Debt Rattle November 28 2017
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[See the full post at: Debt Rattle November 28 2017]Kunstler; love him or hate him; he nails this (crypto-currency) perfectly:
“My personal take on the phenomenon is that it represents the high point of techno-narcissism — the idea that technology is now so magical that it over-rides the laws of physics.” JK
The west, generally, seems to be overtaken by magical thinking; a very dangerous way to live one’s life, IMO.
And then there is this;
And at $9,600 a piece, the total value of all bitcoins – their market cap – now tops $155 billion. That gives bitcoins the equivalent of a trailing P/E ratio of 708.
If that is not insanity, then truly, I don’t know what is…The banks and energy giants that own coal must love cryptocurrencies – you’d be forgiven for thinking shadow banks in china haven’t financed these huge bitcoin mining warehouses full of computers. And given cryptos are no where near as valuable in the real world as people think they are (like shares and likes on social media) then I think bubble is gonna pop.
But not just yet. A lot of crazy people chasing yield and a lot more who like the idea of easy money.Wonder what the govt or tax office will do about them
oxymoron
Yeah; I too think the bubbles going to pop;but just when is the question.
These things seem to go to extremes; so probably pretty serious as well, no?Bitcoin becomes the playing field of the rich, who spend billions to set up mining facilities. Is that what Satoshi had in mind? Just another elite?
https://www.zerohedge.com/news/2017-11-28/meet-world%E2%80%99s-most-powerful-bitcoin-backersMaybe the environmental movement will put an end to the craze?
https://www.nakedcapitalism.com/2017/11/bitcoin-energy-pollution.htmlI don’t own bitcoin.
The rich own bitcoin.
When the bitcoin bubble breaks, how will that hurt me?Who got hurt when the tulip bubble broke?
It would be humorous were it not so tragic. Bitcoin is the only WORLD currency that’s ever existed. And it has arisen in a world that’s going to be downsized and made more local! Please don’t tell me you’re putting all your hopes on the SDR. Haven’t you had enough of criminal banking systems?
People think money should have backing. Sorry, that makes it a proxy for what is commonly viewed as barter. Money itself should be divorced entirely from tangible value because its sole kinetic function is intermediation / facilitation of trade. Bitcoin can’t be devalued, can’t be inflated, can’t be confiscated because control is permanently decentralized.
Dollars are said to be worthless — just digits in accounts and paper slips. But that’s not true. Dollars have negative value, not zero value. They’re debt instruments. Bitcoin is not a debt.
I commented yesterday that all mediums of exchange are forms of barter. That’s not precisely correct. Cryptocurrencies may indeed be the first forms of actual “money” ever devised.
Look, kids, you can have a centrally controlled money supply or you can have a money supply nobody controls. Take your pick. Millennia of central controls have brought us to our current predicaments, but you still tout that as “viable?” You’re still stuck in the Matrix. So inured to controls and controllers that you can’t handle the wild west of free markets? Like animals that spend their lives in cages, and when the door is opened, can’t bring themselves to step out into the sunshine.
What you’re witnessing here is actual free-market price discovery in an otherwise rigged world. And you’re all casting aspersions at it. P/E ratios don’t apply here. There is no bubble. Mark my words, we’re witnessing the slowly accelerating abandonment of all historical economic and political systems. Distributed ledger technologies are the future. The old systems are no match for what’s coming. See the one-minute video:
You will soon be able to trade the FX from your home computer. Well, maybe not you, but I will.Rothschilds and Rockefellers are headed for the dustbin of history. A new elite is rising. Their value systems are not predicated on dominion over mankind. “Give me control of a nation’s money and I care not who makes its laws” — Mayer Amschel Bauer Rothschild. We don’t have to kill the dinosaurs; all we have to do is abandon them. We certainly don’t want to replace them with bigger dinosaurs, do we?
Distributed ledger technologies ARE the invisible hand. The tables of the Moneychangers are being overturned once and for all. My only concern is that the rush to cryptos will eventually overwhelm the existing systems. The curve is clearly parabolic. If Venezuelans are buying Bitcoin, they’re going to be richer than you. Don’t wait ten years to finally figure this out.
In the past year, bitcoins have generated transaction fees of nearly $219 million. And at $9,600 a piece, the total value of all bitcoins – their market cap – now tops $155 billion. That gives bitcoins the equivalent of a trailing P/E ratio of 708.
Since when commodity trading fees are counted under earnings? WTF?
Diogenes, I love your enthusiasm – you are a true believer and a lot of what you are on about I agree with entirely except that until a currency goes beyond the blockchain we are screwed. If any of these ideological and altruistic solutions to the current mess (control by guys with muscle and guns – through debt) doesn’t move from the technological to the biological then what hope have we. The more I run it through my brain the more I end up with long term solutions aligned with Holmgren, Orlov, Foss/Meijer etc. In the crypto world of exchange we have the chance to move away from debt slavery but get slammed right into energy slavery and that is a game over situation – we are seeing it already with huge Chinese bitcoin mining operations running coal out of the ground and into the air faster than ever before. And if anyone tries to jump on me to explain that climate change is a non issue – then how about no more trees or waterways you can drink from. It doesn’t matter if it’s climate change! It’s environmental disaster anyway you look at it.
Good grief I’m going back to making beeswax candles and making love by an open fire!Diogenes Shrugged, what makes you think that distributed ledger technology cannot be used to keep track of debt? What does it matter if you owe your bank 10,000 dollars or 1 bitcoin, whether the transaction is in bank’s books or in some distributed ledger?
And that claim that bitcoin can’t be confiscated… Well… It’s only as true as that gold can’t be confiscated – if you hide it well enough. You have records of your private keys and once those are discovered – your bitcoin is gone.olo530:
It’s certainly possible to lose your Bitcoin or altcoin in various ways, and a ZH article the other day estimated 4 million Bitcoin lost forever already. So the total BTC supply when it’s all mined out will not be 21 million, but something less than 17 million coin. (That’s 1,700,000,000,000,000 Satoshis).
You’re correct that blockchain will be used to keep track of debts, but that will merely be a function of smart contracts. Blockchain is used for currencies (Bitcoin and Litecoin, among others), but also for smart contracts (Ethereum, for instance). Bitcoin isn’t set up for smart contracts, and therefore functions exclusively as a currency. Of course, a lot of people have been buying Bitcoin with bank credit, but that has nothing to do with Bitcoin.
Confiscation is simply impossible unless you’re careless with your private key(s). There are several highly secure software wallets available, several highly secure hardware wallets (e.g. Trezor), and a paper wallet properly hidden cannot be discovered by anybody — even you, if you forget where you put it.
Oxymoron:
There are remedies in the works for the growing electricity consumption by “mining” operations. Lightning Network, for one. Forking to a fee-based system based on proof-of-stake rather than proof-of-work, for another. It isn’t an insurmountable concern. Nassim has posted enough about AGW here, mostly unchallenged, to show that CO2 generation from BTC mining shouldn’t be a concern, either.
This doesn’t address energy consumption, but it’s important. David and Goliath.
https://www.zerohedge.com/news/2017-11-03/all-worlds-money-and-markets-one-visualizationYour activities with bees wax and open fires sound enviable, but I’m tellin’ ya, she’s gonna someday demand Bitcoin.
https://fromthetrenchesworldreport.com/life-cycle-men-women/212655I really wish everybody here would spend their evenings all next month investigating and learning, if for no other reason than to become conversant. Some say this is the biggest advance for mankind since the Internet. I personally see distributed ledgers (decentralized control) as the biggest advance for our species EVER. The technologies are also becoming more secure and easier to use, so you’ll know the transition is complete when your shoeshine boy says he only accepts Bitcoin.
There are remedies in the works for the growing electricity consumption by “mining” operations… It isn’t an insurmountable concern.
I don’t see it happening, since the main branch is selected based on mining power (or number of nodes, which is the same thing). Energy cost is the only thing keeping distributed ledgers from getting hijacked by malicious participants.
olo530:
Nodes are the computers that remain updated with the full blockchain. Most nodes aren’t involved with mining. The energy-intensive mining nodes use very expensive computers built specifically to mine cryptos. At $10,000 per BTC “earned,” their energy cost isn’t as much of an issue as the heat they generate.
I don’t know what a malicious participant could possibly do to hijack the blockchain. He’d need to control 51% of all outstanding BTC to have any affect at all, and then it would be against his interest to engage in mischief. Anybody trying to buy 51% of BTC will drive the price up dramatically along the way. I suppose it could happen, but sellers would exit rich and the buyer would be left with millions of BTC for which there would be no bid.
https://www.investopedia.com/terms/b/blockchain.asp
Again, Bitcoin might yield market share to better-designed cryptocurrencies as time goes on. When you sense that possibility, trade your BTC for one of the others. There are well over a thousand altcoins available now, mostly Initial Coin Offerings (ICO’s). A lot of those are scams, and most don’t exhibit any new or superior features. Shop wisely.
He’d need to control 51% of all outstanding BTC
You need 51% of mining power (25% in some scenarios) to double spend to your heart’s content. If you can interfere with message exchange between nodes then it’s even less.
Diogenes, thnaks for the men women life cycle – cracked me up – the comments were gold – that rooster must have had a lousy attorney So funny.
I think you may be still missing one of my points that I don’t really care about carbon so much – I got a wood fire after all, but if you think energy generation doesn’t come at some serious environmental cost you are caaa-raaayzee man.
Having said that I think you are right – the technology is here to stay and for better or for worse we are gonna get involved someway or another. So I perhaps should not have sold my Bitcoin? I dunno – got a bit of Ethereum and I have probably spent far too long looking into crypto currencies (had waves, litecoin, ripple tenx and a few others till I freaked out about my environmental credentials going out the window. I run a permaculture business and it JUST AINT COOL. Right now.
Oh and I like you so I’m not being antagonistic or judgy when I say – No one is shining my shoes except me. I’m just saying.“The Fat Cats Have Got Their Claws Into Britain’s Universities (G.)”
I follow my old college, Imperial College alumni, on LinkedIn.com
https://www.linkedin.com/groups/87488
When I went there, they were quite rigorous about science and we had lectures to explain how it works. Criticism of any hypothesis was encouraged. Now, they have some lady who is the gatekeeper to their comment section of LinkedIn. I believe she got there education elsewhere. Regularly, they publish some piece of nonsense that would have been laughable a generation ago and any critical comments are systematically deleted with no explanation.
Here is an example:
“Do you have a break-through technology or business idea to combat climate change?”
https://www.linkedin.com/groups/87488/87488-6334343250723246080
Anyone who points out that life on earth requires CO2 and that it is not a bad thing would have the message deleted.
“How Renewable Energy Can Accelerate the Microgrid Revolution”
https://www.linkedin.com/groups/87488/87488-6318831701053239302
If you point out that “Renewable Energy” is a boondoggle and explain why, your comment will be deleted.
If you really think about it, buying Bitcoin is not so crazy if you own the printing press for ordinary fiat currency. If you can produce an endless supply of fiat and buy a finite number of bitcoins, why not? It’s trading one form of ethereal money for another. A dollar is no more real than a bitcoin, but at least the world will not see more than 22 million bitcoins.
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