Facebook Crypto Boss: 'I Don't Think of Bitcoin as a Currency' (cnbc.com) 113
David Marcus, the head of Facebook's cryptocurrency projects, says that Bitcoin is digital gold, but it's not a good currency for transactions. From a report: "I don't think of Bitcoin as a currency. It's actually not a great medium of exchange because of its volatility," Marcus said speaking at the New York Times DealBook Conference in New York. "I see it as digital gold." Marcus said Bitcoin is like gold because you can hold on to it as an investment just as people do with actual gold, but the drastic upswings and dips that Bitcoin goes through makes it a bad option for people who need a system to send remittances across borders. That is a key market that Facebook is targeting with its Libra cryptocurrency and Calibra digital wallet. Unlike Bitcoin, Libra's value will be tied to currencies like the U.S. dollar and the Euro, which will help it remain stable. Marcus said a key reason that Bitcoin has not been regulated out of existence is because it is not perceived to be a medium of exchange. "It's an investment class that's decorrelated from the rest of the market," Marcus said. "Why feel threatened by that?"
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It's no worse than all the other currencies that use the international commodities markets to determine its baseline value. Gamblers in Hong Kong can set how much you pay for a quart of milk in Peoria.
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Bitcoin, being decentralized, has no easy steering mechanism like a fiat currency does, so it will inherently be more volatile than said fiat currency. Gamblers in Hong Kong may attempt to influence the price of milk in Peoria, but we have this thing called the Federal Reserve which can tighten or loosen the monetary supply, and effect other basic parameters, to keep the value stable. Being a stable store of value is one key component of the concept of "money." The other key concept is "unit of exchange" an
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I now have a mental image I can't un-see of the Federal Reserve as a rectal sphincter. (And I'm fair well sure it's the most accurate mental image I've ever had of a government agency.)
But you're absolutely correct. Without a set correlation to other currencies, Bitcoin (like nearly all other "digital currencies") flops around since there's nothing to anchor it against. (Actually, it would be an interesting exercise to model Bitcoin against a physical motion algorithm...)
The problem of paying for small g
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In the case of "unit of exchange" I was more referring to the time and expense of completing any transaction using bitcoin. I mean, if it takes 10 minutes to a day to verify and complete the transaction, and it costs up to a dollar per transaction (based on recent next block fees), then no one will ever use it for small purchases, even if the value were stable.
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Ahh, I hadn't considered that. That's a very valid point.
I wonder if at some point, there won't be a sub-currency that's tied to Bitcoin, but not accessible to the public. Something that allows for BTC micro-transactions to be aggregated into larger amounts that are worth being validated.
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A "steering mechanism" can steer badly (Score:1)
Bitcoin, being decentralized, has no easy steering mechanism like a fiat currency does, so it will inherently be more volatile than said fiat currency.
Well-managed fiat currencies do well. The experience of Zimbabwe and Venezuela recently, and the U.S. dollar and Hungarian PengÅ' many decades ago, show that not all fiat currencies are always well-managed.
Is a currency experiencing hyperinflation "volatile"? Its value isn't bouncing up and down, it's just dropping. Fast. (A purchasing power half-life of 15 hours, in the case of Hungary.)
https://www.investopedia.com/articles/personal-finance/122915/worst-hyperinflations-history.asp
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It's no worse than all the other currencies...
Let's see if you can personally manipulate the price of the US Dollar from your bedroom.
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I doubt I have to power to cause market panics like the president's staff can with a single tweet
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Gamblers in Hong Kong can set how much you pay for a quart of milk in Peoria.
They can influence it. For a time. A little. As can all of those who speculate in or hedge dairy-related commodities and currencies.
More important for consumer goods, and other goods and services, are the people who produce them. Who are mostly constrained by their costs: the prices they pay to their suppliers.
But mostly, it's the Fed. And in the long run, only the Fed.
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The Fed merely serves the financial industry.
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The Fed merely serves the financial industry.
Agreed.
Rather than providing currency with stable value, holding accountable financial institutions which are incompetent and/or incompetent, etc.
It is NOT cryptocurrency. It is MINING cc! (Score:2)
The problem does not lie within cryptocurrency, but is precisely the same as with the Dollar: The fact that anyone can just create or destroy it out of thin air (and manipulate its worth with it).
For the Dollar, you this is happening e.g. with debt and with valutions / stock trading.
And for the Dollar, this is "solved" by some government entity counter-steering to keep some vague stability. There is no reason that couldn't also be done for Bitcoin.
Of course it is still fundamentally fallacious and broken. I
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> The fact that anyone can just create or destroy it out of thin air
Actually, depends on the cryptocurrency - one of the selling points of Bitcoin was that you *couldn't* do that. Early on the protocol called for the operators of the network to be rewarded with "bounties" for their contribution (adding new transaction pages to the ledger), but those bounties diminish over time until disappearing entirely, at which point the total amount of Bitcoin is non-increasing (decreasing in practice, as people for
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> Of course it is still fundamentally fallacious and broken. IMHO even by design, as it allows inflation, aka the washing of money from your salary to some imaginary money gambler's pocket.
It doesn't "allow" for inflation, it compensates for it.
Currency is a proxy for value, and value takes the form of labor and goods. As the quantity of goods increases, and as more labor is performed, you *need* more currency to match or either it deflates to the point of uselessness, or you literally can not have a fun
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A good summary: https://mises.org/wire/bitcoin... [mises.org]
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Moving from the left hand to the right not creatio (Score:1)
> The fact that anyone can just create or destroy it out of thin air (and manipulate its worth with it).
> For the Dollar, you this is happening e.g. with debt and with valutions / stock trading.
Actually, me loaning you money doesn't create new money - it just moves the money from my hand to yours. Same with buying and selling stocks (or carrots or anything else) - when you get $5 selling a stock, that's because somebody else spent $5 to buy it from you. The money just moves from their hand to yours.
* for political purposes (Score:2)
That should say:
In other countries, governments have seriously fucked up the economy by creating too much money FOR POLITICAL PURPOSES
What those politicians didn't realize, apparently, was that it's not free money - the economy responds immediately and without mercy. Even a slight hint, an offhand remark by the Fed chair hinting that they might slightly loosen the money supply in a few months, has immediate economic impact. That's because even people's expectations about the possibility of having more dol
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No different than trading stocks. You can make some money or lose it. Don't give me that BS about owning a piece of the company either. If you own a share of Apple does that mean you can wonder around their headquarters or sit in board meetings?
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No different than trading stocks. You can make some money or lose it. Don't give me that BS about owning a piece of the company either. If you own a share of Apple does that mean you can wonder around their headquarters or sit in board meetings?
How exactly is that BS? Of course you can't show up at Apple if you own a share. If you own 25% of outstanding shares, they will listen. That is human nature.
And absolutely you own part of Apple. When they declare a dividend you get that dividend multiplied by the number of shares you own. If Apple gets purchased, you get either new shares in a different company or you get money. That's a lot different from Bitcoin.
Have you gotten a divided from Bitcoin? No?
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I have gotten profits from Bitcoin as well as other currencies.
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I have gotten profits from Bitcoin as well as other currencies.
Ok, I see you don't understand what a stock is. I'm glad you've made profits. Good for you.
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Plenty of people buy less than legal items with it. It's working well in that regard.
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Yeah... (Score:2)
Ok... (Score:1)
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Bitcoin's value is rooted in it being beyond the reach of governments
FTFY
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So essentially it's good for 2 things then: pump-and-dump scamming of gullible people, and criminal money laundering.
Neither of which are remotely ethical nor legal.
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Also, secure international wealth transfers without government, bank, or cartel intervention.
The thing was invented (or at least marketed) as an end-run around the rapacious fees and restrictions those institutions imposed, and on those grounds it does deliver (or at least it did for a while, I haven't followed it closely in quite a while). If you're working in the U.S., and want to securely send money back to your family in China, Africa, Mexico, etc. without the banks taking a 20-50% cut, or trusting bla
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Admitting ignorance is no reason for anonymity, it's one of the most valuable things a person can do.
As for why it's the best option - because we're talking about fees, not legally owed taxes. Though admittedly if there's legal restrictions on transferring wealth it can still be an end-run, if you go to great enough lengths to protect your anonymity.
Paypal's not an option for most people, because it requires a bank or credit card - which most people in the world don't have. Many may not even be within an
Re:Ok... (Score:5, Insightful)
>Gold at least has an inherent value.
Yeah, but it's price doesn't reflect that at all. Its inherent value is as a conductive corrosion-resistant material, and a soft metal for fine jewelry work without stron tools. It's not worth anything remotely like $1500/oz for that, and it's pretty much worthless for everything else.
Gold's market price is pretty much based entirely on speculation on a relatively useless thing that people for some reason think is valuable. Just like Bitcoin.
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Trade volume says nothing about inherent value. There was a time when tulip bulbs were widely traded in Europe, with some individuals trading entire mansions and estates for a few bulbs. Does that mean that the bulbs had an inherent value equal to the estate? No, of course not - it just means that some people convinced themselves that they were going to be able to find a bigger sucker to sell them to at a profit. I could draw some parallels to a whole lot of stocks being traded heavily at valuations far
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Well, no, it doesn't. It makes pretty jewelry, and it has some manufacturing uses, but those uses don't come close to supporting its market price. Gold is valuable because it's valuable. In fact, you don't want your medium of exchange to have inherent value, because then fluctuations in the market for its substansive uses interferes with its function as an exchange medium.
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The value of Bitcoin can fluctuate as much as 40% in a single day. What sane person would use something that volatile for currency? You would be better off bartering with tulip bulbs, as they seem to have a more stable value from day to day.
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Bitcoin's value is rooted in being able to conduct semi-anonymous transactions.
Every transaction is recorded publicly. Bitcoin is not anonymous, and was never designed to be.
Neither do I of the dollar. (Score:2)
If anybody can just make it up with a "valuation" or "you owe me $x", and it takes trickery and cheating so I have even the samy purchsse power the next day when I wake up, it's not something I'll put my trust in.
My work will always be worth exactly that amount of work. If a farmer takes n days to grow his potatoes and I take n days to build his house for him, then he can pay me n days worth of potatoes for those n days worth of house building.
Work is the only valid universal currency.
(The catch lies in sta
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How do you account for the fact that a person may invest time into developing a skill? If it takes the farmer two years to learn how to farm, but it takes the carpenter five years to learn how to build houses, why would anyone build houses rather than farm, if the income only counts hours worked, and not time invested in learning a skill?
Honestly asking rather than trying to push a point of view here, as I am interested in ANY alternatives to our current broken system that actually might work in the real wo
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>why would anyone build houses rather than farm
Because not everyone wants to be a farmer. And not everyone owns enough arable land to be worth the effort.
This is a bit utopian and probably wouldn't work in (today's) real world, but... imagine a world where everyone gets paid $X per hour of "hard work equivalent" (to discourage slacking - e.g. if you take four hours to do what the average person does in one, then you still only get paid for one hour of work) . And that includes learning skills for under-
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Fascinating, thanks for taking the time to explain your ideas. Your first idea sounds similar to Time Based Currencies: https://en.wikipedia.org/wiki/... [wikipedia.org] which have been implemented in several forms in many places, dating back hundreds of years.
As for gift based economies, pairing the idea with some sort of social credit system seems very workable, provided the social credit system was distributed rather than centrally controlled. Something like Doctorow's Whuffie system, maybe. https://en.wikipedia.org/wik [wikipedia.org]
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Completely ignores that some work is more difficult than other work, some is more skilled.
If for every 10 people that can grow potatoes you have only 1 that can build houses, and you want a house build, your probably going to need to offer better than 1 to 1 ratio of labor.
Re:Neither do I of the dollar. (Score:5, Insightful)
And I am a better programmer than the farmer, but the farmer is way better at growing food that I could ever be. It is more efficient to do the tasks we are best at.
The farmer doesn't directly need my software, but I do need vegetables.
If only there was some medium of exchange we could agree upon...
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The farmer doesn't directly need my software, but I do need vegetables.
If only there was some medium of exchange we could agree upon...
Real Programmers don't eat vegetables. If they need a medium of exchange, they can use Proof of Steak.
The difference (Score:2)
Gold is useful for everything from dentistry to electronics, and it's pretty enough for jewelry too. Bitcoin is useful only for criminals who think it'll help them launder money from their ransomware and drug deals. The latter is is a more valuable use at present, but is subject to technical de-anonymization and legal crack-downs that could eliminate all the value almost instantly.
Re: The difference (Score:2)
Really? Cause I've bought food and plane tickets with Bitcoin. Seems to have a legitimate use to me.
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it is whatever is most expedient (Score:2)
The goal of the people who own the most Bitcoin is to monetize it into fiat currencies. To do this they need new bagholders (I mean investors). The starry-eyed, true-believing Moonboys who invest a few bucks from their meagre paychecks are the marks. Most volume is faked (bots wash sales and tape painting) so the only way to get real money out of their vast bitcoin holdings and to support miners is to entice new money into the fold.
Sastohi initially saw it as digital cash (most assuredly a currency). The ti
Re: it is whatever is most expedient (Score:2)
It will become (or has already become) the world's reserve cryptocurrency. The cryptocurrency market has been bullish for at least a decade, so if it's a pump and scheme, it's a very slow burn scheme.
Another way to put it is all securities seem like pump and dump schemes if you buy and sell at the wrong time.
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It will become (or has already become) the world's reserve cryptocurrency. The cryptocurrency market has been bullish for at least a decade, so if it's a pump and scheme, it's a very slow burn scheme.
Another way to put it is all securities seem like pump and dump schemes if you buy and sell at the wrong time.
I mostly agree with the first part. Bitcoin is already the world's reserve cryptocurrency. But that's a bit like saying Beanie Babies are the world's reserve plush toy.
Disagree on the pump and dump. A traditional pump and dump would be a big mistake for the whales. They need so be careful to not take out too much at once and crash the whole thing too hard. They need to bleed the golden geese (hodlers), not kill them.
Bitcoin is quite different from most securities in that there is nothing securing the asset.
Re: it is whatever is most expedient (Score:2)
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Stopped reading after "Facebook's" (Score:2)
David Marcus, the head of Facebook's
Woah! Somebody from Facebook saying something? Gonna stop reading right there.
It isn't. (Score:3)
In the same way that a cult isn't a religion - time and numbers. It could fit the role eventually - but I honestly don't think it will.
Why? It's basically got the same issues that company scrip.has.
https://en.wikipedia.org/wiki/... [wikipedia.org]
When you have a small organization outside shared governance creating and formulating a token for the sake of matching the description of a 'currency', who does it for the sake of creating a space for themselves in that exchange and managing said currency.... even with the greatest of intentions, the clever limitations placed on it are going to add a 'shape' to the way it trades.
That 'shape' is to me what makes it unlikely for them to become a general currency. Sure, it's nice for underground markets that want to AVOID general currency - but there's a friction to adaption over time that means its going to either be stuck or subsumed by a better copycat at some point.
Yes - something LIKE a cryptocurrency will become a future currency at some point. Honestly, I don't expect it will really be a cryptocurrency though - just the same techniques used to tokenize the exchange of other resources.
Why? Well, all markets have inefficiencies. their own forms of blindness, and biases in the way that manipulation can be done - and indeed, Bitcoin WAS designed to play around much of these. Most markets try to minimize these things. They're all kind of trading on trust.
Some one's going to connect the dots at some point, and work with a government to make a system of exchange where the ideals of the 'gold standard' (which Bitcoin was trying to tap into), aren't limited to a single token stream - but the tokens are used to represent trust in all the 'hard resources'. Not just in the 'stock exchange' sense, but in the on-the-street hand someone something sense too.
Who knows how stable that will eventually be - but I think that's the kind of thing that will subsume the same role that BitCoin was formed to play. That 'cowrie shell' role of psuedo-finite trade token.
https://en.wikipedia.org/wiki/... [wikipedia.org]
For now though, cash is still king, for being the better portable cowrie shell I can carry without asking permission from a company to do so.
Ryan Fenton
Bitcoin is the ultimate Sound Money (Score:2)
Bitcoin is the only digital asset genuinely scarce.
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Bitcoin is our only change to have sound money again!
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Yeah, except if I buy something with gold, I receive the purchase immediately.
If I buy something with bitcoin, I receive my purchase somewhere between "a couple of minutes" up to "almost a week"
Useful currencies require immediate transactions.
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Bitcoin is not a payment system. Lightning, is the payment layer of Bitcoin, and Lightning adds instant payment.
what really give currency value (Score:1)
you have to pay taxes with it.
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A Quote: 'United States of America be one dollar, but did not yet determine its silver content. In 1786, the Congressional Board of Treasury calculated that the "Money Unit or Dollar will contain three hundred and seventy five grains and sixty four hundredths of a Grain of fine Silver,"'
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you have to pay taxes with it.
"You can buy things with it" would be more accurate. Until I can actually buy things at the store and pay my bills with a "cryptocurrency" it has no value to me. Yes, there are extremely rare cases where some of those things might be possible for some people, but I'm talking about right now, every day.
you can pay for OTHER things... (Score:1)
... because it already has value. It already has value b/c the government requires you pay them with it.
It doesn't magically have the trust of people... the concrete value of a currency is that the government takes it for taxes. Everyone needs a basic amount of them greater than zero.
The libre advertising begins on /. (Score:2)
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Welcome Libra in the "You are the product..." game...
Fiat money and negative rates vs Bitcoin (Score:1)
FIAT money is advantageous for some countries. Because the interest rate can be set to a negative value. This is a way to use the money as a taxation media.
Bitcoin is genuinely scarce, nobody can increase the supply of Bitcoin. When the supply of a money is constraint, the money is not compatible anymore with negative interest rates.
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The Euro is doomed to extreme negative rates.
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At the end, people will have unproductive jobs, generously paid using a worthless money... A wonderful future, using central banking to get soviet union v2.0.
Lol, fuck, sure. (Score:2)
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If you had gold from the first smelting of six thousand years ago in Syria, it would still have value and could be cashed in.
Guess what bitcoin will be worth tomorrow? who knows...
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No, oldest gold artifacts in Andes are from 2000 B.C. and later
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I don't think of Bitcoin as currency either (Score:2)
It's more of a giant Ponzi scheme.
Network effect (Score:2)
Currencies and Social networks share a property. They become more valuable as more people use them.
Facebook has a proven track record on driving social network adoption.
If they can make people adopt their crypto in the same numbers it will be the most powerful currency in the world
Libra is the ultimate tool to collect data (Score:2)
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Libra will be a competitor of banks, optimized to collect any data, and to remove any privacy.
Bitcoin is the improvement of the 'Gold Standard' (Score:1)
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What nonsense, a gold coin from a thousand years ago will still have value today; bitcoin will not endure. Gold did not fail, I think would be silly to own some but if I did I could still cash it in.
Bitcoin has plenty of points of failure, ask anyone who lost their wallet or was scammed.
Bitcoin is a penny stock, trading on nothing but the three H's of hope, hype and hooey. It could go to zero tomorrow on certain types of news. It is illiquid and has a poorly designed architecture. It wastes energy.
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The Gold Standard was easily defeated. An article trying to understand the reasons: https://medium.com/@festina_le... [medium.com]
When you want to be your own Bank, you must take the process seriously. Losing the wallet, or falling for scammers; You need to put yourself in question.
Bitcoin is sound money, and Bitcoin is a free market money. A free market m
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Bitcoin can and has been made illegal in places too, effective confiscation.
Bitcoin is NOT sound money, do you even know the definition of money? It is not liquid, is not a store of value, is not generally accepted nor a legal tender.
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Bitcoin is sound money, because nobody can't increase the supply. Bitcoin is not 'elastic' in supply like our FIAT currencies. Legal tender is for FIAT currencies. Bitcoin is already liquid enough.
The Gresham's law (bad money drives out good), is a good reason to always use FIAT first. So adaption as a medium of
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And the "confiscation" of which you speak, citizens were paid the fair market value for their gold. It was not stolen without recompense.
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inflation is a normal and expected process in any growing economy, see econ 101. That is not confiscation.
What do we call bitcoin going from $18K to 6K in two months? Confiscation from the bagholders by the pump and dumpers...
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Bitcoin is volatile, and Bitcoin is still small; This will improve over time. And people like volatility to the upside (not the downside...).
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there is zero evidence bitcoin volatility will improve over time.
It is laughable to compare it with anything used as money; it is merely a gambling game token with unreliable value.
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Nothing as unstable as the gambling token that is bitcoin could possibly fill any niche other than reckless gaming.
It can't be here to stay, the fundamentals are rotten. No one has to use it, it is illiquid and is not a reliable store of value. Its days are numbered. When the casino closes, the chips are worthless.
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What nonsense you spew, bitcoin's value is all over the board in short time period, it truly is worse than anything else. You are stupid to use it, your choice
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A good article, if you want to learn about Bitcoin.
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