Bitcoin investment for libertarians

Posted by Blanco 3 weeks ago to Economics
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How many of you are invested in bitcoin? I've been invested in it along with gold for a good while, and I like the philosophy behind it. It seems to me to be a good place for libertarians to have a part of their investment funds. What do you others think? What you think about billionaire entrepreneurs like Elon Musk and Michael Saylor coming into the space?


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  • Posted by 2 weeks, 6 days ago
    Great comments! And yes, I understand all the risks involved in bitcoin, but I also understand the tremendous possible upside. It's a speculative asset, and that's the way I approach it. Yes, I'm mostly in gold, but I do own a small amount of bitcoin as well. I have very little fiat currency (dollars) of course since it is steadily being devalued by the feds with their endless, inane MMT deficit spending and money creation. I own my house and cars with no indebtedness. I feel comfortable with my finances and sleep well at night. By the way, I also have guns, ammo and food storage just in case of anarchy.
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  • Posted by $ pixelate 2 weeks, 4 days ago
    My stance on Bitcoin has not changed since investigating it in 2011: it is the interesting implementation of a collection of mathematical curiosities. That's it. There is nothing behind it, not so much as even a tulip bulb, and it certainly is not money. Calling it currency is a stretch. Limited supply? There are 2,100,000,000,000,000 Satoshis maximum; the so-called limit is purely arbitrary. The notion of "mining" it via the increasingly time-consuming-to-solve mathematical problems is itself an ever increasing waste of power as the number of kW hours of power to generate one BTC heads towards the moon. It is a purely speculative play if you choose it as an investment. I can see BTC hitting $100k in three months and touching $250k sometime in 2021. This is not to endorse the power of BTC as a currency; rather, it is to illuminate the vast amount of currency sloshing around and the millions of individuals that want to get on board this highly volatile speculative train. I understand that over 85% of all BTC is owned by 0.5% of the individuals that have a claim to BTC. While a single positive "tweet" by a high-end owner with a large social network can send the BTC up by double-percentage points; so too, a pejorative "tweet" can result in a nearly instantaneous drop. What will happen to BTC when FedCoin is announced along with individual digital wallets and the Fed directly injecting currency (UBI) into those wallets – along with negative interest rates on the principle (spend it or lose it). I agree with Michael Saylor -- a single Black Swan Event could send BTC to nearly zero. His take is that likelihood is ~1%. I think the likelihood is much higher and that the crash will occur incrementally similar to the hailstone curve of an investment discovered to be devoid of value. My money has a home in land, gold, silver, water rights and very little in any digital medium. I often think that I was born 100 years too late.
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    • Posted by bubah1mau 2 weeks, 4 days ago
      A really big stock market crash (on the order of 25 %) will still place a premium back on U.S. cash. The assets you mention may recover and even zoom as the government re-inflates after a major crash, but they will suffer in the meantime with everyone heading for the exit at the same time--and that exit is still cash.
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  • Posted by $ Markus_Katabri 2 weeks, 6 days ago
    I respect your financial decision...BUT... my non financial advisor opinion on Bitcoin is, while it theoretically has a ceiling of 21 million. More or less. Due to the fractional trading that is going on, it has no floor. They go out 8 decimal places now. There’s talk of going 16. That is effectively an infinite supply.
    For short term gains if you want to play the market. Sure. But, for low risk, store of wealth, type investing. NO WAY. Yellen can wipe out the acceptability characteristic of BTC with the stroke of a pen. I’m not giving THEM that much power over me.
    Permanent Portfolio for the win. Just as Saint Harry Browne intended. GOLD and SILVER are a Libertarian’s best friend. And NOT ETF Gold/Silver. The less paper between you and the metal, the better.
    That’s my 0.00000002 of a Bitcoin’s worth.
    And people like Musk are just screwing around. Once you have that big a ball of money you’d have to be insanely stupid to lose it all. We mere mortals don’t have fearless money.
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    • Posted by 2 weeks, 6 days ago
      Bitcoin DOES have a finite supply of 21,000,000 built into the architecture of the system. And yes, each bitcoin can be divided into 100,000,000 satoshi. However, that does NOT means that the supply of bitcoin would exceed the 21,000,000 supply. And by the way, that finite supply won't even be mined and in the system before the middle of the next century.
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      • Posted by $ Markus_Katabri 1 week, 6 days ago
        So how many times can we divide the “finite” supply, Before the miniscule piece is meaningless? How many decimal points out do we need to go before it becomes a problem for you guys? If I give you a sliver of a $100 bill, would you treasure it? Or would a sliver of a gold coin be better?
        If you’re diversified that’s great. Speculate in Crypto all you want. It drives the PM market down. And that’s benefiting me at the moment.

        Truth be told even PM isn’t the end all be all. Currency is just a store of wealth and/or a medium for the transfer of wealth. If you’re unable to convert that store into something with intrinsic value in a worst case scenario, it’s worthless. If you’re choosing Crypto, or PM, over getting new tires or home repair etc.....in the current market, whatever gains you have could be obliterated when that wealth has to come back into the realm of reality and hyperinflation. A plane may be flying at 1000kts. But, if the Air Mass is moving at 900kts against, how much progress is really being made for the resources expended? Resources being missed opportunity cost in this case.
        Currently crypto is proving to be a great hedge. And I’ll admit to having some. (And no it’s not DOGE) But, I wouldn’t hold it long term.
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  • Posted by CircuitGuy 2 weeks, 6 days ago
    I really love the idea of cryptocurrencies as a medium of exchange, as an alternative to state-backed currencies. I own a small amount and use it to buy things from people who accept it as payment.

    I am less sure about them as an "investment". My view, which may be contrary to other libertarians, is that money is a medium of exchange but not a store of value. I like that money can be created limitlessly commensurate with good value-creating ideas. I struggle to understand the models where a cryptocurrency funds things like data storage, energy efficiency, or startup businesses.

    I am excited by the possibility that blockchain, which cryptocurrencies run on, will allow decentralization in many areas unrelated to money. That could be a revolution that allows math to take the place of trusted intermediaries and validation authorities.
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    • Posted by $ AJAshinoff 2 weeks, 6 days ago
      Personally, I prefer substance over an algorithms security (aka it theoretically cannot be seized). The premise is bullshit since any an electronic medium can and will be hacked eventually or simply taken down. Proof? Look at the media blackout over the stolen election and the cancelling of accounts that your leftist cronies can't stand, the number of websites simply disappearing because its in opposition to the bidens puppet masters.

      Nah, I'll take gold, silver and metals. While they can be taken from me by force they are mine in hand to do with as I please and not subject to someone's permission to use or a reliance on someone else's tally.

      Regardless of medium, capitalism is an endless fountain of wealth for those with ambition, drive and determination. Capitalism is the accumulation of things for one's self to make ones life as one wishes.
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      • Posted by CircuitGuy 2 weeks, 6 days ago
        "capitalism is an endless fountain of wealth for those with ambition, drive and determination."
        Sometimes words lose their intensity over time, but capitalism, people being free to use what they have to create more value for themselves, really is a limitless fountain of wealth.
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      • Posted by CircuitGuy 2 weeks, 6 days ago
        I'm not sure if blockchain will be hacked, but I definitely prefer non-substance when it comes to money. I like capital, things that are useful for creating value, to be free for their owners to deploy to create wealth; and I like money to have no intrinsic value. Blockchain offers a possible way to do that without a central authority establishing media of exchange by fiat.

        Even precious metals, which you mention, are valued as a medium of exchange well beyond their value for producing products and services. They're like a bubble in that regard. I'm not disparaging them. They're an extremely long-standing store of value and a hedge against instability.
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  • Posted by jwjones 2 weeks, 4 days ago
    I can see from some of the comments here that many do not understand Bitcoin. For a better understanding, I would encourage folks to look up Matthew Kratter of Trader University on YouTube, and watch some of his videos.

    Full discloser: I am highly diversified, including stocks, bonds, physical metals, and Bitcoin. So far, my Bitcoin holdings have outperformed EVERYTHING. Additionally, I have used it to purchase a variety of products and services. I'm sticking with it, personally.
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  • Posted by bubah1mau 2 weeks, 4 days ago
    I have yet to see how cryptos will perform in a major stock market shakeout. After I see healthy performance in a situation where the chips are down I may think more about it as a "currency."
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