[grania]

Thanks for that explanation of "blockchain" which is as clear as possible, considering the topic. I did some quick research about "what is blockchain" and wow. This is already huge for transactions. It is keeping lots of stuff out of federal and global banking scrutiny, regulation, and taxation.

What happens when the gov and the "invisible hand" finds a way to bring it down? Will it have a doomsday impact on the global banking fake-money system? And, oh yeah, is there a way to do some short-term investing in companies that are making profits from blockchain platforms?

[palmer]

The usual "invisible hand" will inevitably bring it down. That will be by someone inventing something much better. The deep state won't bring it down, preferring to use it and control it to the extent they can.

The only remaining issue is what happens in the short run in terms of overt regulation and taxation. I think it's too small for the authorities to care about and once it gets larger the providers will figure out ways for people to voluntarily give up tax information. For those that don't it will be like the cash economy which will always be there but gets the heavy hand treatment when the government feels like it.

There won't be a doomsday impact on fiat any more than gold has an impact. The issue is fiat getting diluted by the government and the government manipulating gold to the extent they can to hide the fact of dilution. While bitcoin can't be as easily manipulated, it may be manipulated upwards already for all we know. In that case it can easily be manipulated downward.

The short term investments are probably all private, but short term speculation is possible in ICOs where someone invents a new, absolutely worthless bitcoin alternative, ties it to a service, and pretends it's worth something. I have not looked at that market, but it's on the list of things to do. But it is 100% speculation.

Perhaps the best way to invest in the blockchain is to consider it to be a new internet bubble and get in on some momo stocks. They will be ridiculously overpriced. There will be articles on how overpriced they are. Then buy them as other people short them. Late 90's, all over again.

[taxcontrol]

At the heart of the issue is the difference between commodity and currency.

Paper currency is not much different than digital currency. Paper currency has little value in of itself. Paper plus ink ain’t worth much. I doubt anyone would argue that $100 bill is worth $100 in paper and or ink. However, as a society, it is easier to use currency than carting around gold coins.

Digital or electronic currency was the next step. Enter Visa and debit accounts. For a long time, the currency transaction means was conducted through checks. Now it is more done by debit cards because it is more convenient. The next step in that evolution is crypto currency.

Thus enters bitcoin and litecoin, and dash and a dozen others.