been going on in fiat currency alternatives…
Before The Fed stopped its direct money-printing in October 2014, gold and bitcoin were highly correlated, perhaps rightfully reflecting the ebbs and flows of the USD’s reserve currency strength (or weakness) as well as various crisis moments. However, as the chart below shows, since the end of QE3, the correlation regime between gold and the virtual currency has entirely flipped – most notably in the last week or two…
Of course, these gold ‘prices’ merely reflect the machinations of various paper-promise-trading manipulators amid surging physical demand, but still, we noticed one interesting point of inflection.
Since the end of QE3, the relative price of gold has surged relative to bitcoin and now roundtripped to pre-QE3 levels…
Is this another switching moment as alternative currency seekers rotate back to a ‘relatively’ cheap gold? Or is something else going on here?
* * *
With this kind of volatility, we are curious how long before a new generation of traders, the same who are currently watching paint dry in equities and FX courtesy of a seemingly endless short squeeze, migrate to this asset class which suddenly is boasting the best volatility on the planet, if only for the time being.
Stephanie Shepard
November 4, 2015 8:37 pm
“Is this another switching moment as alternative currency seekers rotate back to a ‘relatively’ cheap gold? Or is something else going on here?”
My thoughts are of Bitcoin pushing forward. A lot has happened since the 2013 surge. It is easier to buy and use Bitcoin. It is easier to trade it into other cryptocurrencies (Litecoin, Dogecoin etc.) on Shapeshift. More companies accept it as payment (Overstock). And $1 Billion has been invested into Bitcoin infrastructure.
We are getting close to Bitcoin’s Flywheel effect. I am hoping this is the surge that does it.
I still think there is more road to go until mass adoption. The biggest problem I see for Bitcoin ishow it is tethered to fiat money. I don’t think the flywheel effect can take effect until Bitcoin holders can make all their daily transactions in Bitcoin.
DRUD
November 5, 2015 11:04 am
Steph, I thought it was 22 million, but the number is irrelevant. The concept of an absolute fixed number is key. I did mention that they are nearly infinitely divisible and this combination makes them deflationary. And, yes, those are very good things.
The issue with currencies is always confidence, which implies wide acceptance. Perhaps, when millennials are in middle age and have more wealth and more seats of power, Bitcoin would take off.
I do not think that this will happen before (or during) the coming Fourth Turning crisis. No one knows what the consequences of it will be, but I can guarantee the world will look radically different 20 years from now. The question becomes will Bitcoin still exist then? Hell, will the internet? A great big IDK from all.
Sweden trying to outlaw the use of cash: https://mises.org/blog/sweden-cash-becoming-radioactive
e-money is just a newer form of fiat, with all its problems.
Bitcoin is a bizarre virtual hard currency. It doesn’t have fiat’s problems, but does have its own different set.
I think the future for smart people is holding wealth in other assets, real assets, and using either of the above, or anything else, for discrete transactions as needed.
Bitcoin does indeed have its own set of issues–it is more technically complicated to use, relies entirely on internet and worse, the vast majority already is owned by only a handful of people. It aslo has some truly great aspects. It is not centrally controlled (the article makes this sound as a detriment, or course) and most importantly there can NEVER be more than 22 million of them in existence and it is nearly infinitely divisible. The result, if it were to ever be in widespread use, would be a DEFLATIONARY effect…the good kind. A deflationary currency (like the US had between 1865 and 1913) rewards SAVERS. What a freaking concept! Imagine that if you saved your money you could count on it being worth MORE in the future. No more relying on “investment” (you know paying huge amounts of fees for the privilege of gambling in a rigged casino) to build a nestegg. One could simply put a little aside from each paycheck and over time it would be a lot–and interest rates going to zero and stock market collapses would have no effect.
Another point I wanted to make about e-money…remember when (way back in the dark ages of the 80s and 90s) we first began to make the slow transition to mostly e-money? It was a slow process because people needed to gain confidence that the money was really there (wherever “there” is). In other words, people needed convincing that a dollar bill was completely interchangeable with and of exact equivalent value with a digit on a computer screen (fungible).
Over the past couple of decades we have become fully convinced of this…and yet is clearly not true. Just ask the Greeks. Their e-money is still fully intact, but they can only withdraw so much at a time in cash…does this sound fungible to you? Same thing here…did you see the video of the guy who tried to pay his mortgage in cash and the payment was refused.
“Bitcoin is enjoying one of its best rallies in years.
The digital currency, which has registered a series of records over the past several days, marked a fresh high Wednesday, when it surpassed $490 for the first time since September 2014, according to data from Coindesk, a bitcoin price index.”
The fault I see here is we are still valuing everything against a fiat. How many Rubles or Argentine Peso’s would that be?
4,689 Pesos and 30,813 Roubles
Emoney – Bitcoin – Same thing, both fiat. Just promises backed by nothing. All it takes is one good Carrington Event and both are rendered useless. Those who espouse the virtues of Bitcoin, forget that the government WILL find a way to get their tentacles of control into it when it becomes mainstream. You can count on it.
Don’t get me wrong…… I use emoney exclusively everyday, (plastic) just like everyone else, however I also have cash on hand, should the power go out, or the banks declare a seven day holiday, or any other catastrophe the elites might dream up.
Just like the stock market saying goes….. keep your portfolio diversified……. same goes for finances.
Physical fiat notes (cash) and physical gold or silver –
TELL NO TALES AND LEAVE NO TRAILS. PERIOD.
All the rest are nothing but promises.
Ah, Drud you’re misinformed.
The most there will ever be “mined” is 21 million Bitcoins. The last Bitcoin won’t be mined until 2140 by today’s growth estimates. Currently there are roughly 14 million mined. So not all of the Bitcoins have been created.
On of the largest holders of Bitcoin is the Winklevoss Twins who own roughly 1% of the currently mined Bitcoins (rough estimate is 140,000 full Bitcoins). They won’t be selling at all. They’ve recently launched their Gemini exchange last month (set up as a trust company and 100% compliant withe regulators).
It is irrelevant who owns the full Bitcoins. Bitcoins is a decimal currency and can be divided into 8 (1.00000000) decimals. Once all the Bitcoins are mined they can always increase the decimals. A Sotashi bit (lowest Bitcoin denomination) is 0.00000001.
How many people own
After Topping $500, Bitcoin Is (Again) Plunging On Extreme Volume
Submitted by Tyler Durden on 11/04/2015 18:15 -0500
It appears a double in a week has prompted – just as we saw yesterday – some more profit-taking in Bitcoin as after topping $500 earlier today, the virtual currency has plunged (considerably more than yesterday) to $368 in late US trading as a high volume selling program was unleashed on the virtual currency.
As we noted during yesterday’s plunge,
To be sure, there is nothing wrong with profit taking after such a parabolic move, however we were under the impression that the kind of furious block selling – which is intended to take out the entire bid stack and reprice an asset to a lower baseline – was reserved solely for gold, courtesy of the BIS.
It appears Virtu, or the NY Fed, may have finally noticed the dramatic surge in this alternative currency. What happens next will be up to the influx of new Chinese buyers who as we predicted two month ago when BTC was $230, have nearly doubled the value of bitcoin in two months in order to bypass China’s tightened capital controls.
* * *
However, someting else caught our eye.
While the recent rise (and rapid acceleration) in Bitcoin prices have become more mainstream since we suggested Chinese capital-control-fleeing money may find the virtual currency a useful conduit, something odd has been going on in fiat currency alternatives…
Before The Fed stopped its direct money-printing in October 2014, gold and bitcoin were highly correlated, perhaps rightfully reflecting the ebbs and flows of the USD’s reserve currency strength (or weakness) as well as various crisis moments. However, as the chart below shows, since the end of QE3, the correlation regime between gold and the virtual currency has entirely flipped – most notably in the last week or two…
Of course, these gold ‘prices’ merely reflect the machinations of various paper-promise-trading manipulators amid surging physical demand, but still, we noticed one interesting point of inflection.
Since the end of QE3, the relative price of gold has surged relative to bitcoin and now roundtripped to pre-QE3 levels…
Is this another switching moment as alternative currency seekers rotate back to a ‘relatively’ cheap gold? Or is something else going on here?
* * *
With this kind of volatility, we are curious how long before a new generation of traders, the same who are currently watching paint dry in equities and FX courtesy of a seemingly endless short squeeze, migrate to this asset class which suddenly is boasting the best volatility on the planet, if only for the time being.
“Is this another switching moment as alternative currency seekers rotate back to a ‘relatively’ cheap gold? Or is something else going on here?”
My thoughts are of Bitcoin pushing forward. A lot has happened since the 2013 surge. It is easier to buy and use Bitcoin. It is easier to trade it into other cryptocurrencies (Litecoin, Dogecoin etc.) on Shapeshift. More companies accept it as payment (Overstock). And $1 Billion has been invested into Bitcoin infrastructure.
We are getting close to Bitcoin’s Flywheel effect. I am hoping this is the surge that does it.
I still think there is more road to go until mass adoption. The biggest problem I see for Bitcoin ishow it is tethered to fiat money. I don’t think the flywheel effect can take effect until Bitcoin holders can make all their daily transactions in Bitcoin.
Steph, I thought it was 22 million, but the number is irrelevant. The concept of an absolute fixed number is key. I did mention that they are nearly infinitely divisible and this combination makes them deflationary. And, yes, those are very good things.
The issue with currencies is always confidence, which implies wide acceptance. Perhaps, when millennials are in middle age and have more wealth and more seats of power, Bitcoin would take off.
I do not think that this will happen before (or during) the coming Fourth Turning crisis. No one knows what the consequences of it will be, but I can guarantee the world will look radically different 20 years from now. The question becomes will Bitcoin still exist then? Hell, will the internet? A great big IDK from all.