Topic: Saxo Bank CEO: Bitcoin Faces Serious Challenges (Needs Link To Real Assets) (Read 2147 times)

Sorry but we're all tired of being either robbed, ignored, manipulated, and/or controlled by the government...

Most of us are willing to work with the government for as long as the government is willing to work for the people. Our recent descendants have already handed the government absolute power over our wealth and well-being. Bitcoin was invented because people are tired of the abuse and entitlement that resulted from the poor choices of our recent past.

- What type of regulation would you propose?
- What type of regulation would the government propose?
- What is the real and measurable benefit of the regulation being proposed?
- What is the cost of the regulation being proposed?
- What is the current problem with Bitcoin that would cause people to feel that the cost of regulation is an investment rather than a burden?

Please answer all of these for me because these are the questions each of us will answer for ourselves when considering government regulations. Unless there's a measurable benefit associated with the cost then it's a bad decision. Each potential regulation has a separate cost/benefit relationship and should be considered individually.

Now obviously the USD isn't owned by the people. It can be re-appropriated, denied, debased, and regulated into oblivion all without our consent. The people have no ownership rights to the dollar or say in how it's treated. The USD was allowed to become more powerful than the people and the government follows the dollar before following the wishes of the population.

The centralized exchanges will be regulated; if you convert USD to Bitcoin then you play by the rules of USD. Each country will establish it's own laws for Bitcoin to fiat exchanges...

Businesses who accept Bitcoins will continue to be taxed on income. However; there will be a legal debate on what constitutes as a taxable event.

The government will start to consider the interests of the people if the people aren't completely dependent on the dollar... The people need the means to live independently of the government if the government becomes abusive. Allowing a monopoly on money is allowing a monopoly on power...

You can call it fun money if you wish; but I think a lot of people will call it redistribution of power...

Since the bitcoin community is opposing the requirements of governments and the financial sector, they will not accept bitcoin at a large scale.
Now it's time to create a new coin that will be regulated and accepted by governments, banks and consumers.
You guys can still play around with your fun money, but don't expect any broad acceptance by society.

Yeah, somebody has already made a gold/silver backed coin any way. I don't think it's needed nor will it probably work very well. Crypto is fine as it is, but I'm sure there'll be many different versions tried over the years.

Using the blockchain to create a digital asset register for bonds and other contracts (i.e. color coins or similar) is a great idea. But those assets (claims to gold etc) will not be money anymore than a share in a gold ETF is money. Only the empty coins will be money.

I don't understand. If you hold an asset coin and want to trade it, what do you use to pay the tx fee to the miner?

The answer is empty coin.

So if there is a big and active liquid market for asset coins then the value of empty coins will be high because without them you can't trade your asset coins.

(deliberately ignoring the hairsplitting between currency/money here)

money emerges if there is no backing. the fact that it is considered valuable without backing MAKES it money.

only very few assets have achieved this in the past. silver, gold, fiat paper money, bitcoin. are about the only things that come to mind.

I think you misunderstood me.
Nothing needs to replace bitcoin, we simple add text fields for each coin to be used for the issuance of contract, something like "colored coins".
Those fields may or may not be used. You can still trade "clean" bitcoins, while people like me prefer to trade with "colored" bitcoins with gold contracts in them.

Sure, but that doesn't mean it's not "linked" to the cost of the electricity used to generate the coins. What you are talking about is a coin "backed" by a real world asset with "intrinsic value". But it's impossible to safely back a cryptocurrency with a real world asset because like you said, we must trust the entities claiming to hold the assets. Cryptocurrency is supposed to be trustless, the moment you add centralized trust to the network you go back to square one. But I do agree there could be some value in a coin liked you described, but it's not the "next step" in cryptocurrency, it's simply a different breed of cryptocurrency which would have its own use cases. I don't see why you feel so strongly that one must replace the other, or what ever it is you're trying to say.

I can never claim back the energy that was consumed during mining.
What I want is a coin where I at any time go and claim a certain asset, may it be 1 oz gold, 1 Apple share or 1 KwHour of energy.

You guys are so into bitcoin that you have forgotten why it was invented in the first place.

Major reasons to invent bitcoin:
-A digital alternative to physical money
-No need for a trusted third party to transfer money
-No need for a trusted third party to prevent double spending

Now it's time to let bitcoin or a new alt-coin evolve to the next step:
Become a public ledger for any kind of contract and be able to trade with those contracts online without the need of a trusted third party.
The value of a contract will of course depend on a trusted third party (issuer), but you will never need the trusted third party to store or transfer the contract.

The technical difference between bitcoin and "asset coin":
-Field for the public key of the issuer of the contract, Perth Mint for example.
-Field for contract details describing what the holder of the coin can claim from the issuer, for example "1 oz Gold".

You will still be able to trade an empty coin (value for issuer and contract not set) but empty coins will probably trade for cents, not for $1000.

Depending on how you define the term "linked" you could say Bitcoin is linked to electrical energy because each coin requires some amount of computing power to generate.  That's another reason I don't particularly like proof-of-stake, it takes away that energy requirement.

I agree.

Bitcoin is linked to the whole network, internet. So that is the asset backing BTC.

Fortunately, we have Counterparty/XCP now:

https://bitcointalksearch.org/topic/annxcp-counterparty-pioneering-peer-to-peer-finance-official-thread-395761

How about you read again what bitcoin is, what its benefits are, what it is useful for. They coin will kill all of that.

So true. Why would he say that BTC has to linked to some real asset, when FIAT money isn't linked either?

In my opinion, backing is a flaw, not a feature. I'm ready to watch an asset-backed crypto-currency compete with Bitcoin! Bring it!

This is my vision:
Asset coins - will be regulated and linked to real assets, mostly gold. Their value will be guaranteed by respectable financial institutions and mints.
They will hold 95% of the total crypto market value, it's possible that billions of dollars invested in gold ETF's flows into gold backed cryptos.
These coins will have most of their values contributed to their linked asset, instead the "miners" will make money on transaction fees.
I would not be surprised if such coins have up to 1 trillion dollar in market cap within 10 years, if their usage becomes widespread as the primary way of buying gold.

Fiat coins - Coins with no real intrinsic value (bitcoin, litecoin,... 1000s of other altcoins) will have 5% of the market cap, and be used for shady business and by idealists like you. 5% of 1 Trillion dollars is still a huge number, it means a total market cap of 50 billion dollars for bitcoin, litecoin and other fiat coins. If BTC remains no.1 among fiat-coins it will have a price of 5000 $ - that's 10 times more than today. So why are you guys complaining?

That's what they want. The only question is how many people they'll be able to fool.

Nobody needs this. That kind of kills the point of crypto.

Nobody will force you to stop bitcoin even if a gold-backed crypto currency becomes accepted as the no.1 coin.
The market is big enough for all of us.

Bitcoin doesn't have to be backed by these things because it's not government issued...

Backing of a currency is only necessary when nations are dealing with other nations.

Bitcoin transactions on a P2P basis are backed by the legal system; if you scam somebody you are breaking the law and will be responsible for your actions...

Banks are insured because you entrust your wealth to somebody other than yourself. Insurance is for protection against a central authority stealing your money... Bitcoin doesn't suffer the same problems that require these assurances...