@coastaljerseyguy said:
Not for me, put 20% of my pay into 401k Vanguard ETFs. Too old to worry about risk or some 4 year cycle like some post mentioned.
Max out the 401k and IRAs also plus the additional 50+ contributions. Still have disposable income that needs to be parked somewhere. Crypto has been good for that. THKS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
Wooooha! Did someone just say it's officially "TACO™" Tuesday????
@coastaljerseyguy said:
Not for me, put 20% of my pay into 401k Vanguard ETFs. Too old to worry about risk or some 4 year cycle like some post mentioned.
Max out the 401k and IRAs also plus the additional 50+ contributions. Still have disposable income that needs to be parked somewhere. Crypto has been good for that. THKS!
My wife takes care of the rest of my disposable income.
@Higashiyama said: @ProofCollection said “No, the rate of production of bitcoin cannot be accelerated. If I wasn't clear above, the bitcoin software adjusts production so that it will always”
Thanks for this correction. It’s a fascinating point, AI should impact the cost of mining and likely the number of mining operations, but will have negligible impact on the aggregate rate of mining.
It remains plausible to believe that the long term value of bitcoin will trend to zero. I find it hard to believe that bitcoin has long term value as a means of exchange, store of value, etc. Bitcoin and the bitcoin community may prove to be quite resilient, but …
Long term can be a very long time. Hard to say what the world will look like in 50 or 100 years. Will people care about PMs in 50 or 100 or 200 years? The world needs something like Bitcoin though, it's just impossible to predict if there will be something better to come along or not. I presume everyone in this discussion is American and I find that most of us tend to think about Bitcoin with a myopic US-only perspective. We've had the luxury of a currency with a fair amount of stability that is the world's reserve currency (for now). When you understand that the rest of the world doesn't have this luxury and doesn't want to rely on the US dollar and access to the SWIFT system the value of an independent digital currency accepted worldwide becomes pretty apparent.
Precious metals have been money for 5,000+ years. Will they still be valued 50 years from now ? Probably (in my opinion).
Bitcoin has been around for, what, 15 years ? Will it still be a thing 15 years from now ? I put the odds at 50-50, although I have nothing really to base that on. And that is the problem - there is no historical track record for crypto-currency in general.
My outlook for Bitcoin is for there to be significant challenges.
It is very energy-intensive. Does society really need it ? It seems that it is not really a very efficient medium of exchange.
Will Central Bank Digital Currencies (CBDC) take over ? I could see this happening as there are ways for governments to implement monetary policy and acquire revenues via CBDC.
The Achilles-Heel word has already been mentioned in this thread: "Software". Who controls and writes the software ? The Bitcoin "community". But wherever there is software, there can be hidden manipulation and hidden agendas.
As I understand it, the act of "mining" Bitcoin is the mechanism by which Bitcoin transactions are verified. The mining is where all the energy consumption originates. As time goes by, the subsidy for mining is halved at regular time intervals. At some point, there will be no more subsidy for mining and the reward from mining will come entirely from transaction fees. These fees can spike at times of peak demand for urgent transactions. I don't think anyone really knows how Bitcoin will function if everyone rushes for the exits at the same time, and the fees for these urgent transactions spike so high that it becomes impossible to trade. And if the Bitcoin value were to drop precipitously, that would greatly diminish the incentive to do the mining (because the mining reward, in real terms, could become insufficient to make it worthwhile).
So I could see Bitcoin go on for some years.
Or it could implode in spectacular fashion.
@dcarr said:
Precious metals have been money for 5,000+ years. Will they still be valued 50 years from now ? Probably (in my opinion).
Yes, hard to argue with that track record. But in the past few decades the world has gone digital. And again, technology could make it feasible to create precious metals artificially or space mining could make the metals no longer precious. Fortune telling it tough.
Bitcoin has been around for, what, 15 years ? Will it still be a thing 15 years from now ? I put the odds at 50-50, although I have nothing really to base that on. And that is the problem - there is no historical track record for crypto-currency in general.
I get it. But the US and other nations are establishing Bitcoin reserves and the future is undeniably digital. It's easy to see the direction things are headed. The future may not be Bitcoin, but things are headed that direction.
My outlook for Bitcoin is for there to be significant challenges.
It is very energy-intensive. Does society really need it ? It seems that it is not really a very efficient medium of exchange.
It probably won't be used as a medium of exchange. That's why BTC is referred to as digital gold which isn't really a medium of exchange either.
Does society need it? The success of Bitcoin would indicate that the answer is yes.
Will Central Bank Digital Currencies (CBDC) take over ? I could see this happening as there are ways for governments to implement monetary policy and acquire revenues via CBDC.
The future is digital. To expect CBs not to adopt new technology is silly. It's not if, it's when. Perhaps not all of them, but at least a few and I think some already have.
The Achilles-Heel word has already been mentioned in this thread: "Software". Who controls and writes the software ? The Bitcoin "community". But wherever there is software, there can be hidden manipulation and hidden agendas.
Nothing is hidden with Bitcoin. The code is public. The only way to change it is to get the majority of the network to run the new code. Not only is that infeasible to convince the majority of the network to adopt "bad" software improvements, but should someone manage to do that in a hostile manner, a portion of the network would run the old code and then the world could decide whether to use the New Bitcoin or the Old Bitcoin. So really the global market would decide what succeeds.
As I understand it, the act of "mining" Bitcoin is the mechanism by which Bitcoin transactions are verified. The mining is where all the energy consumption originates. As time goes by, the subsidy for mining is halved at regular time intervals. At some point, there will be no more subsidy for mining and the reward from mining will come entirely from transaction fees. These fees can spike at times of peak demand for urgent transactions. I don't think anyone really knows how Bitcoin will function if everyone rushes for the exits at the same time, and the fees for these urgent transactions spike so high that it becomes impossible to trade. And if the Bitcoin value were to drop precipitously, that would greatly diminish the incentive to do the mining (because the mining reward, in real terms, could become insufficient to make it worthwhile).
We actually do know how it functions when it becomes overloaded. That's happened before. As you note fees spike and it becomes difficult to use. Improvements have made this less likely to happen. Bitcoin is not intended for high volume transactions. Other crypto will likely fill this role.
The mining reward system is brilliant in its conception. All of the scenarios you've mentioned have happened before. When the price goes down and mining profit margins wane, mining power goes down. When mining power goes down, the algo adjusts to make mining easier to maintain the same production rate. The opposite happens when mining profit margins surge. It's not unlike gold really. With high gold prices more mines become feasible and ramp up production. As a result we will see higher gold production which absent other factors would lead to dropping gold prices and the less profitable mines shutting down again.
So I could see Bitcoin go on for some years.
Or it could implode in spectacular fashion.
Maybe someone can explain to me why these Bitcoin miners get paid in BTC for doing some complex mathematical equations or something like that. I never understood the logic or rationale.
I mean, if the owner or creator of all the Bitcoins needed to figure out these mathematical equations or needed to know what Pi to the Trillionth decimal space was, yeah, you get paid for doing work and he gives you a BTC in exchange.
But best I can tell they just do some complicated computations and then get BTC for it.
@GoldFinger1969 said:
Maybe someone can explain to me why these Bitcoin miners get paid in BTC for doing some complex mathematical equations or something like that. I never understood the logic or rationale.
I mean, if the owner or creator of all the Bitcoins needed to figure out these mathematical equations or needed to know what Pi to the Trillionth decimal space was, yeah, you get paid for doing work and he gives you a BTC in exchange.
But best I can tell they just do some complicated computations and then get BTC for it.
@dcarr said:
Precious metals have been money for 5,000+ years. Will they still be valued 50 years from now ? Probably (in my opinion).
Yes, hard to argue with that track record. But in the past few decades the world has gone digital. And again, technology could make it feasible to create precious metals artificially or space mining could make the metals no longer precious. Fortune telling it tough.
Bitcoin has been around for, what, 15 years ? Will it still be a thing 15 years from now ? I put the odds at 50-50, although I have nothing really to base that on. And that is the problem - there is no historical track record for crypto-currency in general.
I get it. But the US and other nations are establishing Bitcoin reserves and the future is undeniably digital. It's easy to see the direction things are headed. The future may not be Bitcoin, but things are headed that direction.
My outlook for Bitcoin is for there to be significant challenges.
It is very energy-intensive. Does society really need it ? It seems that it is not really a very efficient medium of exchange.
It probably won't be used as a medium of exchange. That's why BTC is referred to as digital gold which isn't really a medium of exchange either.
Does society need it? The success of Bitcoin would indicate that the answer is yes.
Will Central Bank Digital Currencies (CBDC) take over ? I could see this happening as there are ways for governments to implement monetary policy and acquire revenues via CBDC.
The future is digital. To expect CBs not to adopt new technology is silly. It's not if, it's when. Perhaps not all of them, but at least a few and I think some already have.
The Achilles-Heel word has already been mentioned in this thread: "Software". Who controls and writes the software ? The Bitcoin "community". But wherever there is software, there can be hidden manipulation and hidden agendas.
Nothing is hidden with Bitcoin. The code is public. The only way to change it is to get the majority of the network to run the new code. Not only is that infeasible to convince the majority of the network to adopt "bad" software improvements, but should someone manage to do that in a hostile manner, a portion of the network would run the old code and then the world could decide whether to use the New Bitcoin or the Old Bitcoin. So really the global market would decide what succeeds.
As I understand it, the act of "mining" Bitcoin is the mechanism by which Bitcoin transactions are verified. The mining is where all the energy consumption originates. As time goes by, the subsidy for mining is halved at regular time intervals. At some point, there will be no more subsidy for mining and the reward from mining will come entirely from transaction fees. These fees can spike at times of peak demand for urgent transactions. I don't think anyone really knows how Bitcoin will function if everyone rushes for the exits at the same time, and the fees for these urgent transactions spike so high that it becomes impossible to trade. And if the Bitcoin value were to drop precipitously, that would greatly diminish the incentive to do the mining (because the mining reward, in real terms, could become insufficient to make it worthwhile).
We actually do know how it functions when it becomes overloaded. That's happened before. As you note fees spike and it becomes difficult to use. Improvements have made this less likely to happen. Bitcoin is not intended for high volume transactions. Other crypto will likely fill this role.
The mining reward system is brilliant in its conception. All of the scenarios you've mentioned have happened before. When the price goes down and mining profit margins wane, mining power goes down. When mining power goes down, the algo adjusts to make mining easier to maintain the same production rate. The opposite happens when mining profit margins surge. It's not unlike gold really. With high gold prices more mines become feasible and ramp up production. As a result we will see higher gold production which absent other factors would lead to dropping gold prices and the less profitable mines shutting down again.
So I could see Bitcoin go on for some years.
Or it could implode in spectacular fashion.
Those certainly are the two possibilities.
.
Manufacturing precious metals would require expensive and messy nuclear reactions. Mining asteroids would also be extremely expensive for humans. If robots can do the entire missions themselves, that might make it somewhat economical, eventually.
Digital currencies will be developed further for wider use. I don't think that necessarily bodes well for Bitcoin, however. What happens when Bitcoin is no longer the prominent "crypto-currency" ?
If Bitcoin is not used as a medium of exchange, then by definition, it is not a crypto "currency". Bitcoin was originally envisioned as a currency for exchange and not as an "asset". This illustrates that it is hard to predict how things play out. And a complex system like Bitcoin can behave strangely and unexpectedly when severely stressed.
The variability in the difficulty of mining Bitcoin seems like it makes it much more inefficient in terms of energy usage. I know the reasoning for it is to keep Bitcoin going. But to make mining more difficult and expensive, when there are more mining resources doing it, seems very inefficient.
I used to write software for a living. I worked with a guy who often amazed people with how fast he could write an algorithm. His algorithms usually worked quite well - until an unexpected input occurred and then the algorithm would blow up. I suspect that the Bitcoin algorithms haven't been fully stress-tested yet for fringe inputs.
BTC is and will remain the gold standard. The Crypto of Kings so to speak. It should no doubt be a part of every portfolio. Stay away from the gutter coins, the doge, dogfart, shiba etc. and you'll be fine. RGDS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
Wooooha! Did someone just say it's officially "TACO™" Tuesday????
I used to write software for a living. I worked with a guy who often amazed people with how fast he could write an algorithm. His algorithms usually worked quite well - until an unexpected input occurred and then the algorithm would blow up. I suspect that the Bitcoin algorithms haven't been fully stress-tested yet for fringe inputs.
There was a segment on CNBC last week discussing the threat of Quantum Computing to the Bitcoin algorithms. I admit I don't understand algorithms, but it seems to be a static infrastructure in a very dynamic industry
I used to write software for a living. I worked with a guy who often amazed people with how fast he could write an algorithm. His algorithms usually worked quite well - until an unexpected input occurred and then the algorithm would blow up. I suspect that the Bitcoin algorithms haven't been fully stress-tested yet for fringe inputs.
@dcarr said:
Precious metals have been money for 5,000+ years. Will they still be valued 50 years from now ? Probably (in my opinion).
Yes, hard to argue with that track record. But in the past few decades the world has gone digital. And again, technology could make it feasible to create precious metals artificially or space mining could make the metals no longer precious. Fortune telling it tough.
Bitcoin has been around for, what, 15 years ? Will it still be a thing 15 years from now ? I put the odds at 50-50, although I have nothing really to base that on. And that is the problem - there is no historical track record for crypto-currency in general.
I get it. But the US and other nations are establishing Bitcoin reserves and the future is undeniably digital. It's easy to see the direction things are headed. The future may not be Bitcoin, but things are headed that direction.
My outlook for Bitcoin is for there to be significant challenges.
It is very energy-intensive. Does society really need it ? It seems that it is not really a very efficient medium of exchange.
It probably won't be used as a medium of exchange. That's why BTC is referred to as digital gold which isn't really a medium of exchange either.
Does society need it? The success of Bitcoin would indicate that the answer is yes.
Will Central Bank Digital Currencies (CBDC) take over ? I could see this happening as there are ways for governments to implement monetary policy and acquire revenues via CBDC.
The future is digital. To expect CBs not to adopt new technology is silly. It's not if, it's when. Perhaps not all of them, but at least a few and I think some already have.
The Achilles-Heel word has already been mentioned in this thread: "Software". Who controls and writes the software ? The Bitcoin "community". But wherever there is software, there can be hidden manipulation and hidden agendas.
Nothing is hidden with Bitcoin. The code is public. The only way to change it is to get the majority of the network to run the new code. Not only is that infeasible to convince the majority of the network to adopt "bad" software improvements, but should someone manage to do that in a hostile manner, a portion of the network would run the old code and then the world could decide whether to use the New Bitcoin or the Old Bitcoin. So really the global market would decide what succeeds.
As I understand it, the act of "mining" Bitcoin is the mechanism by which Bitcoin transactions are verified. The mining is where all the energy consumption originates. As time goes by, the subsidy for mining is halved at regular time intervals. At some point, there will be no more subsidy for mining and the reward from mining will come entirely from transaction fees. These fees can spike at times of peak demand for urgent transactions. I don't think anyone really knows how Bitcoin will function if everyone rushes for the exits at the same time, and the fees for these urgent transactions spike so high that it becomes impossible to trade. And if the Bitcoin value were to drop precipitously, that would greatly diminish the incentive to do the mining (because the mining reward, in real terms, could become insufficient to make it worthwhile).
We actually do know how it functions when it becomes overloaded. That's happened before. As you note fees spike and it becomes difficult to use. Improvements have made this less likely to happen. Bitcoin is not intended for high volume transactions. Other crypto will likely fill this role.
The mining reward system is brilliant in its conception. All of the scenarios you've mentioned have happened before. When the price goes down and mining profit margins wane, mining power goes down. When mining power goes down, the algo adjusts to make mining easier to maintain the same production rate. The opposite happens when mining profit margins surge. It's not unlike gold really. With high gold prices more mines become feasible and ramp up production. As a result we will see higher gold production which absent other factors would lead to dropping gold prices and the less profitable mines shutting down again.
So I could see Bitcoin go on for some years.
Or it could implode in spectacular fashion.
Those certainly are the two possibilities.
.
Manufacturing precious metals would require expensive and messy nuclear reactions. Mining asteroids would also be extremely expensive for humans. If robots can do the entire missions themselves, that might make it somewhat economical, eventually.
I'm pretty sure they said that about diamonds, and here we are. I'm not going to write off the possibility, but I'm also not going to worry about it.
Digital currencies will be developed further for wider use. I don't think that necessarily bodes well for Bitcoin, however. What happens when Bitcoin is no longer the prominent "crypto-currency" ?
Sure it's always possible that we'll see the decline of BTC or the rise of an alternative. Like stocks you kind of have to keep an eye on it. I don't see this changing any time soon but things may look different in 5 or 10 years.
If Bitcoin is not used as a medium of exchange, then by definition, it is not a crypto "currency". Bitcoin was originally envisioned as a currency for exchange and not as an "asset". This illustrates that it is hard to predict how things play out. And a complex system like Bitcoin can behave strangely and unexpectedly when severely stressed.
I would argue that gold is not a medium of exchange either and is also not a currency. It used to be, but not anymore. But it still has its role as a financial asset.
The variability in the difficulty of mining Bitcoin seems like it makes it much more inefficient in terms of energy usage. I know the reasoning for it is to keep Bitcoin going. But to make mining more difficult and expensive, when there are more mining resources doing it, seems very inefficient.
I'm not sure what you're measuring this against. Yes the BTC network expends a lot of energy to run and generate coins. Unlike data centers powering the traditional banking system, most Bitcoin is mined with stranded or otherwise-wasted energy. That's because this is the cheapest energy and makes the mining profitable.
I used to write software for a living. I worked with a guy who often amazed people with how fast he could write an algorithm. His algorithms usually worked quite well - until an unexpected input occurred and then the algorithm would blow up. I suspect that the Bitcoin algorithms haven't been fully stress-tested yet for fringe inputs.
I'm not sure why you would say this. The Bitcoin code itself has to be one of the most heavily studied and scrutinized code in its 16 years of use and existence. Not only that, there is a billion dollar payday waiting for anyone who can figure out how to crack or exploit it. If there's any software that's been sufficiently proven, Bitcoin is probably it.
@dcarr said:
Precious metals have been money for 5,000+ years. Will they still be valued 50 years from now ? Probably (in my opinion).
Yes, hard to argue with that track record. But in the past few decades the world has gone digital. And again, technology could make it feasible to create precious metals artificially or space mining could make the metals no longer precious. Fortune telling it tough.
Bitcoin has been around for, what, 15 years ? Will it still be a thing 15 years from now ? I put the odds at 50-50, although I have nothing really to base that on. And that is the problem - there is no historical track record for crypto-currency in general.
I get it. But the US and other nations are establishing Bitcoin reserves and the future is undeniably digital. It's easy to see the direction things are headed. The future may not be Bitcoin, but things are headed that direction.
My outlook for Bitcoin is for there to be significant challenges.
It is very energy-intensive. Does society really need it ? It seems that it is not really a very efficient medium of exchange.
It probably won't be used as a medium of exchange. That's why BTC is referred to as digital gold which isn't really a medium of exchange either.
Does society need it? The success of Bitcoin would indicate that the answer is yes.
Will Central Bank Digital Currencies (CBDC) take over ? I could see this happening as there are ways for governments to implement monetary policy and acquire revenues via CBDC.
The future is digital. To expect CBs not to adopt new technology is silly. It's not if, it's when. Perhaps not all of them, but at least a few and I think some already have.
The Achilles-Heel word has already been mentioned in this thread: "Software". Who controls and writes the software ? The Bitcoin "community". But wherever there is software, there can be hidden manipulation and hidden agendas.
Nothing is hidden with Bitcoin. The code is public. The only way to change it is to get the majority of the network to run the new code. Not only is that infeasible to convince the majority of the network to adopt "bad" software improvements, but should someone manage to do that in a hostile manner, a portion of the network would run the old code and then the world could decide whether to use the New Bitcoin or the Old Bitcoin. So really the global market would decide what succeeds.
As I understand it, the act of "mining" Bitcoin is the mechanism by which Bitcoin transactions are verified. The mining is where all the energy consumption originates. As time goes by, the subsidy for mining is halved at regular time intervals. At some point, there will be no more subsidy for mining and the reward from mining will come entirely from transaction fees. These fees can spike at times of peak demand for urgent transactions. I don't think anyone really knows how Bitcoin will function if everyone rushes for the exits at the same time, and the fees for these urgent transactions spike so high that it becomes impossible to trade. And if the Bitcoin value were to drop precipitously, that would greatly diminish the incentive to do the mining (because the mining reward, in real terms, could become insufficient to make it worthwhile).
We actually do know how it functions when it becomes overloaded. That's happened before. As you note fees spike and it becomes difficult to use. Improvements have made this less likely to happen. Bitcoin is not intended for high volume transactions. Other crypto will likely fill this role.
The mining reward system is brilliant in its conception. All of the scenarios you've mentioned have happened before. When the price goes down and mining profit margins wane, mining power goes down. When mining power goes down, the algo adjusts to make mining easier to maintain the same production rate. The opposite happens when mining profit margins surge. It's not unlike gold really. With high gold prices more mines become feasible and ramp up production. As a result we will see higher gold production which absent other factors would lead to dropping gold prices and the less profitable mines shutting down again.
So I could see Bitcoin go on for some years.
Or it could implode in spectacular fashion.
Those certainly are the two possibilities.
.
Manufacturing precious metals would require expensive and messy nuclear reactions. Mining asteroids would also be extremely expensive for humans. If robots can do the entire missions themselves, that might make it somewhat economical, eventually.
I'm pretty sure they said that about diamonds, and here we are. I'm not going to write off the possibility, but I'm also not going to worry about it.
Digital currencies will be developed further for wider use. I don't think that necessarily bodes well for Bitcoin, however. What happens when Bitcoin is no longer the prominent "crypto-currency" ?
Sure it's always possible that we'll see the decline of BTC or the rise of an alternative. Like stocks you kind of have to keep an eye on it. I don't see this changing any time soon but things may look different in 5 or 10 years.
If Bitcoin is not used as a medium of exchange, then by definition, it is not a crypto "currency". Bitcoin was originally envisioned as a currency for exchange and not as an "asset". This illustrates that it is hard to predict how things play out. And a complex system like Bitcoin can behave strangely and unexpectedly when severely stressed.
I would argue that gold is not a medium of exchange either and is also not a currency. It used to be, but not anymore. But it still has its role as a financial asset.
The variability in the difficulty of mining Bitcoin seems like it makes it much more inefficient in terms of energy usage. I know the reasoning for it is to keep Bitcoin going. But to make mining more difficult and expensive, when there are more mining resources doing it, seems very inefficient.
I'm not sure what you're measuring this against. Yes the BTC network expends a lot of energy to run and generate coins. Unlike data centers powering the traditional banking system, most Bitcoin is mined with stranded or otherwise-wasted energy. That's because this is the cheapest energy and makes the mining profitable.
I used to write software for a living. I worked with a guy who often amazed people with how fast he could write an algorithm. His algorithms usually worked quite well - until an unexpected input occurred and then the algorithm would blow up. I suspect that the Bitcoin algorithms haven't been fully stress-tested yet for fringe inputs.
I'm not sure why you would say this. The Bitcoin code itself has to be one of the most heavily studied and scrutinized code in its 16 years of use and existence. Not only that, there is a billion dollar payday waiting for anyone who can figure out how to crack or exploit it. If there's any software that's been sufficiently proven, Bitcoin is probably it.
.
Manufacturing diamonds does not involve any nuclear reactions. All you do is take carbon and apply heat and pressure to change the bonds between carbon atoms. Nothing in the nucleus of the atoms is changed. To produce gold from something that isn't, you have to add or subtract protons and/or neutrons from the atom's nucleus (thus, a nuclear reaction). This is considerably more difficult than a simple chemical reaction like making diamonds.
Gold was a medium of exchange for thousands of years. It still is, but it has become too valuable for day-to-day use in commerce.
When I write that the Bitcoin "system" has not really been tested at the limits, I am not referring to the "hacking" of it. I am referring to unexpected developments in the operating environment. For example, a spike in transaction fees which prompts more selling, which causes higher fees, and an even faster rush for the exit, and so on, like a runaway nuclear reaction.
But I think a greater risk is something like a disagreement in the "community" over the software. This could emerge at some point, causing confusing "forks" to emerge in the chain. If there are numerous forks, the competition between them could destroy the whole thing.
@dcarr said:
Precious metals have been money for 5,000+ years. Will they still be valued 50 years from now ? Probably (in my opinion).
Yes, hard to argue with that track record. But in the past few decades the world has gone digital. And again, technology could make it feasible to create precious metals artificially or space mining could make the metals no longer precious. Fortune telling it tough.
Bitcoin has been around for, what, 15 years ? Will it still be a thing 15 years from now ? I put the odds at 50-50, although I have nothing really to base that on. And that is the problem - there is no historical track record for crypto-currency in general.
I get it. But the US and other nations are establishing Bitcoin reserves and the future is undeniably digital. It's easy to see the direction things are headed. The future may not be Bitcoin, but things are headed that direction.
My outlook for Bitcoin is for there to be significant challenges.
It is very energy-intensive. Does society really need it ? It seems that it is not really a very efficient medium of exchange.
It probably won't be used as a medium of exchange. That's why BTC is referred to as digital gold which isn't really a medium of exchange either.
Does society need it? The success of Bitcoin would indicate that the answer is yes.
Will Central Bank Digital Currencies (CBDC) take over ? I could see this happening as there are ways for governments to implement monetary policy and acquire revenues via CBDC.
The future is digital. To expect CBs not to adopt new technology is silly. It's not if, it's when. Perhaps not all of them, but at least a few and I think some already have.
The Achilles-Heel word has already been mentioned in this thread: "Software". Who controls and writes the software ? The Bitcoin "community". But wherever there is software, there can be hidden manipulation and hidden agendas.
Nothing is hidden with Bitcoin. The code is public. The only way to change it is to get the majority of the network to run the new code. Not only is that infeasible to convince the majority of the network to adopt "bad" software improvements, but should someone manage to do that in a hostile manner, a portion of the network would run the old code and then the world could decide whether to use the New Bitcoin or the Old Bitcoin. So really the global market would decide what succeeds.
As I understand it, the act of "mining" Bitcoin is the mechanism by which Bitcoin transactions are verified. The mining is where all the energy consumption originates. As time goes by, the subsidy for mining is halved at regular time intervals. At some point, there will be no more subsidy for mining and the reward from mining will come entirely from transaction fees. These fees can spike at times of peak demand for urgent transactions. I don't think anyone really knows how Bitcoin will function if everyone rushes for the exits at the same time, and the fees for these urgent transactions spike so high that it becomes impossible to trade. And if the Bitcoin value were to drop precipitously, that would greatly diminish the incentive to do the mining (because the mining reward, in real terms, could become insufficient to make it worthwhile).
We actually do know how it functions when it becomes overloaded. That's happened before. As you note fees spike and it becomes difficult to use. Improvements have made this less likely to happen. Bitcoin is not intended for high volume transactions. Other crypto will likely fill this role.
The mining reward system is brilliant in its conception. All of the scenarios you've mentioned have happened before. When the price goes down and mining profit margins wane, mining power goes down. When mining power goes down, the algo adjusts to make mining easier to maintain the same production rate. The opposite happens when mining profit margins surge. It's not unlike gold really. With high gold prices more mines become feasible and ramp up production. As a result we will see higher gold production which absent other factors would lead to dropping gold prices and the less profitable mines shutting down again.
So I could see Bitcoin go on for some years.
Or it could implode in spectacular fashion.
Those certainly are the two possibilities.
.
Manufacturing precious metals would require expensive and messy nuclear reactions. Mining asteroids would also be extremely expensive for humans. If robots can do the entire missions themselves, that might make it somewhat economical, eventually.
I'm pretty sure they said that about diamonds, and here we are. I'm not going to write off the possibility, but I'm also not going to worry about it.
Digital currencies will be developed further for wider use. I don't think that necessarily bodes well for Bitcoin, however. What happens when Bitcoin is no longer the prominent "crypto-currency" ?
Sure it's always possible that we'll see the decline of BTC or the rise of an alternative. Like stocks you kind of have to keep an eye on it. I don't see this changing any time soon but things may look different in 5 or 10 years.
If Bitcoin is not used as a medium of exchange, then by definition, it is not a crypto "currency". Bitcoin was originally envisioned as a currency for exchange and not as an "asset". This illustrates that it is hard to predict how things play out. And a complex system like Bitcoin can behave strangely and unexpectedly when severely stressed.
I would argue that gold is not a medium of exchange either and is also not a currency. It used to be, but not anymore. But it still has its role as a financial asset.
The variability in the difficulty of mining Bitcoin seems like it makes it much more inefficient in terms of energy usage. I know the reasoning for it is to keep Bitcoin going. But to make mining more difficult and expensive, when there are more mining resources doing it, seems very inefficient.
I'm not sure what you're measuring this against. Yes the BTC network expends a lot of energy to run and generate coins. Unlike data centers powering the traditional banking system, most Bitcoin is mined with stranded or otherwise-wasted energy. That's because this is the cheapest energy and makes the mining profitable.
I used to write software for a living. I worked with a guy who often amazed people with how fast he could write an algorithm. His algorithms usually worked quite well - until an unexpected input occurred and then the algorithm would blow up. I suspect that the Bitcoin algorithms haven't been fully stress-tested yet for fringe inputs.
I'm not sure why you would say this. The Bitcoin code itself has to be one of the most heavily studied and scrutinized code in its 16 years of use and existence. Not only that, there is a billion dollar payday waiting for anyone who can figure out how to crack or exploit it. If there's any software that's been sufficiently proven, Bitcoin is probably it.
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Manufacturing diamonds does not involve any nuclear reactions. All you do is take carbon and apply heat and pressure to change the bonds between carbon atoms. Nothing in the nucleus of the atoms is changed. To produce gold from something that isn't, you have to add or subtract protons and/or neutrons from the atom's nucleus (thus, a nuclear reaction). This is considerably more difficult than a simple chemical reaction like making diamonds.
20 years ago artificial diamonds weren't really a thing. Now they are everywhere. Things can change and scale fast. Don't write off artificial gold just yet.
Gold was a medium of exchange for thousands of years. It still is, but it has become too valuable for day-to-day use in commerce.
To valuable or too cumbersome? FRNs are almost to the point that they are too cumbersome.
When I write that the Bitcoin "system" has not really been tested at the limits, I am not referring to the "hacking" of it. I am referring to unexpected developments in the operating environment. For example, a spike in transaction fees which prompts more selling, which causes higher fees, and an even faster rush for the exit, and so on, like a runaway nuclear reaction.
A few years ago the Bitcoin network was very overloaded. Fees spiked and it took hours to get a transaction processed. They've since added things like the Lightning Network and other measures to speed things up, but I think it's pretty well known and understood what happens when network usage spikes. I believe but I could be wrong, the network just processes the transactions that are paying the highest fees first but eventually everything goes through. It sucks if you're paying for a cup of coffee at a POS, but if you're just sending a few satoshis to your friend it's probably not that big of a deal. But then if you wanted to mail a check or an ounce of gold you're looking at a few days anyway and you could always convert the BTC to a crypto that isn't overloaded.
But I think a greater risk is something like a disagreement in the "community" over the software. This could emerge at some point, causing confusing "forks" to emerge in the chain. If there are numerous forks, the competition between them could destroy the whole thing.
Unlikely and again that's already happened. Ever heard of Bitcoin Cash or Bitcoin SV? They forked and everyone ended up with the same amount of coins on both networks. The market has decided what to value each one at and I think the world handled it quite well.
Comments
Added some BTC and ETH this morning, Thank you for the gift. RGDS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
Wooooha! Did someone just say it's officially "TACO™" Tuesday????
Today I've been glancing at the live Bitcoin chart, maybe around once an hour. It's frightening to watch, and I don't even own any. 😐
Don't be surprised when BTC gets a Gov bailout. If not for BTC itself, it would eventually occur for stable coins due to treasuries exposure.
Keep averaging down.
Up, down, sideways, it doesn't matter. Add it every payday just like clockwork. Again, thanks for the gift. RGDS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
Wooooha! Did someone just say it's officially "TACO™" Tuesday????
Not for me, put 20% of my pay into 401k Vanguard ETFs. Too old to worry about risk or some 4 year cycle like some post mentioned.
Max out the 401k and IRAs also plus the additional 50+ contributions. Still have disposable income that needs to be parked somewhere. Crypto has been good for that. THKS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
Wooooha! Did someone just say it's officially "TACO™" Tuesday????
My wife takes care of the rest of my disposable income.
Long term can be a very long time. Hard to say what the world will look like in 50 or 100 years. Will people care about PMs in 50 or 100 or 200 years? The world needs something like Bitcoin though, it's just impossible to predict if there will be something better to come along or not. I presume everyone in this discussion is American and I find that most of us tend to think about Bitcoin with a myopic US-only perspective. We've had the luxury of a currency with a fair amount of stability that is the world's reserve currency (for now). When you understand that the rest of the world doesn't have this luxury and doesn't want to rely on the US dollar and access to the SWIFT system the value of an independent digital currency accepted worldwide becomes pretty apparent.
http://ProofCollection.Net
Precious metals have been money for 5,000+ years. Will they still be valued 50 years from now ? Probably (in my opinion).
Bitcoin has been around for, what, 15 years ? Will it still be a thing 15 years from now ? I put the odds at 50-50, although I have nothing really to base that on. And that is the problem - there is no historical track record for crypto-currency in general.
My outlook for Bitcoin is for there to be significant challenges.
It is very energy-intensive. Does society really need it ? It seems that it is not really a very efficient medium of exchange.
Will Central Bank Digital Currencies (CBDC) take over ? I could see this happening as there are ways for governments to implement monetary policy and acquire revenues via CBDC.
The Achilles-Heel word has already been mentioned in this thread: "Software". Who controls and writes the software ? The Bitcoin "community". But wherever there is software, there can be hidden manipulation and hidden agendas.
As I understand it, the act of "mining" Bitcoin is the mechanism by which Bitcoin transactions are verified. The mining is where all the energy consumption originates. As time goes by, the subsidy for mining is halved at regular time intervals. At some point, there will be no more subsidy for mining and the reward from mining will come entirely from transaction fees. These fees can spike at times of peak demand for urgent transactions. I don't think anyone really knows how Bitcoin will function if everyone rushes for the exits at the same time, and the fees for these urgent transactions spike so high that it becomes impossible to trade. And if the Bitcoin value were to drop precipitously, that would greatly diminish the incentive to do the mining (because the mining reward, in real terms, could become insufficient to make it worthwhile).
So I could see Bitcoin go on for some years.
Or it could implode in spectacular fashion.
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Very plausible and good perspective on the inevitable " fees" tagged on.
Yes, hard to argue with that track record. But in the past few decades the world has gone digital. And again, technology could make it feasible to create precious metals artificially or space mining could make the metals no longer precious. Fortune telling it tough.
I get it. But the US and other nations are establishing Bitcoin reserves and the future is undeniably digital. It's easy to see the direction things are headed. The future may not be Bitcoin, but things are headed that direction.
It probably won't be used as a medium of exchange. That's why BTC is referred to as digital gold which isn't really a medium of exchange either.
Does society need it? The success of Bitcoin would indicate that the answer is yes.
The future is digital. To expect CBs not to adopt new technology is silly. It's not if, it's when. Perhaps not all of them, but at least a few and I think some already have.
Nothing is hidden with Bitcoin. The code is public. The only way to change it is to get the majority of the network to run the new code. Not only is that infeasible to convince the majority of the network to adopt "bad" software improvements, but should someone manage to do that in a hostile manner, a portion of the network would run the old code and then the world could decide whether to use the New Bitcoin or the Old Bitcoin. So really the global market would decide what succeeds.
We actually do know how it functions when it becomes overloaded. That's happened before. As you note fees spike and it becomes difficult to use. Improvements have made this less likely to happen. Bitcoin is not intended for high volume transactions. Other crypto will likely fill this role.
The mining reward system is brilliant in its conception. All of the scenarios you've mentioned have happened before. When the price goes down and mining profit margins wane, mining power goes down. When mining power goes down, the algo adjusts to make mining easier to maintain the same production rate. The opposite happens when mining profit margins surge. It's not unlike gold really. With high gold prices more mines become feasible and ramp up production. As a result we will see higher gold production which absent other factors would lead to dropping gold prices and the less profitable mines shutting down again.
Those certainly are the two possibilities.
http://ProofCollection.Net
Created by technology, destroyed by technology.
Knowledge is the enemy of fear
When the power goes out your ability to access, manage, or transact with your Bitcoin goes poof.
yeah no thx
COPPER is gutter !
Yeah cuz that happens so frequently. :roll THKS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
Wooooha! Did someone just say it's officially "TACO™" Tuesday????
It happens every single day. Step out of your bubble.
COPPER is gutter !
Get a Generac. RGDS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
Wooooha! Did someone just say it's officially "TACO™" Tuesday????
Actually, I have one. So blessed aren’t we?
COPPER is gutter !
Yes if you only have a desktop PC and don't have a laptop or phone. The more critical aspect is the Internet.
http://ProofCollection.Net
The most critical aspect is relying on someone to verify the blockchain...
Maybe someone can explain to me why these Bitcoin miners get paid in BTC for doing some complex mathematical equations or something like that. I never understood the logic or rationale.
I mean, if the owner or creator of all the Bitcoins needed to figure out these mathematical equations or needed to know what Pi to the Trillionth decimal space was, yeah, you get paid for doing work and he gives you a BTC in exchange.
But best I can tell they just do some complicated computations and then get BTC for it.
This will explain it: https://en.wikipedia.org/wiki/Proof_of_work
http://ProofCollection.Net
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Manufacturing precious metals would require expensive and messy nuclear reactions. Mining asteroids would also be extremely expensive for humans. If robots can do the entire missions themselves, that might make it somewhat economical, eventually.
Digital currencies will be developed further for wider use. I don't think that necessarily bodes well for Bitcoin, however. What happens when Bitcoin is no longer the prominent "crypto-currency" ?
If Bitcoin is not used as a medium of exchange, then by definition, it is not a crypto "currency". Bitcoin was originally envisioned as a currency for exchange and not as an "asset". This illustrates that it is hard to predict how things play out. And a complex system like Bitcoin can behave strangely and unexpectedly when severely stressed.
The variability in the difficulty of mining Bitcoin seems like it makes it much more inefficient in terms of energy usage. I know the reasoning for it is to keep Bitcoin going. But to make mining more difficult and expensive, when there are more mining resources doing it, seems very inefficient.
I used to write software for a living. I worked with a guy who often amazed people with how fast he could write an algorithm. His algorithms usually worked quite well - until an unexpected input occurred and then the algorithm would blow up. I suspect that the Bitcoin algorithms haven't been fully stress-tested yet for fringe inputs.
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BTC is and will remain the gold standard. The Crypto of Kings so to speak. It should no doubt be a part of every portfolio. Stay away from the gutter coins, the doge, dogfart, shiba etc. and you'll be fine. RGDS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
Wooooha! Did someone just say it's officially "TACO™" Tuesday????
There was a segment on CNBC last week discussing the threat of Quantum Computing to the Bitcoin algorithms. I admit I don't understand algorithms, but it seems to be a static infrastructure in a very dynamic industry
https://www.thestreet.com/crypto/technology/major-secruity-firm-warns-quantum-computing-could-break-bitcoin
They were invented by AL Gore.
Knowledge is the enemy of fear
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Bitcoin might be suitable for some gambling/speculating accounts.
It is a speculation, not an investment for a "portfolio".
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I'm pretty sure they said that about diamonds, and here we are. I'm not going to write off the possibility, but I'm also not going to worry about it.
Sure it's always possible that we'll see the decline of BTC or the rise of an alternative. Like stocks you kind of have to keep an eye on it. I don't see this changing any time soon but things may look different in 5 or 10 years.
I would argue that gold is not a medium of exchange either and is also not a currency. It used to be, but not anymore. But it still has its role as a financial asset.
I'm not sure what you're measuring this against. Yes the BTC network expends a lot of energy to run and generate coins. Unlike data centers powering the traditional banking system, most Bitcoin is mined with stranded or otherwise-wasted energy. That's because this is the cheapest energy and makes the mining profitable.
I'm not sure why you would say this. The Bitcoin code itself has to be one of the most heavily studied and scrutinized code in its 16 years of use and existence. Not only that, there is a billion dollar payday waiting for anyone who can figure out how to crack or exploit it. If there's any software that's been sufficiently proven, Bitcoin is probably it.
http://ProofCollection.Net
.
Manufacturing diamonds does not involve any nuclear reactions. All you do is take carbon and apply heat and pressure to change the bonds between carbon atoms. Nothing in the nucleus of the atoms is changed. To produce gold from something that isn't, you have to add or subtract protons and/or neutrons from the atom's nucleus (thus, a nuclear reaction). This is considerably more difficult than a simple chemical reaction like making diamonds.
Gold was a medium of exchange for thousands of years. It still is, but it has become too valuable for day-to-day use in commerce.
When I write that the Bitcoin "system" has not really been tested at the limits, I am not referring to the "hacking" of it. I am referring to unexpected developments in the operating environment. For example, a spike in transaction fees which prompts more selling, which causes higher fees, and an even faster rush for the exit, and so on, like a runaway nuclear reaction.
But I think a greater risk is something like a disagreement in the "community" over the software. This could emerge at some point, causing confusing "forks" to emerge in the chain. If there are numerous forks, the competition between them could destroy the whole thing.
.
Thanks again for the tip.
RGDS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
Wooooha! Did someone just say it's officially "TACO™" Tuesday????
20 years ago artificial diamonds weren't really a thing. Now they are everywhere. Things can change and scale fast. Don't write off artificial gold just yet.
To valuable or too cumbersome? FRNs are almost to the point that they are too cumbersome.
A few years ago the Bitcoin network was very overloaded. Fees spiked and it took hours to get a transaction processed. They've since added things like the Lightning Network and other measures to speed things up, but I think it's pretty well known and understood what happens when network usage spikes. I believe but I could be wrong, the network just processes the transactions that are paying the highest fees first but eventually everything goes through. It sucks if you're paying for a cup of coffee at a POS, but if you're just sending a few satoshis to your friend it's probably not that big of a deal. But then if you wanted to mail a check or an ounce of gold you're looking at a few days anyway and you could always convert the BTC to a crypto that isn't overloaded.
Unlikely and again that's already happened. Ever heard of Bitcoin Cash or Bitcoin SV? They forked and everyone ended up with the same amount of coins on both networks. The market has decided what to value each one at and I think the world handled it quite well.
http://ProofCollection.Net
Bitturd
Gold - the REAL stuff
Silver ( The REAL McCoy Not paper fantasy)
COPPER is gutter !
