Is This Why Bitcoin Will Self-Destruct?

Forensic economics for breakfast today.  If any of this makes your head hurt, Ure right, it should probably have been put on our Peoplenomics.com subscriber site.  We’re putting it up here because we really don’t wish to be right in our outlook.

Let’s start up with a few basics:

  • The big selling point of Bitcoin (in the beginning) was that it would be “honest money.”  There would only be some finite number of coins created.
  • The total number of BTC that will ever be created is 21-million.
  • In the beginning, the whole concept of “mining” was that outside organizations would be able to use BTC resource to scour the internet and solve problems, do research…
  • But, that quickly evolved into just finding other miners in order to “confirm transactions.”

This last has been pretty damn slow.  Here lately (and check me on this) the median (half above, half below) time to get a “confirmations” has been running about 12-minutes.

Not our idea of a valid currency for mass use!

What keeps Bitcoin mining alive is that miners are finding a new coin about every 10-minutes, or so.  Good for them:  BTC’s are right around $8,000 apiece right now.

The pieces that most people fail to assemble and ask the logical question about goes something like this:

  • Bitcoin miners are paid Bitcoins for confirming transactions as well as “mining” new coins.
  • Mining new coins is generating over $1-million a day of Bitcoins.
  • But, totally central to the generation of “the network” is all the miners…

Now come the difficult questions – and hopefully, there is an expert on BTCs who can set us straight by answering a simple question.

But, before asking, one more data point to ponder:  Bitcoin mining is consuming climate-impacting levels of energy.  As The Economist noted in an article (a year ago) “Why bitcoin uses so much energy“::

“BITCOIN has been alarming people for years because of the amount of electricity needed to mint new virtual coinage. Alex de Vries, a bitcoin specialist at PwC, estimates that the current global power consumption for the servers that run bitcoin’s software is a minimum of 2.55 gigawatts (GW), which amounts to energy consumption of 22 terawatt-hours (TWh) per year—almost the same as Ireland. Google, by comparison, used 5.7 TWh worldwide in 2015.”.

Electricity is not free.  And yes, making it causes “climate change” so either a) a person who uses BTC is anti-environment or b) doesn’t believe in climate change.  Only the most screwed-up, insanely confused person would pretend to have it both ways.  (What was Spock’s StarTrek line?  “That wouldn’t be logical, Captain…:”),

OK, 22 TWhrs per year is too big for me to deal with, so let’s convert that down to kilowatt-hours, shall we?  Conversion factor?  

In engineering notation, we just as 9-zeroes on the end of 2.2 for a total of 22,000,000,000 (kilowatt-hours).

And we know the price of energy is at least 10-cents and more like 20-cents a kilowatt-hour.  We’ll use $0.15 (15-cents) as a middle ground…which is probably low.

Which means (22,000,000,000 times $0.15) is $3.3-BILLION dollars per year.

The “terrible Truth” the coiners don’t tell their tulip purchasers is that when the last coin is mined, in order to keep the “network” alive, each bitcoin would have to contribute ($3.3 billion/21-million coins) which we pencil out to be $157.142857 per year, PER COIN to keep the network at present (12-minute median T-time) performance levels.

And It Gets Worse

As near as we can figure it, there are only a couple of “ways out of the box” for people who hold bitcoins when the last one is mined.

First, the transaction fees will have to fund that $3.3 billion power bill…but that’s before the miners get something for their overhead and warehouses full of ASICs.  Let’s say the miners will need at least as much money to remain online as the power bill.  Suddenly, the “keep-alive cost” of the network becomes $157 X2 per year ($314 per coin).

So, what is the total value of $8,000 Bitcoins today – if all of them had been mined?  $168-billion is the right answer.

With no money from mining, and likely transaction costs of $314 per coin), we don’t see how Bitcoin makes any sense.  Either, a transaction charge of $314 would have to be loaded into the BTC purchasing power, OR there would need to be another kind of “tax” invented to keep the system going.

Any way we penciled it out, the overhead of BTC, in our view, will require a 3.9 percent overhead adjustment (tax on use) when mining hits the 21-million level.

Ure’s Axiom #523:  Is it Nakamoto’s oversight failing to ask “Who pays to keep the network up after the mining is done?”

So, how many Satoshi’s is it to buy a free lunch, these days?

This may answer some important questions that have confounded us:  “Why aren’t the  Central Banks attacking this upstart nuevo dinero right and left?  Could it be they too have considered the BTC business model deeply and see the brick wall up ahead?  With an ibid and some ditto’s for the FedGov as well….

I have circulated this question to some very knowledgeable colleagues who are right out there on the edge of the ‘net.  They’re not finding a hole in my logic, so…  Let’s see how many answers we get.

Stick to answering the question in your reply:  Explain where the money for the post-mining overhead comes from  and how that works without either a per BTC fee or transaction tax to fund the network.  Thank you.

We now return you to our daily dose of…

Financial Ga-Ga and Blah-Blah

NFIB small business survey is just out under the banner “Small Business Optimism Roars Back, Rivaling Historic Highs” and details like this:

Capital Spending, Expansion, and Sales Expectations Drive a Solid Performance:

WASHINGTON, D.C. (June 11, 2019) — Small business optimism eclipsed pre-shutdown levels, increasing 1.5 points to 105.0 in May. Six components in the Small Business Optimism Index improved, three were unchanged, and one dipped. Capital spending plans increased along with actual outlays. Small business owners’ expectations for sales, business conditions, and expansion all rose, as the previously reported inventory imbalance was resolved. Earnings, job creation, and compensation remained very strong. “Optimism among small business owners has surged back to historically high levels, thanks to strong hiring, investment, and sales,” said NFIB President and CEO Juanita D. Duggan.

What makes this an interesting report is that the last ADP hiring report showed most of the new job growth was in big companies.  With he strength of this report, we are beginning to think in terms of our summer rally to late August and major decline this fall could be the way the ball bounces.

Next we have Producer Prices from Labor:

“The Producer Price Index for final demand rose 0.1 percent in May, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.2 percent in April and 0.6 percent in March. (See table A.) On an unadjusted basis, the final demand index increased 1.8 percent for the 12 months ended in May.

In May, the rise in final demand prices is attributable to a 0.3-percent increase in the index for final demand services. In contrast, prices for final demand goods declined 0.2 percent. “

(Any cardiologist would spot the change in the QRS complex here, lol!).

After the data, the futures were still on blow with futures up over 150 on the Dow side.  As a Zero Hedge piece explains: Blain: “The Market Is Once Again Sucking Everyone In”.

We do worry when we see headlines like “They Don’t Have A Clue” – Trump Blames Fed For Strong Dollar, Says Interest Rates “Way Too High”.

Blather and Splatter

Incoming!

Factbox: U.S. companies warn Trump’s tariffs could hit results.  Meantime, while brinksmanship seems to have worked with Mexico, don’t count your migrants yet: Trump administration hopes Mexico can tighten Guatemala border.

And for Cupertinians: Apple Has a Backup Plan If the U.S.-China Trade War Triggers iPhone Tariffs.

Stunning Monet unseen for 87 years eyes $44.6 million auction.  I wonder if Elaine could do a knock-off?

The spies are everywhere:  Latest? MI5 criticised over ‘unlawful’ use of data gathered.  In case you didn’t know, the spy agencies listen-in on every, all the time.

Say you make a call.  The call routes (via fiber) through Menwith Hill or Alice Springs.  There, foreign nationals can listen-in — and we of course, return the favor at places like The Fort – that home of Echelon in Maryland.  Most of which is under the mega parking lot.  Five Eyes?  Maybe…but don’t even try to count the ears.

If you think Alexa is the  a threat…get the sand out of your eyes and ears…You do know what an “infinity transmitter” is, right?

The dope on Boston?  “Chart: Massachusetts recreational marijuana sales approach $140 million.”

LazyPonics Tomorrow!

Big feature on Peoplenomics tomorrow is our complete deep water culture build for tomatoes and melons.  19 pictures and a complete guide to building a system (and parts list with links).

The server error on our ComputationalFuture site was corrected so that’s back humming.  Maybe time for a nap…

 

63 thoughts on “Is This Why Bitcoin Will Self-Destruct?”

  1. Facebook’s upcoming Globalcoin cryptocurrency is a stablecoin, pegged to the value of a basket of global currencies. To keep it stable, GlobalCoin will be backed by millions in fiat currency. That money will be held somewhere – probably the Federal Reserve – generating interest.

    I am becoming to believe Cryptocurrency is here to stay like perennial tulips.

    Apple has lost it way with their new $999 monitor without a computer. What are they thinking. Tesla may be the new Apple of the Millenials & Telsa stock is cheap. I raised some cash the good way with 2 buyouts CY & DATA so TSLA & Facebook’s Globalcoin may be a consideration. My concerns are Elon Musk & Tulips.

    • The problem with GlobalCoin is that it is just a proxy for a basket of assets – and you can do that with a bond or anything else. Tell me where the value proposition is to a blockchain that doesn’t clear faster than a credit card, and is backed by the same piles of crap we can buy individually. Not seeing the value other than net dependency is up. What is there?>

      • Maybe it will only be backed by 10% & it’s price will fluctuate like a futures contract where you get 10 to 1 leverage. I prefer safety but not $50K in a checking account. That is depression era thinking. Maybe $5k tops.

      • @ecs

        ANYTHING controlled by ‘THEM’ is not save or free….CONTROLLED is the KEY word..( if the futures market for gold and silver were to be dissolved, along with the fed…CONTROL of the price of gold and silver would again be in the FREE and OPEN market place…and then could and should be used as the Constitution REQUIRES….imo

  2. George

    “They’re not finding a hole in my logic, “.

    To be an honest person and a gentleman I have to admit your logic seems sound!

    Up to now I had supported Bitcoin as an alternative currency, not money, as a way to get around dishonest government currency namely federal reserve notes.

    I can no longer hold that opinion because when the mining stops bitcoin stops.

    I still hope that one day an honest currency will emerge that people can use and the government can’t do anything to stop it.

    The citizens of the U.S.A. need a sound monetary system that is not rented from a banking cartel!

    I stand corrected!

      • The ONLY way to get politicians to OBEY the written Constitution…MONEY = gold and silver…is to enact the DEATH PENALTY to any of them that refuse to obey their oath…and get rid of the FED…back to treasury …for the money creation as written….imo

    • The John and Jane Average’s that I talk to never understand:

      The VALUE of gold has not substantially changed in thousands of years.

      I’m not a “gold bug” but sheesh! It’s hard to get more stable or honest than that. Perhaps that’s why the bankster class has spent the last 130 years endeavoring to take every nation on the planet OFF the “gold standard.” Given an honest currency, they can’t steal enough to survive in the manner to which they believe they’re entitled…

  3. No Bitcoin 4 U !

    The energy usage data is based off of WIDE ass assumptions; Economist, Pop Mech, Digieconomist..

    Wrong/BS, way over hyped ala Russian Collusion, Global Warming, G.C.E., original “the Data Center/Internet is going to consume ALL the energy in the world in 10 years”..FUD.

    Top down energy consumption analysis sucks for accuracy, bottom up analysis would be the “correct” way to crack this nut, INHO

    Energy usage/cost data out of China/ChiComs is very hard to get hands around, IRAN subsidies their miners energy cost. Think business model..profitable?

    Compared with other Financial Transaction costs in resource expenditure ( 1 – Debit/Credit Swipe) the power consumption argument rendered mute, must be the “morrow”.

    Central Banks arent going after Cryptos..they are trying desperately to understand and master them. The reqs out there for “Crypto code kiddies” are huge..and growing every week. ALL the large money center banks are “in” cyrptos, U can bank on it. Note: Freeware to learn smart contract coding..

    Some of the top Universities and Companies in US are working to make blockchain more efficient. Intels new SOC chip (system on chip) includes hardware to accelerate bitcoin mining and reduce power consumption.

    U sight hashing times, without informing that over 55% of all BTC transactions right now are bull$#!& “spoofers”, derivatives trades -noise. All this info is readily available – block sizes, processing times, premiums – all in real time charts.

    Like Mike, Info masturbates
    Anti fragility is what G hates
    Embedded in Bitcoin, it really grates
    At $8000 per, its getting lates…

    Final Note – Pay Attention Please – Bitcoin was never and will never be the Transaction coin.
    It was not designed for transactions, “Core” has steadfastly refused to doing anything but Store of Value related work.
    Yes, it is used for transactions, but ever so slowly Litecoin is being realized and utilized as the Transaction coin, see Atomic Swaps & Lightening Network.

    Now go back to counting the dirty Ebola virus harboring federal reserve notes, no worries according the World Health Org..Ebola is only 50 % fatal..if infection caught in time – bush meat for lunch?

    No BITCOIN 4 U!

    • Let’s say – for the sake of argument that the BTC energy use is over-stated by a factor of 10X.

      That still doesn’t answer where the annual expenses of miners will come from.

      There is no free lunch my friend – you are grasping at tulips! Even if Energy was free, the servers, rent, people, capital investment is makes an internal tax toast.,\

      Why can’t you coiners face the fact of no free lunch?

      • Here is the music score –

        Free Markets..no really free markets. We have not seen a “free” market in over 15 years, probably much longer – no wonder U hate so much.

        “Coiners” pay a Fee, (negotiable at time of transaction) for every single transaction they make – just like U pay fee (hidden) every time U swipe a Debit/Credit Card.
        Miners are also rewarded when they find BTC’s, Reward will be Halved next year, Lite Coin reward gets cut in half this summer. Ohh nooo.

        The Central Cyrpto Clearing Corporation will be making a tiny fraction on every single Transaction, everysingle second of the day -24/7 ! Think about them badboys..they add up over time.. Yes this planned long time ago, even has name.

        Miners are making money right now- mining getting cheaper by day – and there is not even public adoption of this technology yet.

        Still – no bitcoin 4 U!

      • ROFLOL – so you have a crypto central bank (with no transparency) and fees…what happened to the free honest currency?

        Not sold… for example: If I send 1 BTC to someone now from my wallet, my recipient gets 1 BTRC…where’s this fee?

        If I buy on an exchange, sure, buyer beware…but that’s a tax any way you slice it, relabel to sell coins as you will but a use tax in any event.

      • So my choice thus far in the debate is George, a cool, calculating data-driven analyst…or a self-styled Nazi, which by definition is a totalitarian fanatical ideologue. Hmmmm….

      • ALL TRANSPARANT – ALL of IT..every single transaction can be viewed/seen as soon as hits the blockchain.. where it came from & where where it went

        Central Clearing – like a DTCC – who by the way utilizes blockchain now for their transactions.

        U R missing the “neat” aspects, it is a global Community, Bitcoins. By their very “nature” want to be used/transacted/spent – we needed “magic” word to dampen this effect, thus HODL

  4. Your cash flow est on bitcoin is probably right. Th early days of bitcoin mining were done on systems set up in college dorms with “free” power. After the universities figured it out, the next step was how to hide computers from the ra. Any unattended outlet is fair game. The next target was any community with subsidized power, who said no thanks to businesses wanting to locate there for btc mining.

    It is a funny echo of the spam craze of just a few years before btc. My at&t isp wouldn’t let me get the wife’s emails because her university was flagged as a major source of spam. The school’s it idiots thought the students were going crazy downloading music and videos and were hacking into everything and the network speed dropped to a crawl. Somebody had hijacked every vulnerable computer on campus and turned the school’s network into a spam machine.

    My guess is that the btc miners found their free or cheap power. But since there has been no media attention, it is somewhere they would prefer fewer eyes to see.

  5. re: bitcoin, the hole in your logic is the assumption that the ongoing costs of maintenance and transactions of bitcoin are the same as the manufacturing costs. Maintaining a bitcoin in cold storage is zero cost at the low end and cost of running one computer 24/7 at the high end; transaction costs would be running a computer for 12 minutes of electricity x lowest number of computers necessary to assure a valid transaction, which are rolled into the transaction fee charged by exchanges.

    • Afraid you don’t understand bitcoin, sir. The infrastructure of the miners is what makes the transactions happen. There is no free lunch. Maintaining ANY currency in cold storage is zero…so that’s not a selling point.

      12 minute transaction times? Can you imagine the backup at the car wash or the 10-hour “lunch hour” waiting for the burger to confirm?>

      And again even at “llw cost” there is “some cost” and most miners I know are greedy types who will not keep pouring out millions once they have “made theirs.”

    • I currently run a small one man “pop” (no “mom”) retail store in a very small rural/vacation town selling new and used general hardware and merchandise. My annual reported sales are less than 100k. My latest monthly statement for credit/debit sales was an $80 fee for $1600 in such sales. That works out to an average 5% fee (smaller transactions on some cards are much more!) out of my pocket. Once I actually let a millenial buy a 30 cent post card with plastic. Many of them go about with absolutely no cash! It takes about 10 to 14 seconds for the charge to clear. I can make change with cash faster than that. Can Bitcoin beat those fees, which I consider a rip-off? Where welfare and SS people used to get a check and cash it, they now receive a debit card and we are both forced to pay transaction fees. Cash, gold/silver or barter carry no transaction fees. Why should anyone pay a fee to a third party for an everyday transaction?…By the way George, “they call me MISTER Wacky!”

  6. Why George we are screwed and you know it for bitcoins are simply another means of keeping the scheme going, and after bitcoin looses its flavor they will come up with another scam to part the suckers from their money.Now the orange clown is playing with sanctions on friends and foes alike, meanwhile Russia and China are buying up gold and have been for a long time,now at the end of the day who’s better off,the suckers with their bitcoins or the gold,my money is on the gold.!!!

    • Why would you put your hard earnings into a hard, physical asset with a 2,000 year history and no need for an internet.

      (just kidding! we’re in Ure boat with yah)

  7. The only serious advantage I can see with BTC or any similar “coin” is the ability to move value internationally without(necessarily) alerting TPTB. This has utility when dealing with coercive regimes or overly bureaucratic ones. I can see the value for speculators who have the time and cash to play this market – like betting on ponies. As far as a store of value, it’s good for the very short term maybe, but it has too many dependencies. I never had the time to learn the game to sufficient depth to profit from it. Perhaps some of the other “coins” have a more efficient verification system, but many have vulnerabilities and little in the way of track records.

    The big advantage of PM’s is that you can dig them up after 1000 years(or someone can), and they’ll still have value. Paper currency after that time might have historical value, but will be useless for transactions. Even more so with BTC, and similar.

    I’m really looking forward to tomorrow’s report on hydroponics! Where I live the soil is poor, water is valuable, and anything with a mouth will feed on a plant the moment it germinates. HP seems to be the only reasonable choice here for those of us who don’t have naturally green thumbs.

  8. 4-C “makes a tiny profit on every transaction?”

    Las Vegas was built on a 2.1% house margin.
    Once manufacturing began, Bobbie Pins sold at 10-for-a-penny, and both Marcus and Smith retired as millionaires.

    Exactly how tiny a profit are we talking about here, a billion dollars a year, a trillion, how much?

    Dollar bills (or Pound notes, or Franc, Lyra, Kroner, or Ruble notes) have NO transaction fee.

    I believe someone may have inadvertently allowed the feline to escape their satchel…

  9. Gold and silver is the real money but you still need paper money. The real question is at what ratio should you use? I prefer 20% gold (small coins 1/10 ounce, 20% junk silver ( US 90% quarters). 60% in US dollars (mostly small bills. (twenties work for me) Money in bank accounts should be less than 5,000.00, I also keep all my bills paid ahead for six months buy hey that’s just me.
    Having fun cruising to the end.

    • I dont know… gold and silver … if I had a pound of coffee .. and coffee was hard to come by.. would I give up my pound of coffee for a gold coin..especially if no one else is taking gold.. keep the gold .. I’ll enjoy my coffee but heck.. I’ll give you a cup for the coin…it depends.. how bad are you wanting a cup of coffee..
      Go to Ethiopia.. they have to walk fifty miles for a cup of dirty water..hot . Dry dying of hunger.. bring a truck of food and a tanker of clean water..what do you think they will choose.. a check a few pounds of heavy metal or life saving water and food

  10. George you’ve hit on my prime argument against Bitcoin….what happens when all the “mining” ends? I’ve not seen an answer from anyone on this, including the poster boy for Bitcoin, Max Keiser!

  11. When hyperinflation hits and it will the 50000 you have in the bank will be worthless just like Venezuela there is a movement in Venezuela 4 people are bartering and trading what they have Weather be coffee beans, hair styling ,physical labor on and on and on Venezuela citizens are taking the initiative to not use the currency anymore but are using Dash D-a-s-h an alt coin for their transactions and also bartering is making a comeback through bartering
    In the United States when our money isn’t worth anything I want objects that are worth trade and I want lots of digibyte. and 1 bitcoin.

    • You’re missing the point Bryce: Net’s down and the power off mostly. Which I why I never sell what glitters because THAT SURE AS WELL WORKS IN THE AOC-type wreckage

      • I read a news article where they’re putting up 10,000 satellites and it’s for internet use so the if there is a a big outage it won’t be out on the other side of the globe or at least some place on Earth and with all these satellites an EMP is the least of our worries.
        Just like in Venezuela the people are taking control of their situation to grow in their own food they’re bothering that’s why seeds that are stored animals that you use and a garden that you grow.
        With the millions of Acres that has been flooded around the world more and more people are taking the initiative to plant some seeds.
        Seeds are more important than cryptos cash silver gold or gas or oil or diamonds without seeds one will not eat.
        So the key to success is diversity.

      • old news but not to u – look up stock symbol IRDM. In my realms, people are been long IRDM for a couple of years.

        Still, one virus and there’s no money – not my gane thanks

      • Trouble is, when the Net’s down and power mostly off, only the dollars, silver rounds, etc. we have in our possession will be usable. Will we even have access to our “safe” deposit boxes? Will our 401K, IRA, Bank Accounts, Stock and Bond holdings etc. be accessable then?

  12. Currency is not Bitcoin – so saith the IRS, ya got beef wit that ? take it up with US Govmint.

    Bitcoins are a Commodity as far as the Law is concerned.

    How do U pay TAX on a Currency? where – what tax jurisdiction – cant splain that one..

    Google search diagnostics currently show Bitcoin more popular than POTUS or Kardasians

    Too bad B.B. generation can’t F- this up – like they have Everything else in modern America.

    • I will have to crypto out Ure Butt Coins (UBC’s) – have no value, but being virtual, they have no smell and hell, that has to be worth a lot, right?

  13. G,

    Your Bitcoin math seems to pencil out. Most money operations are expensive to operate.

    Think of the pay-day loan store.

    They might charge 25% interest on a loan but once the operator backs out defaults, expenses and tax….

    If the proprietor has $800,000 dollars outstanding (over the year) at 25% that’s only $200,000 to cover the above expenses.

    Back out the 10% default rate, two employees at minimum wage and a couple grand a month for rent. Why bother?

      • If what they say that Bitcoin will be completely mined in the year 2140, I guess none of us will be alive then.

      • 2140-2020
        120 years…
        and only how many left to find (and I haven’t even discounted future inflation, lol)
        Nope, numbers still blow up because there would be a total of only 37,000 new coins mined

        But the current run rate is 1 coin in 10 minutes. 53,000 coins per year minimum and power is going up… nope, not buying it.

    • “They might charge 25% interest on a loan but once the operator backs out defaults, expenses and tax….”

      Steve…Poor payday loan companies .. just 25% oh hey.. that’s per day…

      Knew(well still know her) a woman.. got caught in the slot machines..( she only talked about her wins) her husband died..left her just shy a million.. her house was paid off..her school loans paid off.. pension fund.. three kids and SS survivor benefits.. brand new car..
      She is a professional and at that time was making thirty grand a year.. ( today that number is low but at that time that was great money, )
      She gambled away the shy a million… she gambled away the hkuse..cashed in the retirement fund gambled that away..
      She went down and got a one thousand dollar payday loan..her payment 450.00 a month interest.. she kept it up a few months till she missed a payment ..then she lost her car. She was homeless for a while till one of the kids let her live with them..
      She actually got an apartment a couple of years ago. And got remarried who i have heard is keeping her out of the casinos.

      The best spot at the casino..the bar or restaurant..
      Heard Eric Claptons song tears in heaven..

      https://m.youtube.com/watch?v=VmLQes4tmtM

      I hear that song and it brings tears to my eyes.. I didn’t bring up any questions on it though.. I didn’t even ask for his autograph..I just felt honored that he was nice enough to share a couple of drinks .
      It’s almost as good as going to a Doobie bros. Black oak Arkansas concert..I always parked a long way from the center..and I was always early..seen some guys shooting golf balls in a net.. being me I stopped.. next thing I know I’m dirt pounding with them beer sandwiches crazy bunch of lunatics it was a hoot..then realizing shoot I have a concert to go to.. bid the guys I was ground pounding with a quick I have to go it’s been fun but my favorite band is playing in concert.. get seated the concerts starting..who walks out.. the crazy guys I was swinging clubs and drinking adult beverages with . Didn’t even know it was them lol..

  14. Ha. I just grasped at a few tulips. Bought a whole $10 each in BTC and ETH- will those ‘investments’ pay off? Not worried about it, as I have other investments.

    But I did enjoy your thorough kicking of the BTC tires and the ensuing conversation. I am still digesting.

    One thing I will mention though, are some new blockchain/cryptos that supposedly represent renewable energy. Check out SolarCoin or WePower. If It was possible for me to do so (i.e. finding an online exchange I feel comfortable using), I would be more motivated to ‘invest’ in those.

    I will also mention that I attended a ‘Slow Money’ discussion this morning that deal with asset-based micro loans in small farmers. I hope they do help farmers, but frankly I have more faith in a ‘Fast Money’ revolution based on online barter. However, as you all brought up, I am also concerned about FaceBook token/crypto infecting that as well.

    • On slow money investing – not a bad idea. As I look around the world it is not the bigt corps that need money – they have too much and are wildly overpriced.

      Tax breaks for long terms gains were originally to help with capital formation. With too much capitol though, prices just get bid up through the roof!

  15. It’s a computer program. There is nothing to stop someone else from making the next bitcoin.

    This is why there are something like 3,000 cryptos.

    When anyone can make one, none of them will have any value.

    What makes money valuable is that only one entity, the USG, can make it AND that everyone accepts it as a medium of exchange.

    I can’t use bitcoin to buy gas. It has no value to the vast majority of people.

    Bitcoin owners may delude themselves, but in the end they are all nothing more than speculators looking for the next bigger fool. And the last person holding them when the music stops will be the biggest loser.

    • “This is why there are something like 3,000 cryptos.”

      Prepper.. I have a relative that plays in that online e game second life..lol lol
      He and his wife have a store in a mall in this game.. they create bushes and trees.. to sell for lindo’s lol lol lol
      The lindo dollars are a hundred per us currency.
      The last time I talked to them they were making a living wage in lindo dollars over a cartoon non existant tree..
      Kinda like BC or the dollar for that matter.. all of them are the emperors new clothes..
      I actually wonder when the change came.. coinage originally to carry metals for trade to be used in the creation of durable goods.. paper to be used instead of carrying large amounts of metals etc. Now paper isn’t backed by anything at all..

  16. I have saved and collected a large stash of silver coins. I have a good feeling saving these coins…

  17. “So, how many Satoshi’s is it to buy a free lunch, these days?”

    Ok…I got curious.. so when the daughter took me out for lunch I decided to as that very question..

    Hmm.. not accepting bit coin.. then I said oh ok I get it..so how much gold is our bill…

    I thought they were going to toss us out or make us do the dishes.. it seems neither is acceptable.
    Lucky we had some of that green paper around..lol lol..
    I don’t have it on my computer now but I recall seeing wheelbarrows full of that green paper being used to buy good and bushel baskets full of the shiny yellow metal being used for the same purpose.
    I guess until either is an acceptable currency neither is good.. a least with lindo dollars from second life game you can convert it easier

  18. Why don’t we have a political party for honest money? I’m already too old to start one. ;-(

    Bitching about what is leads to zilsch and nothing else.

      • Attempting to become an organized competitor (OC) of the dominant partisan gangs can result in being hydroponic gardened in the river with lead poisoning. The partisan gangs know that if their marks are bitching, then they’re happy, and there is no need to do any hydroponic work.

  19. “If you think Alexa is the  a threat…get the sand out of your eyes and ears…You do know what an “infinity transmitter” is, right?”

    I believe Everything is in infinity…

    You can make a pretty slick laser audio bridge for a few dollars. It takes a little bit to focus but once you’ve done it..lol lol lol

    My new favorite spot on the road is one in a neighboring state..they cut notches to inform you that you have crossed the line.. someone figured out how to notch it so when you drive up to a stop sign the sound vibrations
    say stop.. it’s pretty slick

  20. The last bitcoin will be mined in 2140. I wonder what the programmers of 121 years in the future will be programming. Certainly not my concern, I did however do some small insignificant part bringing crypto to the masses.

    We don’t need to worry about what happens when the last bitcoin is mined, its over 100 years away. I’m pretty sure some smart guys will figure it out or the world will be f’ed over pretty good

    slayin crypto since 2010

  21. My mother, ( WWII, Austria, schoolgirl) told me that gold was not used much in trade or barter at that time unless it was very small item or coin except for high value transactions, silver coins were more commonly used. The most sought after items were tobacco and chocolate. For a number of years now been buying a 1/10 oz gold Eagle every month..have done very well with that then switched to a few silver ounces instead over a year ago. The bullion holds its value which is my reason to have some around. If it isn’t in your hand..well you know.

    • Proffessor…….

      Exactly………..

      My father told a story he was told by either his father or grandfather.. that during the weimer depression that someone they knew passed on two boys split his substantial inheritance.. one put it in the bank … notes etc… the other one.. well he was a lets have fun guy… went out wine women and song…when the weimer depression hit.. the one with all his cash in the bank.. couldn’t hardly buy a loaf of bread.. the one that went out.. well he just tossed his old bottles in the basement and there was a glass shortage..
      During our last depression.. coffee… one pound was worth what was it two ounces of gold.. back in the depression in the eighteen hundreds.. a glass of water one ounce of gold..

      My parents told me stories about what they had to do during the last depression..

      Argentina… a few years ago a cup of coffee was three hundred dollars a cup ( brewed._) the last time I read anything it was like a months wages to get a loaf of bread …
      Greece got smart thouigh…. Like the recession in the eighties.. we would barter our talents in exchange for food and other services.. Greece did that a few years ago.. there women were selling their bodies for a can of soup.. old people were dumpster diving for food.. then there was a bunch of news stories.. seemed that they discovered that a plumber or carpenter is still just that.. a plumber or carpenter.. and they started to trade goods and services..
      I believe that is what will happen here in the USA.. when we go down.. the interest on the def.. is so high that logically anyone with a third grade math skills can tell you .. hell any four year old will tell you I don’t have enough pennies to buy that.. we don’t have enough to pay it off.. and since we outsourced our industrial complex.. well I think that has left us severely lacking in a lot of places.. the only option left is go bankrupt and rewrite our whole system start from scratch.. all the trillions paid into social security.. will be gone.. nadda nothing.. fire and rescue.. schools.. the works gone.. we don’t have the money to pay for them.. the new system around.. I think will be close to colonial times.. your kids need a teacher.. you pay for one.. your town needs a fire department you pay for it..
      the ones that will truly hurt are the elderly and the very young..
      Of course this is my opinion..

  22. School’s out in Hong Kong? Masked kids are set for the “Magical Mystery Tour”?

    A million children out in the streets protesting a perceived erosion of local judiciary power to the Mainland. What happened to one country, two systems 50 year guarantee?

    Her Majesty will not be amused!

  23. From what I remember, there’s a difficulty multiplier built into the bitcoin system. The more people that are trying to mine bitcoin, the more difficult it becomes to be the writer of the next block.

    Originally blocks were produced on cpu power alone, at some point people figured out how to use graphics cards (use a lot more power, but also a lot more powerful at finding the solution). This caused the difficulty to increase.

    Bitcoin then went up in price, so more people started mining it, this also caused an increase in difficulty.

    So following the situation that there are no more BTC to be mined and all the miner gets out of it are the fees associated with the block being mined, there are a few routes this could go:
    1) Fees go up
    2) Price of BTC goes up enough to make it worthwhile to mine BTC from fees alone
    3) There’s a huge drop in BTC mining, the difficulty drops to keep about 12 minute block generation, and people go back to mining it on CPU’s in the background (similar to what some websites do, both legitimate and nefarious)
    4) The block generation method is changed and goes to something like Proof of Capacity or Proof of Stake (https://steemit.com/cryptocurrency/@killjoy/the-different-proofs-of-crypto-currency)
    5) No one mines it, no one uses it, and the price goes to $0

    We should see something like this occur in a few months when the reward for generating a block gets halved. My guess is that short term will see 2 or 3, long term (assuming people start using it), it goes proof of stake where just having the mining software open every now and then generates a block and nets you the fees.

    • Congrats – you follow where I had posted almost to the T and with a lot of additional details – thanks

      But, the hard cap at 21-million BTC is our “number to watch” because even one coin past that and the whole thing becomes just another currency with inflation – just a lot more suckers than before

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