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Bitcoin - Part 2

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lomiller said:
Inflation and even hyper-inflation can be factored into economic transactions. Rapid unpredictable increases/decrease cannot be factored in, so as bad as hyper-inflation is, it’s still better than what we see with crypto-currencies.









Pegging a crypto-currency to your regular fiat currency doesn’t solve any of the issues you are complaining about, if you get hyperinflation because the fiat currency is mismanaged the crypto-currency will suffer from it too. If you peg it to the price of a commodity, then you get all the same problems you would with commodity based currencies (which modern economies moved away from for very good reasons).





We already have this, it’s called cash…
Click to expand...



Cash does not solve their problems. You can’t safely store cash. You can’t send or have cash sent to you easily when you are unbanked.

I get it, you don’t see it. I do. Time will tell.


Sent from my iPhone using Tapatalk
 
A question. If a person is unbanked, how do they get hold of cryptos in the first place. I assume the only way would be to have cash and a telephone, and could take their cash to a broker to buy a crypto directly and go through all the hoops.


Norm
 
fromdownunder said:
A question. If a person is unbanked, how do they get hold of cryptos in the first place. I assume the only way would be to have cash and a telephone, and could take their cash to a broker to buy a crypto directly and go through all the hoops.


Norm
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There are ATMs out there that dispense crypto-currency. (I know how silly that sounds, but there really are.)

See here for example
 
novaphile said:
There are ATMs out there that dispense crypto-currency. (I know how silly that sounds, but there really are.)

See here for example
Click to expand...


Thanks for the link. I did some follow ups, and you can open an account, buy and sell, and exchange Bitcoin with Fiat if you are handy to a machine that has the appropriate bells and whistles, and you have the appropriate identification(s).


I would expect that this sort of softwarew will become more common and easier to use if or when a Crypto becomes a practical day to day commodity.


Norm
 
fromdownunder said:
Yes, in the last month it has gone up from $6,250 to $4,000. And in the last day it's gone up from $4,250 to $3,950. (CCN pricing)


And since last December...



Norm
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I kind of like that, I remember years ago we all predicted a share market collapse on a given day, went short, and it went through the roof.

Yeah it collapsed upwards was the wry comment.
 
xjx388 said:
Tell that to Zimbabwe, Mexico, Venezuela, Somalia, Iraq....
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It's easy to see why Bitcoin would be preferable to the currencies of these countries, but what advantage does it have for the people of Zimbabwe, Mexico or Vesezuela that wouldn't be offered by simply trading in the currencies of more stable nations?
 
lomiller said:
Pegging a crypto-currency to your regular fiat currency doesn’t solve any of the issues you are complaining about, if you get hyperinflation because the fiat currency is mismanaged the crypto-currency will suffer from it too. If you peg it to the price of a commodity, then you get all the same problems you would with commodity based currencies (which modern economies moved away from for very good reasons).
Click to expand...

Is it even possible to peg a crypto-currency to a commodity? Maduro in Venezuela talked about doing that, but nobody took it seriously.

The value of a crypto-currency is always going to be based on supply and demand.
 
xjx388 said:
Cash does not solve their problems. You can’t safely store cash. You can’t send or have cash sent to you easily when you are unbanked.

I get it, you don’t see it. I do. Time will tell.


Sent from my iPhone using Tapatalk
Click to expand...

But you can do these things with dollars and without complicated programming crap that not everybody understands.
 
novaphile said:
There are ATMs out there that dispense crypto-currency. (I know how silly that sounds, but there really are.)

See here for example
Click to expand...

We have one of those Crypto ATMs in Bowling Green KY. The deal breaker is the 7% fee to buy your coin of choice. $3000/day max transaction limit and costs $210 in buyer fees (7% of $3000). Ouch, no thanks. I'd prefer to be on the other end of that transaction.

After reading into these ATMs it seems they don't actually contain any Crypto currency. The machine simply accepts your cash and buys your chosen coin from an online exchange while adding a not so modest 7% for the trouble.

Geeze, I may have to look into these things. 7% profit with no stockpiled cryptocurrency requirement sounds interesting.

I think these will catch on though not only for buying but eventually for selling as well. All they need is a somewhat more reasonable transaction fee.

Chris B.
 
Mycroft said:
Is it even possible to peg a crypto-currency to a commodity? Maduro in Venezuela talked about doing that, but nobody took it seriously.

The value of a crypto-currency is always going to be based on supply and demand.
Click to expand...

There is a company that offers a gold-backed account. I think the idea is that you buy gold, they keep physical gold in several locations and you get a (credit?) card that you can use to pay in normal currencies. The value of your account is determined by the gold price. I think it's these guys: https://www.goldmoney.com/

I wanted to buy some gold as an investment and looked into this some time ago. But their customer service got terrible reviews so I got turned off.

It's an interesting idea though, for those who love the idea of gold-backed currency.

I think that there is also a gold-backed cryptocurrency. But as the above example shows, why even have a crypto when you can just convert gold into the most convenient local currency?
 
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xjx388 said:
Cash does not solve their problems. You can’t safely store cash.
Click to expand...

It’s a hell of a lot safer to store cash that it is to store bitcoin.
xjx388 said:
You can’t send or have cash sent to you easily when you are unbanked.
Click to expand...

Ever hear of a money transfer? Also, for practical purposes, bitcoin requires something very much like a bank so the whole “unbanked” thing is a red herring.
 
xjx388 said:
Cash does not solve their problems. You can’t safely store cash. You can’t send or have cash sent to you easily when you are unbanked.
Click to expand...

What kind of computer and internet access do these unbanked people have to use these cryptos? As for storing, I don't think the electronic devices are that much safer than cash for such people.
 
Mycroft said:
But you can do these things with dollars and without complicated programming crap that not everybody understands.
Click to expand...

You can, but you shouldn't.

Operating in either foreign currency or crypto currency is going to create economic issues due to it’s implications for international trade. Look at what happened to the weaker EU nations when they were forced to undertake austerity programs to address large budget deficits. The decrease in spending slowed economic activity, which reduced tax revenue which ended up further increasing deficits.

Normally what would have happened is their currency would have declined on international markets which would have made their exports and outside investment more attractive, the resulting increase in exports would have stimulated their economy counteracting the negative economic impact of the spending cuts. Instead, because they were pegged to the Euro, the spending cuts created a downward economic spiral that devastated their economies.

It’s not unlike what happened in 1929 with the great depression. A major cause was countries trying to keep their currency pegged to the price of gold instead of increasing the base money supply when their economy started to slow.

An inflexible money supply is a recipe for economic instability, which at the end of the day is the real reason why crypto-currencies will never be a real alternative except for a few corner cases like wanting to hide illegal activities.
 
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