What Is the SEC Doing to Blockchain Technology?
Posted by freedomforall 6 years, 8 months ago to Government
"The market for cryptoassets is booming beyond belief, approaching the market capitalization of Ireland or Austria, all in a few short years. It’s because smart money is figuring out just what an amazing innovation blockchain is. It has taken nine years to fully dawn on people.
This is not really about Bitcoin as such, or even just monetary innovation, though there is that, and that in itself would be amazing enough. This is about a new and vastly improved path for human engagement itself: documenting claims, establishing ownership, communicating in a reliable way across the globe person to person, and establishing new rules for making peace and prosperity possible."
This is not really about Bitcoin as such, or even just monetary innovation, though there is that, and that in itself would be amazing enough. This is about a new and vastly improved path for human engagement itself: documenting claims, establishing ownership, communicating in a reliable way across the globe person to person, and establishing new rules for making peace and prosperity possible."
There are only 21 million bitcoins in the entire system, so the more money that flows into the system increases the value of a bitcoin (or decreases it if money moves out). If you are in the weed-selling business, currency stability isn't a big consideration to the business model, but it's also pretty hard to buy anything or pay employees and payroll taxes with a bitcoin though, so inevitably money will move back out. If the Bitcoins are currently going up, the businesses that somewhat rely on them for cash reserves will be "sitting" on them and using other cash available at the moment, but as soon as the trend teeters downward, the holders will move billions out of it with lightning speed.
Because of the 21 million model, it is much more akin to shareholder equity than as a currency. A public company is worth exactly the product of the number of shares outstanding by the value someone is willing to pay for one - and Bitcoin is identical to that. It's the only reason it has gone up (and frequently went down) very fast. It's value has ranged from $0.08 to $3200 or wherever it is right now, compared to gold never really (ever) dropping below $1000 an ounce since we left the gold standard for the US dollar.
In the case of Bitcoin, the technology itself is pretty long in the tooth, it takes around 1400 to 2100 minutes to confirm a transaction during peak periods, which doesn't work for an over-the-counter type of sale, and it is more popular with the weed-in-a-backpack delivery model. There are also many next-generation competitors reaching production that don't take 2100 minutes to confirm a transaction, so if I were a betting man, I wouldn't bet on Bitcoin.
Ultimately, it really hasn't grown up beyond the Silk Road and paying-for-your-porn stuff, that is still by far the biggest business purpose of it. It's really just an encrypted file on a thumb drive, and pretty easy to lose in the vast scheme of things. Only a fool would keep their life's savings in that stuff. Should we ever be involved in a major conflict on the US homeland, I feel much more secure with the last-resort gold-coin reserve I keep in the safe deposit box.
(BTW, Gold was at sub $400 USD/oz from 1990 -2003 and sub $500 USD/oz from mid 1981 to 2005.)
http://www.macrotrends.net/1333/histo...
(Turn off inflation adjustments to see the actual pricing.)
Marijuana goes "recreational" in California on January 1, I would expect this to increase dramatically, I just kind of doubt it would be bitcoin rather than another. Bitcoin performance is way too slow for retail purposes, like I said.
I have serious reservations about alternative currencies in general... First, who controls it (?), obviously, someone created and issues them, such as the original Bitcoin guy. Suspicion would be they kept a few million of their own to sell, and what's to really stop them from inflating and diluting everyone (?). Second, fiat currencies do have a purpose, I fought for 5 years overseas, there are really really bad people in the world, and the stuff I saw in Africa (Rwanda) would turn a standard American's guts inside-out.
Third, we really do need the ability to act decisively and in the interests of America and the free world, and being honest, printing money is a pretty easy way to do so. The alternative could have been a third-world barter system in the 2008 crisis had gone without response.
I think the assumption people make is that this is similar or the same concept as something like casino chips, and they indeed kind of use logos & such to look like that, but it's not the case. It's a decently effective get-rich quick scheme for the "minters".
I had this conversation with some friends on my LinkedIn securities / bonds / currencies group as we were watching Bitcoin go up. Ultimately, if you can't explain how it works to your mom, or even a good explanation of what it is for... or don't understand it yourself, it is probably a very risky "investment".
If you need to convert $100 to buy a 1-year subscription to your favorite porn or bondage site "anonymously", or you have a $500 a week pot-habit and plan to spend the bitcoin in a few hours, it probably meets your needs. Investment... no... particularly because the transaction fees to convert that back into something you can spend at the store or deposit in a bank are very, very steep... think pawn shop or cash-til-payday types of rates.
21 million in the system just isn't enough when you are talking something like 30,000 stores transacting with it. The decent ones do an average of $15,000 a day, which would be $450 million a day, but not all of them are doing $15k, probably many do something like $2k, nonetheless, with a share/equity model, it shoots the prices up. If we handicap it and call it $100 million a day, that is $4.76 of automatic increase of bitcoins daily - I have no idea what the relationship is, but that is where the demand is, it's not a panacea of currency trading.
Like I said, as soon as they need real currency to actually pay their bills with, they will have to convert some out of it. When (not if) that conversion curve steepens, no one would sit on the side lines and hope it turns back around, they would convert to USD, Euro, Yen, etc. very quickly.
My suspicion of the strategy would be to convert from bitcoin to Euro or Renminbi, and buy US Treasuries using an overseas broker. The Chinese and Germans buy US treasuries by the truckload, they can mask themselves in that pretty easy, and there are no shortage of shady brokers willing to take the trades in Hong Kong.
Of course, they don't 'advertise' that.. so if you invested at $4100 today, you would need to be at the $5535 level before making a penny on getting out of it.
Selling weed or porn = you don't care.
IRA investment = don't touch it with someone else's 10 foot pole.
Sure, it may actually get there, and I'm not going to say it won't... just saying it's very high risk.
Are the servers protected, how many cell phones and computers survive and how many, if any, satellites will be operating?
As far as Bitcoin et al goes, I agree with scojohnson and wouldn't touch it with someone else's 10 foot pole.
https://www.coindesk.com/information/...
It's always been about "ill-gotten wealth", not because it's convenient.
Never gona remember anything past 8...laughing.
Not a system to put all one's eggs in right now. Still need gold and silver coins and bars.
If the banking cartel goes cashless...you can kiss it allllllllll good bye!
They have no idea what they are doing, and are just shooting a impotent blank asserting management over a liquid asset that is not bound by US law.
I wonder if the "them" are considering (and mortified) that Bitcoin could completely disrupt international banking controls as a solely market-controlled currency without foolish bonds, interest rates and valuation manipulation.
https://news.bitcoin.com/government-a...