HP. I watched the video and about 20 minutes past the 47:40 mark and it only solidified my reasoning for avoiding Crypto currencies, Andreas and Stefan are discussing the prospects in the third world under a slew of assumptions that are unrealistic in my point of view. The block chain and security (with the building immunity analogy) seems a bit of a stretch to me. I understand where they are coming from on some level. But, in order for a currency to survive, it MUST be fungible. The funny thing is that Andreas mentioned that word. But, he has no idea what it means. Also, I had to stop when Stefen said he is hedging against the fiat with Bitcoin..even more so than gold. At least you value the Precious metals more. From what I understand of you, this is an experiment. And there's nothing wrong with playing in that market to make a little money if you can afford the risk. But, many will get burned by it and as more businesses accept bitcoin, when it crashes again, there will be lots of upset people. Great video though. I respect your opinions and appreciate your commentary on the subject.
Salivate, you are certainly correct - it is an experiment with me. But I would suspect that it is an experiment for almost everyone as it is a brand new technology and in the new and experimental phase of adoption. I like bitcoin more for the philosophical reasons than anything else. To use a currency outside the banker's system, to give everyone globally an equal playing field without the government intervention and theft through dilution (inflation), etc. I understand the trepidation or hesitancy of the stacking community, of course, as we value hard assets, but bitcoin (or another future crypto currency) MIGHT be revolutionary, and I don't mind being a very small part of that.
The primary objection to Bitcoin is the counter-party risk it represents and the power it has to lure people into thinking of money as being digital in nature. In my view, it's not entirely different from paper fiat money, which has been a complete disaster. In addition, I don't think that there is any way for us to know, at this point, who or what is behind Bitcoin and what its ultimate purpose and ramifications will be. Until there is more information and genuine knowledge, I think people would be better served to approach Bitcoin with extreme skepticism and trepidation. People are much better off gaining an understanding of real money and accumulating it for their own benefit and that of their family & friends.
Good comment, and I understand the hesitations. The thing is counter party risk is everywhere. Now holding physical gold and silver are the best hedge against counter party risk, but of course the government can outlaw or attempt confiscation (hence counter party risk of that asset class). Second, most of your fiat dollars are represented as digital in nature and exist as 1's and 0's on computers. Not much different than a crypto. The reason bitcoin is different is because it isn't government controlled, and it is decentralized. Therefore, in a way, the counter party risk is less than holding fiat dollars. Of course I wouldn't put all my wealth into bitcoin but I think it is worth further examination and perhaps a small portion of one's chosen portfolio.
Cryptocurrencies to me really are a scary prospect. It was bad enough leaving gold and silver and moving over to paper money.....what if governments decided cryptocurrencies were the new best thing and left paper money for it!? At least i can physically hold paper money and store it where i see fit, without the governments knowing exactly how much i've got and where it is! If cryptocurrencies succeed and governments adopt a version of it as the new currency.....were in deep deep crap for so many reasons!
If a government adopts a cryptocurrency that doesn't mean I have to use it on a daily basis if competitors like bitcoin are out there. I'd only have to pay my taxes with this new government crypto, nothing more. Holding government paper money over the long term is a bad proposition due to inflation. The amount of bitcoins are set, and if anything it will be a deflationary currency.
The idea of crypto currency as a means of exchange is a lofty goal and works in theory but if you want some grounded arguments I'll offer a couple: Exchanges between currencies always encounter a tax. If you're paying 3 cents to change your dollar into bitcoin and back again that is constantly eating away at your capital with every transaction the same way credit card fees do, for example, yet without any value added by using bitcoin which leads me to point two. All currencies eventually become commodities. People will hold, trade and sell currency in addition to using it as a vehicle for trade. In this case holding bitcoins for any amount of time is a risky proposition. The possibility of bitcoin going to zero overnight is dramatically higher than the Dollar going to zero. If you take an ebay purchase as an example you would be forced to hold your bitcoin in escrow for an average of 1-2 weeks before the whole transaction is complete. The chance of you losing value in that time is substantial. Stability: Bitcoin is akin to penny stocks in terms of volatility. There is far too much zealotry surrounding crypto currencies to make them a viable method of exchange. The usage of bitcoin is in the fringes now but if widely adopted a 'bank run' on bitcoins would be disastrous. At the end of the day you have to earnestly ask yourself what financial value does bitcoin provide over existing mediums of exchange? Does this value outweigh the potential downside risk? I believe for the general population the answer to this question is an emphatic 'no.'
A bank run on bitcoin would not be disastrous. Bitcoin isn't beholden to fractional reserve lending. Therefore if I want to withdraw my bitcoin from Coinbase - at the same time as many other users - they can transfer the bitcoins I own (under their exchange) from their cold storage to their online exchange and disburse the proceeds to me. No issue. "The possibility of bitcoin going to zero overnight is dramatically higher than the Dollar going to zero." I disagree. The dollar already has gone to zero (ok, near zero) when measured long term from the adoption of the FED in 1913. Dollar has lost 96% of its value. And this from an institution that was created to help maintain the value of the dollar. The dollar will go to zero eventually, bitcoin may or may not. But when the dollar does go to zero, and all the gold and silver has been scooped up, what other currency might people clamor for that isn't government controlled and is anti-inflationary? BTC perhaps?
You are operating on the presumption that bitcoins are 'banked' which implies that they have some existential backing. The fact is that the value of a bitcoin is only what another individual is willing to pay for said bitcoin. Ergo for every bitcoin seller there must be a bitcoin buyer. Sound familiar? This is the same way the stock market operates. If nobody is willing to buy (or exchange goods for) the bitcoins you want to sell you have the explicit definition of a crash. This perpetuates itself as every bitcoin holder realizes the devaluation and there are all sellers and no buyers. This can very realistically result in zero valuation in a short period of time. Sure the dollar has suffered devaluation due to inflation over the past century as has every currency. The rapid valuation of bitcoin in the past two years should make anyone suspicious of it's intrinsic real value. As a PM investor you yourself have seen gold and silver rise and fall in equal dramatic fashion over the past 3 years. How is bitcoin somehow immune to rapid devaluation when it has arguably no intrinsic value compared to PMs?
Paul Maritz It absolutely is the same of gold and silver, along with every other commodity. I find it interesting that the same people who chanted 'if you don't hold it you don't own it' when comparing PMs to paper stocks could swing 180 degrees when it comes to bitcoin.
"All money is a matter of belief", like you infer. Money has a subjective value, just like goods have a subjective value. The uses of gold & silver go way beyond their use as a medium of exchange. In particular for silver, it's real world uses almost guarantees it's store of value. Other money like fiat & crypto do not have a very good store of value. You could measure silver's store of value in relation to the energy/work it took to acquire it. I watch the oil:silver ratio which is 4:1 as an avg. Crypto is easy money, the work to acquire it, the barrier of entry for new crypto being low, tells me we have not discovered the real value of BTC yet. The free market will determine that and we will have some winners and losers playing that game.
Paul Maritz You are presenting crypto as a flawless system impervious to any fraud. If the NSA can crack 256 bit encryption how can you claim there will never be any corruption in the protocol in the future? On the extremely rare occurrence of fraud in securities exchange there are regulatory agencies enforcing the rules and ultimately a company behind the stock which can make the shareholder whole again. When crypto gets hacked there is zero backing. You can fill up your thumbdrive with all the private keys you want. When the system becomes suspect due to security breach and no other party will accept bitcoins because of the current risk all of your beloved currency is worth zero. You are right crypt does not carry the same risk as paper stocks, it carries a FAR greater fundamental risk.
I agree with you that bitcoin has greater convenience than gold & silver as a medium of exchange, but isn't that what fiat does very well anyway? we have banknotes, coins, credit cards, debit cards, paypal, cheques, bank wire, millions of ATMs, the list goes on. society functions just fine without having to convert fiat into bitcoin first, and even though businesses accept BTC, they could very well convert it straight back into fiat anyway. (i'm yet to see a company announce company profits in number of BTC by the way.) the only advantage I see with BTC over the current methods of exchange is with international transfers. banks charge exorbitant fees for international bank transfers, but if my relatives overseas want to send me money, they could do so via bitcoin and we'd save transaction costs compared to doing it through the bank. for store of value which can't be inflated away, gold still wins hands down. Why are central banks buying gold and not BTC? because gold is MONEY, has been and still is despite what they tell you.
A well thought out comment there, with some great points. If I were a central bank, I would be buying gold as well - it is the proven store of value indeed. The primary reason I like bitcoin over fiat as a means of exchange is that it is a vote of "no confidence" in the fiat dollar system. Anything that gives the evil bankers less power and is just as easy (or easier) and just as cheap (or even saves me money) - why not do it? Why use their FRN's when I can use BTC? Investors of BTC, entrepreneurs, and liberty minded folk win when I use BTC. Who wins when I use fiat? Elite bankers. I know some companies do hold BTC and don't immediately convert it back to dollars - overstock does at least some of this according to the CEO.
To speak to the title of your video, if bitcoin were ever to become established there is nothing to stop JP Morgan from buying up all of the bitcoins. Contrary to popular belief banks would love this because they would have unregulated capital control over the market. Quite the opposite of crashing the banks, this would return us to the grand ole days of the robber barons.
The central banks already have unregulated capital control over entire countries. The only way JP Morgan could buy up all the bitcoin is if the holders were willing to sell them all (unlikely). Currently, JPM can naked short many different markets including gold and silver. So while the CFTC "regulates" the markets - do they really, when JPM can basically do whatever they want? Free markets don't currently exist - except perhaps in bitcoin.
Heavenly Prepper While current regulations are far from perfect we are undeniably much, much better off than the previous turn of the century. Large banks have leverage in markets but by no means overshadow them. 2008 proved that as well as identifying how far the US government will go to back (prop up) the system, something that would never happen with unregulated bitcoin. Free markets exist everywhere, what you are implying is that there is a need for markets where every individual has equal weight. This has never, and will never exist an any society that engages in trade. Betting that people's value of anti-establishment crypto currency would outweigh self interest and greed is a fool's folly. I guarantee you the most die hard bitcoin supporter will sell his entire holdings if the price is right and he will in turn find some rational to justify his decision to do so to others.
bitcoin isnt for me man. honestly, when i rant against it I get all these people telling me to "do some research" To me, this is the second coming of bitcoin. I watched it and followed it years ago when it was liuke 13 bucks and when it was like 17 cents. it looked like a fad back then and it still does. back then what really turned me off was silk road. research into silk road led me to bitcoin i think. today what turns me off is all the "facts" about bitcoin that are just plain wrong. Fact 1: there is a limited amount.....that can be divided infinitely? Fact 2: its unhackable, untrackable......really, its just sad that people think that. Fact 3: bitcoin for the freeman! Stick it to the man!...The man sticks us and no amount of ones and zeros in a digital wallett will help, see fact 2. and im sorry HP but I have to ask, you mentioned about a collapse to barter situation trying to trade silver accross states. In a collapse to barter system how likely is it that you will find it easier to log on and send to bitcoin to the farmer with the corn? As a high risk investment I think crypto currencies are the cats pajamas! but I dont do high risk. I buy gold and silver because its mor fun than a bank account and honestly i get better intrest on my savings hahahaha ;) PS. I cant believe 11 people thumbed down this vid hahaha I thumbed up ;)
Oh, Heck no! Its like i said on another youtubers vid a while back, congrats to the people who can and do make money off of it. more power to them. its really just not for me. Im sure i would have a much different opinion if I had bought back when it was pennies, but back then there were rumours that the CSA had bought up all the bitcoins at that point. im not a drug dealer or anything but i figured they were working to destroy it. Now a days i stick with more conventional investments and shy away from the shadowy stuff.
HP. I watched the video and about 20 minutes past the 47:40 mark and it only solidified my reasoning for avoiding Crypto currencies, Andreas and Stefan are discussing the prospects in the third world under a slew of assumptions that are unrealistic in my point of view. The block chain and security (with the building immunity analogy) seems a bit of a stretch to me. I understand where they are coming from on some level. But, in order for a currency to survive, it MUST be fungible. The funny thing is that Andreas mentioned that word. But, he has no idea what it means. Also, I had to stop when Stefen said he is hedging against the fiat with Bitcoin..even more so than gold. At least you value the Precious metals more. From what I understand of you, this is an experiment. And there's nothing wrong with playing in that market to make a little money if you can afford the risk. But, many will get burned by it and as more businesses accept bitcoin, when it crashes again, there will be lots of upset people. Great video though. I respect your opinions and appreciate your commentary on the subject.
Salivate, you are certainly correct - it is an experiment with me. But I would suspect that it is an experiment for almost everyone as it is a brand new technology and in the new and experimental phase of adoption. I like bitcoin more for the philosophical reasons than anything else. To use a currency outside the banker's system, to give everyone globally an equal playing field without the government intervention and theft through dilution (inflation), etc. I understand the trepidation or hesitancy of the stacking community, of course, as we value hard assets, but bitcoin (or another future crypto currency) MIGHT be revolutionary, and I don't mind being a very small part of that.
The primary objection to Bitcoin is the counter-party risk it represents and the power it has to lure people into thinking of money as being digital in nature. In my view, it's not entirely different from paper fiat money, which has been a complete disaster. In addition, I don't think that there is any way for us to know, at this point, who or what is behind Bitcoin and what its ultimate purpose and ramifications will be. Until there is more information and genuine knowledge, I think people would be better served to approach Bitcoin with extreme skepticism and trepidation. People are much better off gaining an understanding of real money and accumulating it for their own benefit and that of their family & friends.
Good comment, and I understand the hesitations. The thing is counter party risk is everywhere. Now holding physical gold and silver are the best hedge against counter party risk, but of course the government can outlaw or attempt confiscation (hence counter party risk of that asset class). Second, most of your fiat dollars are represented as digital in nature and exist as 1's and 0's on computers. Not much different than a crypto. The reason bitcoin is different is because it isn't government controlled, and it is decentralized. Therefore, in a way, the counter party risk is less than holding fiat dollars. Of course I wouldn't put all my wealth into bitcoin but I think it is worth further examination and perhaps a small portion of one's chosen portfolio.
im not a bitcoin hater, but I wouldn't invest in it myself, i just dont have the stomach for it.
but if others want to buy it, thats there prerogative
Cryptocurrencies to me really are a scary prospect. It was bad enough leaving gold and silver and moving over to paper money.....what if governments decided cryptocurrencies were the new best thing and left paper money for it!? At least i can physically hold paper money and store it where i see fit, without the governments knowing exactly how much i've got and where it is! If cryptocurrencies succeed and governments adopt a version of it as the new currency.....were in deep deep crap for so many reasons!
If a government adopts a cryptocurrency that doesn't mean I have to use it on a daily basis if competitors like bitcoin are out there. I'd only have to pay my taxes with this new government crypto, nothing more. Holding government paper money over the long term is a bad proposition due to inflation. The amount of bitcoins are set, and if anything it will be a deflationary currency.
The idea of crypto currency as a means of exchange is a lofty goal and works in theory but if you want some grounded arguments I'll offer a couple:
Exchanges between currencies always encounter a tax. If you're paying 3 cents to change your dollar into bitcoin and back again that is constantly eating away at your capital with every transaction the same way credit card fees do, for example, yet without any value added by using bitcoin which leads me to point two.
All currencies eventually become commodities. People will hold, trade and sell currency in addition to using it as a vehicle for trade. In this case holding bitcoins for any amount of time is a risky proposition. The possibility of bitcoin going to zero overnight is dramatically higher than the Dollar going to zero. If you take an ebay purchase as an example you would be forced to hold your bitcoin in escrow for an average of 1-2 weeks before the whole transaction is complete. The chance of you losing value in that time is substantial.
Stability: Bitcoin is akin to penny stocks in terms of volatility. There is far too much zealotry surrounding crypto currencies to make them a viable method of exchange. The usage of bitcoin is in the fringes now but if widely adopted a 'bank run' on bitcoins would be disastrous.
At the end of the day you have to earnestly ask yourself what financial value does bitcoin provide over existing mediums of exchange? Does this value outweigh the potential downside risk? I believe for the general population the answer to this question is an emphatic 'no.'
A bank run on bitcoin would not be disastrous. Bitcoin isn't beholden to fractional reserve lending. Therefore if I want to withdraw my bitcoin from Coinbase - at the same time as many other users - they can transfer the bitcoins I own (under their exchange) from their cold storage to their online exchange and disburse the proceeds to me. No issue.
"The possibility of bitcoin going to zero overnight is dramatically higher than the Dollar going to zero." I disagree. The dollar already has gone to zero (ok, near zero) when measured long term from the adoption of the FED in 1913. Dollar has lost 96% of its value. And this from an institution that was created to help maintain the value of the dollar. The dollar will go to zero eventually, bitcoin may or may not. But when the dollar does go to zero, and all the gold and silver has been scooped up, what other currency might people clamor for that isn't government controlled and is anti-inflationary? BTC perhaps?
You are operating on the presumption that bitcoins are 'banked' which implies that they have some existential backing. The fact is that the value of a bitcoin is only what another individual is willing to pay for said bitcoin. Ergo for every bitcoin seller there must be a bitcoin buyer. Sound familiar? This is the same way the stock market operates. If nobody is willing to buy (or exchange goods for) the bitcoins you want to sell you have the explicit definition of a crash. This perpetuates itself as every bitcoin holder realizes the devaluation and there are all sellers and no buyers. This can very realistically result in zero valuation in a short period of time.
Sure the dollar has suffered devaluation due to inflation over the past century as has every currency. The rapid valuation of bitcoin in the past two years should make anyone suspicious of it's intrinsic real value. As a PM investor you yourself have seen gold and silver rise and fall in equal dramatic fashion over the past 3 years. How is bitcoin somehow immune to rapid devaluation when it has arguably no intrinsic value compared to PMs?
Paul Maritz It absolutely is the same of gold and silver, along with every other commodity. I find it interesting that the same people who chanted 'if you don't hold it you don't own it' when comparing PMs to paper stocks could swing 180 degrees when it comes to bitcoin.
"All money is a matter of belief", like you infer. Money has a subjective value, just like goods have a subjective value. The uses of gold & silver go way beyond their use as a medium of exchange. In particular for silver, it's real world uses almost guarantees it's store of value. Other money like fiat & crypto do not have a very good store of value. You could measure silver's store of value in relation to the energy/work it took to acquire it. I watch the oil:silver ratio which is 4:1 as an avg. Crypto is easy money, the work to acquire it, the barrier of entry for new crypto being low, tells me we have not discovered the real value of BTC yet. The free market will determine that and we will have some winners and losers playing that game.
Paul Maritz You are presenting crypto as a flawless system impervious to any fraud. If the NSA can crack 256 bit encryption how can you claim there will never be any corruption in the protocol in the future?
On the extremely rare occurrence of fraud in securities exchange there are regulatory agencies enforcing the rules and ultimately a company behind the stock which can make the shareholder whole again. When crypto gets hacked there is zero backing. You can fill up your thumbdrive with all the private keys you want. When the system becomes suspect due to security breach and no other party will accept bitcoins because of the current risk all of your beloved currency is worth zero.
You are right crypt does not carry the same risk as paper stocks, it carries a FAR greater fundamental risk.
I agree with you that bitcoin has greater convenience than gold & silver as a medium of exchange, but isn't that what fiat does very well anyway? we have banknotes, coins, credit cards, debit cards, paypal, cheques, bank wire, millions of ATMs, the list goes on. society functions just fine without having to convert fiat into bitcoin first, and even though businesses accept BTC, they could very well convert it straight back into fiat anyway. (i'm yet to see a company announce company profits in number of BTC by the way.)
the only advantage I see with BTC over the current methods of exchange is with international transfers. banks charge exorbitant fees for international bank transfers, but if my relatives overseas want to send me money, they could do so via bitcoin and we'd save transaction costs compared to doing it through the bank.
for store of value which can't be inflated away, gold still wins hands down. Why are central banks buying gold and not BTC? because gold is MONEY, has been and still is despite what they tell you.
A well thought out comment there, with some great points. If I were a central bank, I would be buying gold as well - it is the proven store of value indeed. The primary reason I like bitcoin over fiat as a means of exchange is that it is a vote of "no confidence" in the fiat dollar system. Anything that gives the evil bankers less power and is just as easy (or easier) and just as cheap (or even saves me money) - why not do it? Why use their FRN's when I can use BTC? Investors of BTC, entrepreneurs, and liberty minded folk win when I use BTC. Who wins when I use fiat? Elite bankers.
I know some companies do hold BTC and don't immediately convert it back to dollars - overstock does at least some of this according to the CEO.
To speak to the title of your video, if bitcoin were ever to become established there is nothing to stop JP Morgan from buying up all of the bitcoins. Contrary to popular belief banks would love this because they would have unregulated capital control over the market. Quite the opposite of crashing the banks, this would return us to the grand ole days of the robber barons.
The central banks already have unregulated capital control over entire countries. The only way JP Morgan could buy up all the bitcoin is if the holders were willing to sell them all (unlikely). Currently, JPM can naked short many different markets including gold and silver. So while the CFTC "regulates" the markets - do they really, when JPM can basically do whatever they want? Free markets don't currently exist - except perhaps in bitcoin.
Heavenly Prepper While current regulations are far from perfect we are undeniably much, much better off than the previous turn of the century. Large banks have leverage in markets but by no means overshadow them. 2008 proved that as well as identifying how far the US government will go to back (prop up) the system, something that would never happen with unregulated bitcoin.
Free markets exist everywhere, what you are implying is that there is a need for markets where every individual has equal weight. This has never, and will never exist an any society that engages in trade.
Betting that people's value of anti-establishment crypto currency would outweigh self interest and greed is a fool's folly. I guarantee you the most die hard bitcoin supporter will sell his entire holdings if the price is right and he will in turn find some rational to justify his decision to do so to others.
bitcoin isnt for me man. honestly, when i rant against it I get all these people telling me to "do some research" To me, this is the second coming of bitcoin. I watched it and followed it years ago when it was liuke 13 bucks and when it was like 17 cents. it looked like a fad back then and it still does. back then what really turned me off was silk road. research into silk road led me to bitcoin i think. today what turns me off is all the "facts" about bitcoin that are just plain wrong. Fact 1: there is a limited amount.....that can be divided infinitely? Fact 2: its unhackable, untrackable......really, its just sad that people think that. Fact 3: bitcoin for the freeman! Stick it to the man!...The man sticks us and no amount of ones and zeros in a digital wallett will help, see fact 2.
and im sorry HP but I have to ask, you mentioned about a collapse to barter situation trying to trade silver accross states. In a collapse to barter system how likely is it that you will find it easier to log on and send to bitcoin to the farmer with the corn?
As a high risk investment I think crypto currencies are the cats pajamas! but I dont do high risk. I buy gold and silver because its mor fun than a bank account and honestly i get better intrest on my savings hahahaha ;)
PS. I cant believe 11 people thumbed down this vid hahaha I thumbed up ;)
IKR? I completely disagree with the way crypto is emerging but I certainly don't dislike HP for having an opinion.
Oh, Heck no! Its like i said on another youtubers vid a while back, congrats to the people who can and do make money off of it. more power to them. its really just not for me. Im sure i would have a much different opinion if I had bought back when it was pennies, but back then there were rumours that the CSA had bought up all the bitcoins at that point. im not a drug dealer or anything but i figured they were working to destroy it. Now a days i stick with more conventional investments and shy away from the shadowy stuff.
Bullshit: Time to Unsubscribe.
It is okay to sometimes hear an opinion that differs or is counter to one's own. Either way, God bless.