Market Weekly: Still Don’t Think Bitcoin is #Winning? You’re a Loser.

Gold Goats 'n Guns ^ | 14 February 2021 | Tom Luongo

[amorphous]

Links to tweets, charts, and original layout @ link above.

[cgbg]

This kinda reminds me of Tulip mania—never ends well...

https://en.wikipedia.org/wiki/Tulip_mania

The tulip is a very beautiful flower much admired by the rich and powerful...

;-)

[Dr. Sivana]

This kinda reminds me of Tulip mania—never ends well...

There could be a collapse, but it is not the same as tulips, because you can easily make more tulips. There are a finite number of bitcoins.

[babble-on]

The problem with bitcoin is that it’s closely held. A small number of people own a large percentage of it, and have a cartel-like interest in not selling. Since its value is entirely theoretical, they “paint the tape” and draw in suckers.

[babble-on]

Tulips have some intrinsic value as “pretty things,” Bitcoin has none.

[cuban leaf]

There could be a collapse, but it is not the same as tulips, because you can easily make more tulips. There are a finite number of bitcoins.

---

Valid point. But tulips have inherent value beyond their investment value. Bitcoin doesn’t. Like government backed fiat money, it gets its value from faith. At least government backed fiat money is backed by guns and armies.

Don’t get me wrong. I think that we live in a pretty crazy world, so anything’s possible. Sure, bitcoin will collapse, but it could take years. And it only survives right now because governments let it. They could shut it down overnight if they chose to.

[Dr. Sivana]

Tulips have some intrinsic value as “pretty things,” Bitcoin has none.

Agreed, and just one other reason not to like the analogy. Photos of Benjamin Franklin don't have much intrinsic value, but enough people agree to their value that it doesn't matter (yet) that it is no longer backed by gold.

[Dr. Sivana]

Sure, bitcoin will collapse, but it could take years.

Yes. After all, it has already thrived for years because it got critical mass, and has generated many imitators, a sure sign of success.

I am not even a loser, as I don't have enough investment resources for bitcoin. I am a mere sideline observer. I also don't pretend to completely understand bit-chain technology.

[Regulator]

" At least government backed fiat money is backed by your taxes"

The establishment of the Reserve Bank and the Income Tax in the same year was not an accident.

One collateralizes the other.

[G Larry]

With the Biden requirement to report Bitcoin transactions, it's become an unnecessary target on your back.

So, I won't invest in it for the same reasons I don't buy Full Auto weapons or suppressors requiring a Federal Class III license.

I have other options, just as effective in practice, that don't raise my profile.

[CheneyClone]

Kind of like carbon credits?

[freedumb2003]

I understand the overall theory of BC: A sells $1 worth of product X. B buys $1 of that product. Rather than B sending A 1$, A says it will accept Bitcoin. B puts $1 into Bitcoin and A takes $1 out.

The rest eludes me. I think it is b/c I have never been able to “get” how currency exchange values work.

As to the technology, I understand the theory of blockchain but even after reading multiple write ups the mechanics make no sense to me.

[cgbg]

You should make it clear that those photos of Franklin have been declared legal tender—which means that if you refuse to take them in payment you could go to jail....

In theory, .gov could make _anything legal tender, including tulips, bit coins, or covid masks. :-)

[MCF]

How will it work if some governments begin seizing control of the internet?

[Alberta's Child]

There are a finite number of bitcoins.

What guarantee do you have of that?

A currency that is completely detached from a legal authority is fraught with all kinds of risk.

[amorphous]

Completely different. Cryptocurrency is a new form of “high tech” money. More related to printed money, when printed money was actually tied to something of value, like gold and silver. Tulips are assets like beenie babies, etc., not even a different kind of wampum, like seashells, beads, etc. Most crypto, like BTC, is tied to a “proof of work”, instead of being tied to another asset like gold. Though it could be, but then you’d need third party trust.

[cgbg]

I don’t do well with “third party trust”.

I assume everyone is a crook until I have overwhelming evidence to the contrary. :-)

[Dr. Sivana]

What guarantee do you have of that?

I am no expert on Bitcoin, but I understand enough of it that the design does not allow for new generation, and also that its open nature makes it impossible to sneak new ones in.

There is plenty of risk in government currencies as well. We saw hints of serious inflation in the '70s, and it could return. Everything from British Pounds to German Papiermarks to Zimababwe dollars have all seen serious devaulations.

[amorphous]

I’m like that. Sometimes you have no choice. Such as with CB currencies/notes.

[revetment]

On vacation 2 yrs ago in KY, Mammoth Cave National Park we were surprised that they (rangers) would not accept cash for park fees & the cave tour. Credit card/check only. No cash accepted by the Park Service. The vendors in the gift shop restaurant would.