I would expect to see a surge and then a rapid drop off, but I think we've been in the surge for a while now. The surge reflects people not having faith in native Chinese markets, which has already been the case for most well-off, well-informed Chinese. They know their stock markets are a joke and that the government has been driving investment toward pointless building projects. The real estate market has been irrationally exuberant, in no small part because of the absence of alternative long-term savings vehicles such as interest bearing accounts or a reliable stock market. They also don't have complete faith in their government's respect for property rights and know having the option to flee abroad if things go south is invaluable.

And the PRB has been slowly ratcheting down the markup they pay on US dollars as an export subsidy, so the incentive to convert US dollars to renminbi relative to offshoring earnings via bitcoin or other channels has been declining over the past few years. Just to clarify what I mean because a lot of people don't realize this, but many Chinese exporters receive payment for goods in US dollars (or other foreign currency). The People's Republic Bank of China (their central bank) purchases those dollars with renminbi at a markup over the fair market value, basically giving the Chinese exporters a subsidy. That's part of why the PRB has such enormous US Treasury holdings. They bought so many US dollars that they couldn't invest them in anything other than US Treasuries. A billion dollars in cash is an asset. A trillion is an unmanageable inflation risk.

The PRB has been trying to move away from that model because they know it isn't long-term sustainable. So as that implicit subsidy declines, Chinese manufacturers receiving US dollars find alternative methods for converting their excess currency, such as BTC or other foreign currencies (e.g. the Canadian dollar), relatively more attractive.

The bottom line is that anyone who can afford to expatriate their capital has been doing so at the maximum viable rate for a long time now. A slowdown would simply reduce the amount that is available to expatriate, decreasing the US dollar -> BTC purchases and accelerating the BTC -> hard foreign assets such as real estate, reducing the total market cap for BTC. It's also possible the PRB might react to a slowdown by once again increasing the implicit export subsidy, which would divert funds from BTC transactions back into renminbi and further accelerate a crypto crash.

Increase in production increases supply, so prices fall -> deflation.

Yes, inflation can have other reasons than debasement (for example, productivity decrease) but this affects both types of "money" - fiat and bitcoin, so I left it out to keep it simple

Milhouse: I'm really sorry... I kind of traded your soul to the guy at the comic book store. But look! I got some cool pogs:

[shows them]

Milhouse: Alf pogs! Remember Alf? He's back... in pog form!

https://www.reddit.com/r/OutOfTheLoop/comments/3dyh6j/what_i...

https://en.wikipedia.org/wiki/Pogs namesake of https://en.wikipedia.org/wiki/POG_(drink)

yeah but it obviously takes less risk to invest in Apple in 2015 than 1978

If we look at the past 10,000 years of history - commodities are useful things, objects with utility. Currencies are commodities which people begin to favor for use in trading. Currencies are commodities which have properties that make them good currencies - they have properties such as uniformity, durability, divisibility, portability. This is why precious metals like gold have been favored as currencies through history - gold is uniform, durable, divisible and portable.

The paper dollar bill is, and always has been, completely worthless in and of itself. It is just a piece of paper. Just like Confederate bills were and are pieces of paper, just like the Papiermark was and is a piece of paper. US bills have a history, just as German bills do.

In 1914, the German Mark, or "Goldmark" was redeemable for gold. The Mark/gold link was broken in 1914 and the Mark became the "Papiermark". By 1923, hyperinflation had made the Papiermark near worthless and it was replaced by the Rentenmark and then in the next year this was replaced by the Reichsmark.

Swinging back to the USA, the words "redeemable in gold" were removed from the hundred dollar bill in 1934, and then by 1971 Nixon had closed the gold window entirely. Sort of. Because if he really had, he could have just taken the thousands of tons of gold in Fort Knox and paid down the US debt. But he couldn't. Because that gold still backs the dollar. The dollar was an abstraction of gold before 1934 and 1971, a promise. Then it became an abstraction of the abstraction. It's still on some level backed by the gold in Fort Knox, Trump and the Fed chair could just reopen gold/dollar reconversion if need be, and a hard floor would suddenly appear under the dollar.

Bitcoin has no such floor. There are no thousands of tons of gold waiting in the wings for Bitcoin, no nuclear armed #1 (going on #2) world economy with the power to tax and receive tax payments backing it. We don't even know who created Bitcoin.

It's an odd argument - the only commodity people can find which has no apparent value is the dollar (or euro), so that's what people compare it to.

If this was 1917, you might be asking me why the Papiermark had worth when it was not backed by something, and thus Bitcoins must have value. What people found out was that the Papiermark unhooked from gold did not have value, as the German government of the time didn't give a damn about its value. It's kind of the same argument - Papiermarks in 1917 had value, so Bitcoins must have value. People found out in the 1920s that Papiermarks didn't have value as the implicit promise of government gold conversion went away.

> China...government restrictions on expatriating capital, crypto becomes a valuable alternative denomination

Money is expatriated via Bitcoin from the PRC to, say, Vancouver. The point is that with a currency, people would be comfortable leaving it as Canadian dollars or US dollars. This is not what happens though, the Bitcoin is converted to Canadian dollars, and is then perhaps converted into other things, such as real estate.

It is more like a concert ticket or gallon of milk in this case - something which might be valuable for a time, but then loses its value. The Papiermark in the early 20s could be used to move money around as well.

Your statement indicates that you don't know what a pyramid scheme is, or that you do and you're expanding its definition to generalize its negative connotation to something else that doesn't fall under the proper definition of a pyramid scheme.

A company using credit card technology in combination with bitcoin and other cryptocurrencies is simply leveraging existing technology interfaces for companies that want to accept cryptocurrency without said companies having to deal with alternative payment systems. The payment system handles everything related to the cryptocurrency and the payee simply sees the USD (or other fiat currency) value in their accounts.

No one needs to prove you anything. You are free to believe what you want. The world doesn't have the responsibility to convince a stranger of a concept s/he hasn't taken time to read or finds too difficult to understand.

I would encourage you to read more about cryptocurrencies and how it has massive disruptive potential. Here are a good set of articles to get you started: https://thecontrol.co/some-blockchain-reading-1d98ec6b2f39

Where are the victims?

> No one loses multiples on their investment.

Leverage is a multiplier in both directions. People do borrow money to invest in bubbles which is what can make the eventual pop so economically devastating.

It is generally a portfolio investment approach in which you would invest in multiple coins in the hopes one of them gains 100x and you lose your money in the rest. If you think it is so easy and there are only gains to be had, why don't you go ahead and make a few investments and come back with results?

Deflationary is not a bad thing at all - though I realize that most of mainstream economics thinks it is.

A few thoughts on that:

- Real wages rise when the currency deflates (good for working class, think about the effect of wealth inequality)

- Debt becomes a problem (bad for indebted, such as government)

The main official reason why deflation would be a bad thing is that it discourages spending. I think it discourages non-necessary spending. People will still eat, they just wait a few months more to buy their TV. However, they can buy more TVs now or other things because they have more disposable income.

I don't think forcing people to spend is in any way a good thing, neither economically nor ecologically.

But enough of this, I want a non-inflationary currency to save in. If there are enough of me, that's sufficient to make something "have a value".

Re the public transactions, I assume that sooner or later it can be tracked to a high probability. However, I also think this is the case with other non-cash transactions, so while it's not relatively better than fiat in that sense, it's still not worse either. For me that's ok since I'm not in the money laundering or tax evasion business.

I think I can answer your question, because I asked an identical one on bitcoin.stackexchange.com about a year back.

The transactions are public because that's the only way account balances can be tracked in this system. There's no 'amount' associated with an account id at any point in time, as there is for a banking database. In Blockchain, all the money an account has to spend is the net of the transactions made to and from that account. In traditional banking, even if you deleted the transaction history, it would work, because the account balances would be correct. This incentives people to fudge the history and the final balance via fraudulent transactions. Blockchain prevents that, since it never stores the balance, and old transactions are set in stone.

As to your second point, yes, mapping the wealth is possible. But so is obscuring the account holder's ID. To get your money, you just need a private key, a little string of characters, to verify that account. Also, account creation is incredibly easy (literally just a function call returning a 256-bit hash). So, no one knows who is who on the network. Some transactions may go from a person to themselves, others may go from a person to another for services rendered. It's basically impossible to tell once the transaction volume grows large enough.

You might be interested in learning about Monero. The amounts and transactions aren't public like Bitcoin.

Here is a pretty good infographic outlining the gist of it: https://www.monero.how/monero-infographic

Luck has nothing to do with that. Thanks for trying. Still hope someone can come with a better argument. But I follow bitcoin new since a few year and still nothing tangible in sight.

Some like you find my lack of faith disturbing, but I don't "believe" anything. I prefer scientifical skeptiscism.

PS: And because I am ready to change my mind, I've dug : https://www.reddit.com/r/Bitcoin/comments/5lsu8p/hot_news_fi...

Still no arguments, only bitcoin supporters performing ad-hominem attack against the analyst...