[slang]

Originally Posted by tw

The first and obvious problem with Bitcoin is its block chain. It can only process seven transactions per second. Visa alone processes ten thousand transactions per second. Its structure does not have such limits. That alone makes Bitcoin too limited to become legal tender.

While it seems that it was over hyped by speculators when the price was growing, it does have place in the marketplace, in my opinion. A slower process speed would prevent me from buying a cup of coffee with it but in other uses speed is not the greatest concern, as I’ll attempt to explain below.

Originally Posted by tw

More problems. Money must measure value. A currency that fluctuates wildly does not measure value; cannot be trusted.

This is a great concern to me, yes. A few days ago Bitcoin was trading at about $4000 a coin, now it’s up to nearly $5000 a coin. Although it seems reasonable that I might be more willing to use it when the market price has increased my purchasing power.

On the flipside, a merchant may be less willing to sell their goods or services at a new Bitcoin high, aniticipating that the price would fall.

The opposite might also be true. Merchants may be more willing to sell after a dip in market price of Bitcoin. Adjust their Bitcoin deomonated prices accordingly.

Originally Posted by tw

If Bitcoin is to become money, then 1636 Dutch tulips were also a good currency. 2005 SIVs and CDOs (even backed by sub-prime loans) were also money. Finance people were using those financial instruments to print money - until the inevitable crash happened a few years later.

I’ll have to think on that. Were they money or were they assets in which another derivative was created? Cash.

Originally Posted by tw

Bitcoin is rarely used to buy things. Of maybe $2.4 billion transactions, estimates put $0.65 billion just for selling stolen credit cards, drugs, bogus medicines and other illegal transactions. Another $0.87 billion is estimated for gambling. And an unknown majority of that remaining money is believed to be speculation. That is not a healthy currency.

It’s not a healthy currency for day to day transaction. We agree on that.

See below for my additional comments.

Originally Posted by tw

Third, a currency must be able to expand or contract with economy changes. Currencies backed by a central bank, through history, tend to be the most stable. During severe recessions, less currency is required. Bitcoin has no ability to change with economic conditions. So it is more popular as gambling chips rather than money.

The Federal Reserve inflates MUCH more than they deflate. So they inflate by 100, then deflate by 10.

They still end up with most of the free currency that they create and are able to spend or loan it before prices rise. Win win for the Fed.

Sure, the American people benefit, but only as a by product. The American people ( or dollar holders ) can’t type on a keyboard to create another trillion dollars on a whim to pay their electric bill.

It’s a BIG bill. I’m mining Bitcoins.

You and your gambling chips man, you’re killing me.

Originally Posted by tw

And then fraud. For example, Quadrigacx, a Bitcoin exchange, suddenly went bankrupt when its founder (Gerard Cotton) died. Cotton had the only encryption keys. In trying to untangle the bankruptcy, it is now believed that all $165 million in deposits were missing eight months earlier. Bitcoin intentionally makes criminal investigations impossible; makes fraud easy, untraceable, and profitable.

Wow, it sure does seem to. But what about traditional online and banking systems? Let’s take a look.

The following quotations are in regard to cash but are relevant in my point as they show the corruption of the banking system as it is now.

The War Against Cash: The Plot to Empty Your Wallet and Own Your Financial Future – And Why You Must Fight It.-Nov2017 – Ross Clark (Britain)

$3.00 on Kindle. It's good. Buy and read it.

“…Rogoff’s case would be stronger were it not for the astonishing amount of fraud which takes place online, involving electronic money. Where, in the argument that associates cash with crime, fits the shocking statistic that in 2015 British bank customers lost a total of 755 million [$1.3 Billion] pounds in fraud involving payment cards, online banking and (the last making up a very small proportion of the total )cheques.“

“…But these assets weren’t bought with banknotes. No one can walk into a London estate agent and buy a property with bags full of cash; the estate agents are under legal obligation to report anyone who tries to do this. These properties were bought via large cash transfers from overseas banks: electronic money.

Maybe criminals should not have been allowed to open these bank accounts; perhaps someone had not done their due diligence and check the provenance of the money in these account, or possibly there are criminals working inside the banking system who facilitate them. Yet the fact is that they did open them. So long as criminals are able to open bank accounts with impunity, eliminating cash [or Bitcoin] from circulation is going to make minimal difference to the amount of crime.”
…
“…The $200 million of banknotes found at El Chapo’s home is small beer compared with the vast quantities of money which are being laundered through bank accounts. In 2012 HSBC ( Hong Kong -Shanghai Banking Corporation ) was fined $1.9 billion after a US Senate

Investigation concluded that the bank had been a “conduit for drug kingpins and rogue nations”. Among it’s failures were allowing Mexican and Columbian drug cartels to launder $881 million through accounts, and to allow a Russian gang posing as second-hand car dealers to transfer $290 million.

According to the Organized Crime and Corruption Reports Project, 17 UK-based banks between them unwittingly processed $738 million worth of transactions on behalf of Russian criminal gangs. They didn’t need to move banknotes around in bags [or use Bitcoin]: they processed the money electronically through anonymous companies which they then dissolved.

I guess El Chapo was really just the criminal world’s equivalent of your granny: he stuck with cash because that's what he knew. Meanwhile younger rivals have had little trouble mastering the banking system to their advantage.”

So as I’ve said many times to many different audiences, when billions of dollars are accidently discovered in all sorts of criminal and corrupt activities, nobody knows anything.

But when the system can’t reconcile a piece of chewing gum that I bought, it’s a problem they must solve by some additional dumb assed thing I must now do, attest to, sign or report.

Hello Litecoin! And gold. And tulip bulbs.