What about Bitcoin's purpose as... a currency? Buying and selling?
Yes, but to create an economy based on bitcoin we need a working banking system, that's not wiped out at every crisis. Is it possible?
It's called:
The Blockchain
Topic: So, this is it: Bitcoin credit crunch. - page 2. (Read 3023 times)
What about Bitcoin's purpose as... a currency? Buying and selling?
Yes, but to create an economy based on bitcoin we need a working banking system, that's not wiped out at every crisis. Is it possible?
It's called:
The Blockchain
Mining won't be much profitable after ASICs hit. Then what?
Mining is becoming unprofitable for individual hobbyists who don't have specialized hardware. In the near future the only profitable mining operations will be dedicated operations, and the most profitable ones will be able to offer real, stable returns on investments, and they will attract investors.
This kind of thinking is why I am invested in pyramining, by the way. I think that kind of operation is the wave of the future in mining.
What about Bitcoin's purpose as... a currency? Buying and selling?
Yes, but to create an economy based on bitcoin we need a working banking system, that's not wiped out at every crisis. Is it possible?
Most of the legitimate and sustainable bitcoin-based businesses right now are mining operations. They have not been hurt by pirate's default at all.
Mining won't be much profitable after ASICs hit. Then what?
Really interesting post.
Like JMAHH, I don't fully agree with this:
I think we are still in the infancy of bitcoin-based business, and I believe most of these "financial services" businesses are/were ponzi schemes.
Most of the legitimate and sustainable bitcoin-based businesses right now are mining operations. They have not been hurt by pirate's default at all.
Like JMAHH, I don't fully agree with this:
So in essence, we have built a system in which the only subsidized behaviour is accumulating money in an offline wallet, and never touch it again for the next 10 years. While investing is insanely risky anyway, since there is no way even for honest and legitimate businesses to protect against generalized market crashes.
I think we are still in the infancy of bitcoin-based business, and I believe most of these "financial services" businesses are/were ponzi schemes.
Most of the legitimate and sustainable bitcoin-based businesses right now are mining operations. They have not been hurt by pirate's default at all.
I agree with the beginning with your statement. Pirategate offers a nice - and stark - contrast to 2007-2008 in terms of policy.
What about Bitcoin's purpose as... a currency? Buying and selling?
So in essence, we have built a system in which the only subsidized behaviour is accumulating money in an offline wallet, and never touch it again for the next 10 years.
What about Bitcoin's purpose as... a currency? Buying and selling?
When in 2008 the lending bubble collapsed, the Government choose the less-trouble way to just print money, and give banks a free ticket to survival. As we all know, doing so rewards mindless risking, at the expense of the value of everyone's money -even the ones who didn't profit from the scheme, and didn't want to take part in the risk in the first place..
Bitcoin was exactly designed to avoid such a possibility.
Now we have had our bubble: Pirate. Most of the "banks" lied to their depositors saying they weren't investing in Pirate, and they were. But even if they were perfectly honest, the chain effect caused an incredible amount of defaults -so, credit crunch, which now can grow on its own.
The difference is, we don't have a FED to bail them out. This means
1) mindless risking won't be rewarded: people will have to stand the full consequences of their actions.
2) those who wanted to stay out, are left to stay out -in a bitcoin internal perspective, at least: the USD price may have fallen, but 1BTC is still 1/21.000.000 of all the bitcoins that ever will be.
But this also means
3) people that just wanted to invest their coins, at what was widely considered the "normal" and "safe" interest rate of the bitcoin world, are often just about as screwed as those that "invested" in "shut up and take my money" style. Some "low risk", "guaranteed" and "insured" fund is already promising to pay back at least the principal in... 3 years time!
So in essence, we have built a system in which the only subsidized behaviour is accumulating money in an offline wallet, and never touch it again for the next 10 years. While investing is insanely risky anyway, since there is no way even for honest and legitimate businesses to protect against generalized market crashes. (we had an insurance company, CPA, but it seems it was hit by the crash more than the ones it was supposed to insure...)
Was it worth it?
(I am not saying it wasn't, just that it's worth reflecting on it
)
Bitcoin was exactly designed to avoid such a possibility.
Now we have had our bubble: Pirate. Most of the "banks" lied to their depositors saying they weren't investing in Pirate, and they were. But even if they were perfectly honest, the chain effect caused an incredible amount of defaults -so, credit crunch, which now can grow on its own.
The difference is, we don't have a FED to bail them out. This means
1) mindless risking won't be rewarded: people will have to stand the full consequences of their actions.
2) those who wanted to stay out, are left to stay out -in a bitcoin internal perspective, at least: the USD price may have fallen, but 1BTC is still 1/21.000.000 of all the bitcoins that ever will be.
But this also means
3) people that just wanted to invest their coins, at what was widely considered the "normal" and "safe" interest rate of the bitcoin world, are often just about as screwed as those that "invested" in "shut up and take my money" style. Some "low risk", "guaranteed" and "insured" fund is already promising to pay back at least the principal in... 3 years time!
So in essence, we have built a system in which the only subsidized behaviour is accumulating money in an offline wallet, and never touch it again for the next 10 years. While investing is insanely risky anyway, since there is no way even for honest and legitimate businesses to protect against generalized market crashes. (we had an insurance company, CPA, but it seems it was hit by the crash more than the ones it was supposed to insure...)
Was it worth it?
(I am not saying it wasn't, just that it's worth reflecting on it
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