Libra

Discussion in 'Off-Topic Discussions' started by Kizmet, Jun 19, 2019.

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  1. Kizmet

    Kizmet Moderator

    Kizmet, Jun 19, 2019
    #1
  2. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

    You and me both. Being centrally administered, it's not even really a cryptocurrency anyway.
     
    SteveFoerster, Jun 19, 2019
    #2
  3. Johann

    Johann Well-Known Member

    Johann, Jun 19, 2019
    #3
  4. John Bear

    John Bear Senior Member

    The Safeway across the street, here in Berkeley, has a Bitcoin vending machine. I tried to buy a dollar's worth. 20 minutes later I was told I now needed to mail (!) a certified copy of my driver's license to an address in Colorado. Here ends, I think, my attempt to enter the new age.
     
    John Bear, Jun 21, 2019
    #4
    Maniac Craniac likes this.
  5. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

    I'm sure they didn't want to do that, but unfortunately financial anti-privacy regulations can be pretty onerous.

    PM me your wallet address and I'll send you a dollar's worth, if you like.
     
    SteveFoerster, Jun 21, 2019
    #5
  6. nosborne48

    nosborne48 Well-Known Member

    I'm so confused about cryptocurrencies in general and bitcoin in particular. I just do not understand why bitcoin should have any value at all. I guess I understand the attraction of blockchain and I get that there is a limited number of bitcoins and all that but none of that strikes me as sufficient reason for anyone to accept bitcoin in payment for anything. Dollars have value, for example, because they're legal tender and because I need dollars to pay my taxes. Bitcoin has neither use. I need to change any cryptocurrencies into dollars to use them and that's a taxable event. Bitcoin really isn't a currency at all as far as I can tell. Like gold, it's just a vehicle for speculators and depends on the "next greater fool" to have any worth at all.

    I really don't know. Clearly there's a market for this (to me) fantasy so maybe smarter folks than I am see what I don't see.

    Or...maybe not.
     
    nosborne48, Jun 22, 2019
    #6
  7. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

    Gold has thousands of years of track record of holding its value. Fiat currencies have a hundred or so years of track record of not holding value well at all. That's a very flattering comparison, not an unflattering one.

    Maybe not. But people have been predicting its demise for over a decade now.
     
    SteveFoerster, Jun 23, 2019
    #7
  8. nosborne48

    nosborne48 Well-Known Member

    Why not just buy gold, then?
     
    nosborne48, Jun 23, 2019
    #8
    Maniac Craniac and Kizmet like this.
  9. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

    People who just want a hedge might want to do exactly that.

    But they're not quite substitute goods. Precious metals are much more difficult to use for international transactions, and they doesn't form the basis for other financial services that can sit on top of cryptocurrencies (like STOs, etc.). Well, at least for now, there's a project called AnthemGold to try to combine the two concepts in one.
     
    SteveFoerster, Jun 23, 2019
    #9
  10. nosborne48

    nosborne48 Well-Known Member

    Well, someone, Warren Buffett maybe? said that he never invests in anything he doesn't understand well enough to explain in simple language. I can't explain bitcoin even in complicated language so I think I'll just stay away from it.
     
    nosborne48, Jun 24, 2019
    #10
  11. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

    Hey, I'm not trying to change your mind.
     
    SteveFoerster, Jun 24, 2019
    #11
  12. Johann

    Johann Well-Known Member

    I view ANYTHING that comes out of the Facebook vault with extreme suspicion. I quit them about 12 years back and I'm just not having any.
     
    Johann, Jun 25, 2019
    #12
  13. nosborne48

    nosborne48 Well-Known Member

    Well, if I read it right, the Facebook currency will have some national currency reserves behind it. That is a very tricky business, though. It could end up triggering all kinds of regulatory scrutiny and a Mt Gox scenario could end up costing the company more than they had bargained for. Then again, the reserves should discourage bear runs.

    It's also interesting because so many fans of crypto currencies seem to me to have a more solid grip on the technical aspects than they have on the principals of money, banking, and finance. The inclusion of reserves suggests to me that someone has thought pretty carefully about the whole project.
     
    nosborne48, Jun 26, 2019
    #13
  14. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

    Withering regulatory scrutiny started the day they announced the project. Here's the latest: https://finance.yahoo.com/news/maxine-waters-wasnt-kidding-facebook-163924591.html

    That's probably one of the reasons it was a skunkworks project for so long.

    Enh, maybe. As I understand it, they're only planning to hold a 10% fractional reserve. And they haven't said under what circumstances, if any, someone holding Libra can exchange it for the underlying asset, and backing doesn't mean much without that.

    I could introduce you to some people who have been interested in crypto for a long time who disabuse you of that notion. If anything, the technology was developed to realize the vision, so while it's interesting in its own right, it was only a means to an end.

    On that I agree completely, I doubt this much effort was put into the project, and such a collection of partners was put together, without an awful lot of thought.
     
    SteveFoerster, Jun 26, 2019
    #14
  15. nosborne48

    nosborne48 Well-Known Member

    Well, for example, now that Bitcoin futures trading is a reality, what will protect the value of Bitcoin from a concerted bear attack? Fiat currencies of more troubled countries (like Argentina) have collapsed under such an assault even despite the various currency supporting devices available to a sovereign government. Bitcoin having any market value at all depends only upon "consent" which is nothing more than "market price". What would keep a bear run from reducing Bitcoin's value to zero? This happens to listed stocks rather often. Why shouldn't it happen to a crypto currency?
     
    nosborne48, Jun 26, 2019
    #15
  16. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

    SteveFoerster, Jun 26, 2019
    #16
  17. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

    There's some suspicion that that's what "crypto winter" was (the long period of relatively low price after the high water mark at $20K 18 months ago).
     
    SteveFoerster, Jun 26, 2019
    #17
  18. nosborne48

    nosborne48 Well-Known Member

    Even gold suffers from futures attacks. Many years ago gold was well under $500/oz having lost half of its then value. The article was interesting but again, I didn't see where finance people (as opposed to Austrian School economists) had anything to do with it. Let me pose a different question: How can the Bitcoin structure guarantee a limit on the total bitcoins in existence? Is there some mechanism that forbids fractional reserve deposits and lending? If there is not, the number of bitcoins in circulation will become much larger and very hard to determine. Overall, the lack of regulation makes me leery. We've seen this sort of thing before. Often. Very often and frequently with devastating consequences to society as a whole, most recently in 2007-8.
     
    nosborne48, Jun 26, 2019
    #18
  19. Kizmet

    Kizmet Moderator

    Kizmet, Jun 26, 2019
    #19
  20. nosborne48

    nosborne48 Well-Known Member

    But it IS all interesting stuff, don't you think?
     
    nosborne48, Jun 26, 2019
    #20
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