Dimon: Bitcoin is a fraud

Last night we saw some great discussion about bitcoin at the Brisvegas Mb Fund meet, with myself in the “ponzi scheme” corner versus a bunch of readers. Today, alas, my position is endorsed by Jamie Dimon:

JPMorgan Chase CEO Jamie Dimon took a shot at bitcoin, saying the cryptocurrency “is a fraud.”

“It’s just not a real thing, eventually it will be closed,” Dimon said Tuesday at the Delivering Alpha conference presented by CNBC and Institutional Investor.

“I’m not saying ‘go short bitcoin and sell $100,000 of bitcoin before it goes down,” he said. “This is not advice of what to do. My daughter bought bitcoin, it went up and now she thinks she’s a genius.”

In an appearance at a separate conference earlier in the day, Dimon said bitcoin mania is reminiscent of the tulip bulb craze in the 17th century.

“It’s worse than tulip bulbs. It won’t end well. Someone is going to get killed,” Dimon said at a banking industry conference organized by Barclays. “Currencies have legal support. It will blow up.”

Dimon also said he’d “fire in a second” any JPMorgan trader who was trading bitcoin, noting two reasons: “It’s against our rules and they are stupid.”

Dimon’s criticism comes at a time when some of the most well-known figures on Wall Street are starting to embrace the cryptocurrency. Fundstrat’s Tom Lee said he sees bitcoin surging to $6,000 next yearand value investor Bill Miller reportedly owns bitcoin.

I’m no great fan of our Jamie but he is making perfect sense here. Bitcoin undermines the power or government tax and control the money supply. Therefore it is doomed. Block-chain technology is different and its unique transaction capability could be deployed into all kinds of stuff.

Don’t confuse them!

If you want to know how heated the current bid under the cyber-tulip is then try this from BofAML overnight:

The most crowded trade…

Comments

      • They won’t let another fraudulent system competing outside the bankers fraudulent system. Well not one they can’t manipulate.

      • Correction:

        Government like to be running the show. Recognising the credit created by private banks dilutes the power of government.

        Bankers like Dimon do a great job at obscuring the distinction between public money created by the public sector and the stuff churned out by banks pumping up speculative asset price bubbles.

        Supporting the privatisation of public money and opposing all the other dysfunctional privatisations of the commons only makes sense if there is a clear and functional method of regulating the privatisation.

        The calls for a Banking Royal Commission reflect the experiences of the last decade across the globe and that more and more people have had enough of the dysfunctional operation of our banking and monetary system.

        Bitcoin and the like are just manifestations of that growing distrust of a broken and thoroughly corrupted model.

        The sooner public money is the exclusive tool of public administration and private monies are exactly that the better off we will be.

        China clearly understands the importance of this issue.

        The question is how long we can afford indulging clowns like Jamie Dimon.

      • You say that like its a bad thing…

        Compared to the alternative of paying protection money to your local mafia(s), it kind of is.

      • Thanks doc.

        I can never understand those whom think it’s a good idea to undermine taxation or gov in general. Even with all its faults what would you have otherwise? Dog eat dog, and those who will come out on top WILL be the 1%ers.

    • No it isn’t. “Fractional reserve banking” blah blah blah. Just another shibboleth straw man for know-nothings to talk about. But that’s not how the system works at an operational level.

      Yes Skip, you’re right.

  1. “It’s just not a real thing, eventually it will be closed,”

    I think if you’re going to comment about something, you should first understand it.

    “It’s not a real thing” – what? It’s a protocal that allows extremely fast transfer of any amount of value for pennies.

    “It will be closed down” – what? It’s a decentralised system of nodes throughout the world. It’s not possible to be “closed”.

    This guy is embarrassing himself.

    • You can shut down the exchanges.

      More to the point, you only need a powerful government or two (say, China) to declare bitcoin “illegal” and you will see a huge decline in the appetite for holding BTC. It does not matter that enforcing this “illegality” is hard. Most people do not hold BTC to make use of its anonymous and untraceable aspects and to use it for nefarious reasons. They hold it because it’s going up in value. Even some of those who quite like its anonymous and untraceable aspects will baulk at using it if its use becomes specifically outlawed. Even if BTC’s anonymity means they “aren’t going to get caught”. Most people prefer not to directly and overtly break the law when it comes to investing big chunks of their wealth.

      Now imagine what the above will do to BTC’s price. It will crash it. And once that happens, trust is lost, and it will be lost for all cryptos, not just BTC.

      • Yes, damage could be done that way. But I think it’s gone past that point now. Shutting down in say, China, would be damaging, but there are decentralised exchanges that China can’t shut down. Yes, they won’t be able to easily put cash in, but trading will continue.

        Add to that a lot of exchanges are getting US regulatory approval. I think the biggest hurdles are over.

        Even if a catastrophy happens and exchanges are shut down, you’re not looking at a failure mode, just a downturn.

      • Sure. But I continue to think you underestimate basic psychology.

        Most people do not want to invest their wealth in a product that has been outlawed by their own government. If some country (say China) outlaws it, the only people who will stay in (within that country) are those who are comfortable with that risk or who have genuine reasons for wanting to evade government scrutiny. When you consider that people’s actual wealth is at stake, the number who will be comfortable with this risk is not large.

        Put it another way. The Chinese government is currently making it more difficult for individuals to move money overseas. But they are not telling them it’s illegal to buy houses in Australia. Imagine if they outlawed owning houses in Australia. I am talking about the crypto equivalent – telling people that owning the asset (BTC) is illegal. It doesn’t matter that some individuals will continue to do it (and get away with it). It’s that most people will simply back off. Too risky.

      • Arrow2,

        It is a strange argument to rely on China where the government has made it clear that it is banning Bitcoin BECAUSE it is a form of private money.

        In China the govt wants a complete monopoly over money and largely it has it because the banking sector is essentially public..

        We have the completely opposite situation where the majority of money IS private – created by private bank lending – with some light touch regulation.

        Here the opposition to Bitcoin is of a completely different character because currently the government barely controls money.

        The opposition is coming from Bankers like Dimon who see other forms of private money as competition to their form of public / private money.

        It is harder to make the argument to shut down one form of private money over another. Sure the govt might decide to protect the interests of private bankers but some governments might sniff the breeze and just cut them loose as a historic anachronism.

        The superior approach to that taken in China is to

        1. To have public money administered by the public

        2. To leave private monies to the market and remove the bankers privilege to create and destroy public money.

        That is what a belief in a democratic mixed economy ought to look like.

        At the moment our model is like a dysfunctional variant of China where an authoritarian state is replaced by non-state undemocratic actors of the likes of Dimon, Greenspan, Stevens, Bernanke, Narev etc.

      • Pfh007 – you may be right, but that is an argument about what “should” happen. Not what “will” happen. Time will tell. But I think most of the risks tilt to the side of governments being bastards.

      • Arrow2,

        Don’t worry I share your cynicism. Just making sure that the Banker world view is clearly identified as just that.

      • I can’t fully agree with you guys, because while it seems like just closing exchanges would close the currency, if it were that easy why is there still drugs, terrorists, illegal gambling, prostitution etc? Just shoot a few drug dealers, cell supporters, gambling den owners, pimps and the problem will go away right?

      • I can’t fully agree with you guys, because while it seems like just closing exchanges would close the currency, if it were that easy why is there still drugs, terrorists, illegal gambling, prostitution etc? Just shoot a few drug dealers, cell supporters, gambling den owners, pimps and the problem will go away right?

        Easy enough to go through life without using any of those things.

        Less so money.

        Again, the point is that they do not need to be eliminated completely. They just need to be made impractical for the majority. Bitcoin presents no threat to Government if the only people interested in using it are speculators and criminals.

    • “It’s not a real thing” – what? It’s a protocal that allows extremely fast transfer of any amount of value for pennies.

      What? Last time I sent $100 worth of bitcoin it cost me $3! Hardly pennies on the dollar..

      • Yeah, that was a shitty time. It’s back to pennies now. The developers and community have been dicking around for too long arguing, which is why fees jumped so high. Still, $3 isn’t very high in the scheme of things.

    • Rusty. I could agree with every point you’ve made but it still doesn’t justify the current price.

      Let’s agree that it is a ‘currency’ …. so were sea shells many moons ago …. but how do you put a value on a medium of exchange that is backed by …. nothing.

      It is a bubble, plain and simple. Does it have ‘value’? Yes it does. Is its value really many thousands of dollars? Highly unlikely.

      Most people buying in at this level will lose most its $ value in due course.

      • Dominic, I agree that placing a value on bitcoin is extremely difficult. Right now the value is determined purely by market forces of the exchange. There’s a limited amount of bitcoin available, and an even more limited amount of bitcoin available to trade. There is demand for bitcoin. Thus bitcoin finds a purely market value.

        The price – whatever it is, is precisely what it should be in a situation (assuming no market manipulation).

        In such a situation, you can only say with confidence that it’s overvalued if:

        * You know there’s market manipulation going on that’s artificially inflating the price
        * You know that demand will drop in the future, and thus the market value will drop.

        If you don’t know the above, you cannot possibly know that it’s overvalued (or undervalued for that matter). Everything seems based on people’s feelings. Which is bullshit.

        Why shouldn’t it’s value be many thousands of dollars? I mean, frankly, it’s value could be anything, because the number of bitcoins was purely arbitrary. If we had 21 billion coins instead of 21 million, it’s value would be in the single digits. Would you be concerned then? Or is it just an emotional reaction to the sound of “thousands of dollars”?

      • Rusty, the same price action you see today in Bitcoin is the same price action we saw during the Dotcom boom — in fact, the Dotcom boom was less extreme. There is no difference. There was no ‘manipulation’ during the Dotcom boom either — just naive people piling in because of FOMO (fear of missing out). This is what we have here: FOMO.

        It is a mania plain and simple. You have totally bought into this which is why you try to justify it in every way (and ignore logic whenever it presents itself).

        I really don’t give a damn — missing out on a BTC rally won’t hurt me in any way whatsoever, but the people invested in BTC, particularly around these levels, they stand to be badly hurt which is why they protest so vehemently when a detractor surfaces.

        Read this book: “Extraordinary Popular Delusions and the Madness of Crowds” by Charles Mackay. Not only is it excellent, you’ll recognise Bitcoin immediately.

      • Even StevenMEMBER

        @ Rustyshacks

        Suggest you invest in a membership with MB. It will provide you with far more value than you are likely to obtain from Bitcoin.

      • Dominic, if you liken the current situation to the dotcom boom, wouldn’t it be more apt to say it’s a crypto bubble, and not a bitcoin bubble? At least not definitively?

        During the dotcom bubble plenty of stocks were caught up in the mess, but were successful long term regardless. Amazon comes to mind.

        I don’t see why you’re lumping everything in the one basket, when that didn’t happen with the dotcom bubble.

  2. People looking for alternatives to doing business via the banks. Mmmm…wonder why that may be…. oh let’s see: Financial Planning scandals, insurance scandals, money laundering, LIBOR rigging, dodgy home loans… just to name a few. Can’t see blockchain dying anytime soon. In my humble opinion – this is just getting started.

    • Don’t confuse blockchain and bitcoin. Blockchain technology is awesome. Banks are investing heavily in it. ASX will shortly announce their new trade settlement system built on blockchain technology. Nothing at all to do with bullshitcoin.

      • The two are related in that BTC uses blockchain technology.

        The point you raise about banks investing heavily in it is spot on, and counters the whole idea of ‘banks will be useless’. On the contrary, it lowers their overall footprint whilst allowing them to deliver similar services. It’s a win for them, if they can get it right.

      • Agreed, they already trade in dollars, euro’s and pounds so from a banking perspective, its just another currency.

        However HH does have one major point – its not supported by a government or a physical nation. There are no tax payers to bail it out.

    • Drugs and criminal activity will keep Bitcoin going.

      Look at how many $100 bills are printed in Australian currency and then look at how many are in general circulation, theres a big difference. Cash is easily stolen and bulky so people involved in illegal income generating industries are always looking for ways to hide it and Bitcoin is perfect for this.

      • Those people you mention – who use it for its “fundamental value” of anonymity and untraceability – are only a small percentage of bitcoin owners. Most owners are simply owning it because it is seeing very nice price rises. (Unless you think criminal activity has gone up 500% in the last year or two, hence explaining the BTC price rise?)

      • Arrow, did you answer your own question? 😉

        Maybe its not the activity that has gone up but illegal activities deciding that Bitcoin is a stable alternative to cash.

  3. Ironically at the exact same time Jamie Dimon was calling Bitcoin a fraud his SF office was hosting Blockchain Capital, Pantera Capital, Boost VC and Polychain capital. All funds that invest primarily in the bitcoin / blockchain space. Looks like a few employees will be on the chopping block!

    • option 2 – dimon is talking his own book, while jpm continues to invest in a suite of proprietary blockchain products? also known as lying, but these days it is known as fake news.

  4. Countries like Singapore are embracing cryptocurrencies because they see the benefit of leadership in innovation. They do not have a capital gains tax on Bitcoin. I have a VISA debit card issued by a Singapore company called TenX. It is funded purely from Bitcoin and I can spend it anywhere on earth that any other debit card is accepted. The Bitcoin is converted to dollars at point of sale and the merchant does not know the difference. So I travel anywhere in the world without losing on currency conversion.

    China has tried banning Bitcoin before. It only ever causes temporary price volatility.

    The most pragmatic way forward for governments is not to fight it. Just to regulate exchanges so that crypto profits are taxed at the point of conversion back to fiat. This means better regulation of exchanges – not banning exchanges. I actually think that some improvement in regulation, even if it means higher taxes, would be welcome by crypto investors because then they would know where they stand. No one wants to go to jail for money laundering or tax evasion because the rules are not clear.

    Governments cannot end cryptocurrency unless they end the Internet. It’s decentralised. Not going to happen until world war III. Then we have much bigger problems to worry about.

    • If it is made illegal to convert bitcoin (or whatever) to/from real currency, how do you get money into your credit card ?
      If that credit card is issued by an organisation operating from a country where that is allowed, how hard is it to make processing payments from those issuers illegal ?

      It’s really not that hard to marginalise bitcoin to the point of uselessness for daily use. At which point it basically becomes irrelevant.

      • Drsmithy,

        If a government tries hard enough it can certainly marginalise the use of cryptocurrencies but the harder it tries the more the question arises ….what are they trying to achieve?

        The public sector has oodles of power to create its own money.

        When it starts trying to chase any competition out of town it should have a good reason for doing so. Stopping a few junkies and crooks hardly warrants the effort.

        The ONLY reason there is any opposition to cryptocurrencies outside an authoritarian state like China is because the corporate banks don’t like any competition.

        Not sure why anyone, other than a FIRE sector minion (or the useful idiots – you know who you are), would support private bank attempts to drive competing private money from the market.

      • I can imagine that the more governments become militant about protecting their fiat system and illegalise cryptocurrencies the more motivated citizens will become to create ways to circumvent the system. There would be a rise in the use of the more private and anonymous coins like Monero.

        I can fund my debit card from anywhere. I can spend it anywhere. If Aus bans bitcoin then my bitcoin does not care. It is stateless in a decentralised system. If my debit card is funded with bitcoin bought in Singapore dollars – or with Aussie dollars converted to bitcoin in Singapore, then neither the Aussie merchant that I spend with nor the ATO have a clue. They are just going to see Aussie dollars.

      • If a government tries hard enough it can certainly marginalise the use of cryptocurrencies but the harder it tries the more the question arises ….what are they trying to achieve?

        I’m happy to bow to your greater insight, but I would imagine their are trying to protect their ability to tax, enforce laws around money laundering (or other unsavoury things money can get used for like murder and bribery) and generally have more insight into how people who are apparently quite rich, got that way.

      • I can fund my debit card from anywhere. I can spend it anywhere. If Aus bans bitcoin then my bitcoin does not care. It is stateless in a decentralised system. If my debit card is funded with bitcoin bought in Singapore dollars – or with Aussie dollars converted to bitcoin in Singapore, then neither the Aussie merchant that I spend with nor the ATO have a clue. They are just going to see Aussie dollars.

        What happens when your debit card stops working because it’s illegal for local institutions to take it since its issuer is on a blacklist ?

      • drsmithy,

        “..but I would imagine their are trying to protect their ability to tax, enforce laws around money laundering (or other unsavoury things money can get used for like murder and bribery) and generally have more insight into how people who are apparently quite rich, got that way…”

        If that is what is really at issue governments would be taking action on those issues right now.

        But rather than take action they are doing everything they can to ensure that people who have gotten rich under our privatised model of public money stay that way.

        Cryptocurrencies are not going anywhere – all that will happen is that the current oligopolistic model of privatised public money will be extended to a new technology and the same old banks will keep on running the monetary show and holding the economy and the public to ransom. Without extra competition their margins should remain nice and juicy.

        In fact what I think is much more likely is that once the dominance of the private banks is extended over this new technology it will not be long before we start hearing how there is now no need for any public money creation by the public sector at all because there are plenty of private bank cryptocurrencies they can pay interest to borrow.

        The campaign to abolish cash is nothing more than an aspect of the neoliberal vision splendid – which is ‘money’ completely removed from control by the democratic public sector.

        It is worth reading the debates in parliament when the Commonwealth Bank was created in 1913. The very same arguments were made by conservatives back then.

        They argued that the government had NO role with regard to money. Hard to believe but is it really that different to what we are hearing now?

        What is disturbing is how a bit of Daily Telegraph style ‘crime’ hysteria has otherwise sensible people rushing into the arms of classic banking sector propaganda.

        But then crime-fear has always been gold for making the medicine go down.

      • If that is what is really at issue governments would be taking action on those issues right now.

        Really ? I mean, for all its hype, is Bitcoin really being used for much in the way of large-scale tax evasion yet ? The obvious counter-argument would seem to be that the fact it’s not being targeted yet indicates it’s not really being used yet in anger [for those things].

        I must confess I’m struggling to follow your line of reasoning on this one (other than the obvious ‘cryptocurrencies will be allowed if they’re controlled through official channels’ point, which I agree with completely). The parallel between Bitcoin and cash from the perspective of Government seems clear, so I’m not sure why you’d say they’d target one but not the other ?

        I’m not trying to push any “crime hysteria”. But Bitcoin offers little to no advantage to the average punter over cash or a credit card, and a lot more disadvantages. Which is why hardly any of them use it as money outside of nerds (of various stripes). The rest of its volume is made up with people speculating, or engaging in transactions of, at best, dubious legality.

        Look at it this way: as the average Joe basically living from paycheque to paycheque, buying everything with either a credit card or cash, taking the occasional overseas trip to Bali (and buying everything there with either a credit card or cash), why would I use Bitcoin instead of “real” money ? What does it offer me ? Where’s my motivation to go rogue ?

      • “What happens when your debit card stops working because it’s illegal for local institutions to take it since its issuer is on a blacklist ?”

        The issuer issues a lot of cards – not just those funded from Bitcoin so my guess is that there would be collateral damage. But yeh, if there was a way to blacklist my card then its not going to work – here. I could still use it online or overseas. If it stopped working everywhere then I would transfer my bitcoin somewhere else.

        But the current state of play in Australia is that Bitcoin can be used for personal expenses of up to $10,000 in a single transaction without incurring a tax event. At this point the ATO is not interested in chasing up my debit card.

        Suppose I wanted to cash in Bitcoin to buy real estate then that large transaction would be scrutinised and I would be subject to normal capital gains tax rules. This is why I think that the Australian government should focus on regulating exchanges to capture the large transactions at point of conversion to fiat. If a few other governments want to try banning Bitcoin I don’t think it is going to hold it back much in the long run. China has tried before. They are probably about to do it again very shortly. My guess is that it is temporary until they work out how to better regulate it.

      • drsmithy,

        We may be at cross purposes. I don’t think Bitcoin is being used for much at all at the moment. When I referred to the government not taking action I meant in relation to the issues you referred to – money laundering, rich people getting richer etc..

        I was only taking issue with the idea that the government should be taking action to prohibit Bitcoin and other crypto-currencies.

        I see that as only making sense in terms of the interest of private banks having their public/private money privileges protected by the state.

        If the state was to exert a monopoly over public money in the manner I propose I doubt it would have much interest in what ‘private monies’ are doing. If for no other reason than that they are likely to be in marginal use.

        However, the private banks see any competing private money as a threat because at the end of the day people might start asking why the private banks should be allowed to latch themselves to ‘public money’ but other private organisations cannot.

        The far greater threat to any government money is likely to be from the money issued by other governments.

        We see this around the world where people vote with their feet and save in a currency other than that issued by their government.

        Chasing down cryptocurrencies seems an even more futile pursuit than chasing down black markets in foreign exchange.

        Getting the private bank fangs out of public money is essential but ultimately public money 100% by the public sector will still be subject to competition.

        Which is a good thing.

      • But the current state of play in Australia is that Bitcoin can be used for personal expenses of up to $10,000 in a single transaction without incurring a tax event.

        Right. But this isn’t a discussion about what the current state of play is, it’s a discussion of what *might* happen.

        The argument being made is that (paraphrasing) ‘stopping Bitcoin is impossible because it’s distributed, yo’.

        The point is that Governments don’t need to “stop” it to achieve their aims. They just need to make it so that hardly anyone uses it because it’s too inconvenient (either because you’ll end up in front of a judge, or no merchant will transact with you because they’ll end up in front of a judge).

        This is why the risk in Bitcoin is so great. Sure, you might have gambled your way to being a Bitcoin paper millionaire, but if a co-ordinated move tomorrow by all the Western Governments makes it impossible to turn your Bitcoins into “real” money in a legal fashion…

        Sure, there’ll probably be a sneaky avenues that work for a while like foreign credit or debit cards, and you’ll probably be able to buy stuff from foreign sellers where Bitcoin is still legal (though do it too much or with anything large/exensive enough for customs to notice and you might be in trouble), but you won’t be able to use for mundane day to day expenses like food, rent, doctor’s bills, fuel, etc, etc. So it will become less and less useful – ie: valuable – to you.

    • Yes John, that’s great, but is a single Bitcoin worth $5,000?

      This is what the BTC cheerleaders don’t get – they have no concept of value so they pile in and we have a bubble as a result. Blockchain is the big deal here not the ‘currency’. They are mutually exclusive no matter what anyone says.

      Not a single one of you has proffered a cogent argument as to what BTC’s value really is, so what we have is a Dotcom boom-style ramp up in price because no one knows how high this can go.

      • There will never be enough Bitcoin for every Australian citizen to have one each – even we had all the Bitcoin in the world.

        Still think it is not worth $5000?

      • John, you are thinking about it in the wrong way. Unless every Australian ‘needs’ one Bitcoin (which they don’t) your argument is dead. There are over 1,100 crypto-currencies in existence and there are precisely NO barriers to entry. Hell, every Australian could feasibly have their very own currency and manufacture an infinite amount of it. Seriously, you guys can’t be helped.

        BTC under $4,000 now (more than 20% off its highs). Squeaky bum time?

      • Dominic, I don’t think I am thinking about it the wrong way. There are a lot of coins for sure. Some of the recent ones are no doubt scams and I will agree there are Ponzi elements at play in some of the markets. But I don’t think that is true of Bitcoin or Ethereum or a handful of others. Bitcoin may be one of many but it is the major player at 47% of total crypto market cap.

        It is a deflationary currency. Over time, its purchasing power increases. My dollars are slowly losing purchasing power. It costs a lot in electricity to produce each new bitcoin. It takes just a keystroke to print more dollars.

      • John, the cryptos are still created from thin air no matter how much electricity they consume and they are backed by nothing (when all is said and done). Perhaps it’s fair to say that each coin is worth what it cost in electricity to produce? Although it costs a fraction in Asia to produce one than it does, say, here.

        I come from a trading background so perhaps I look at the world differently to the average person, I don’t know. We’ll have to agree to disagree and see what happens in the future. Good luck.

      • The Traveling Wilbur

        BTC=TULIP
        Tulips served no function that any other flower which smelled as sweet could not have also performed. Same is true for any other crypto-currency produced to date (that isn’t backed by a tangible value-share, like bits of bricks in a house).

        Value is in the eye of purchaser.

        Don’t let the handwaving dumbasses pretend to you that there is any other argument.

    • Hey John

      Have you heard of ComingCoins? Fully anonymous blockchain technology
      There are only 20 million in circulation.
      Not enough for one for every Australian to have one each, let alone the result of the world

      They are nearly priceless, but I’ll sell you one for $100,000

      What do you think, you dopey prick?

      • “What do you think, you dopey prick?”

        Hey Coming – come on mate, let’s keep it civil. You are casting yourself in poor light using language like that. We are here for constructive debate.

      • Lol ok

        To apologize, I’ll give you a discount – $5000 for a ComingCoin

        Can transfer to your anonymous wallet as soon as the AUD hits my bank account

        Are you interested?

  5. OMG !?!? H&H – I HAVEN’T GOT THE TIME NOR THE CRAYONS TO EXPLAIN !!!

    HAVE BEEN A BIG FAN OF YOU AND MB!!! BUT THIS YOU HAVE WRONG – NOW GO PUT ON YOUR BIG BOY PANTS, AND PLEASE PLEASE GO EDUCATE YOURSELF !!!

      • LOL ! CLASSIC

        SORRY MATE- ALL MY $$$ SPENT ON BTC .

        OK?! YOU OPEN A BTC ACC, I WILL PAY YOU IN BTC AND AGAIN WILL BECOME A FULL PAID MEMBER OF MB .

        THEN YOU CAN PROUDLY SAY YOUR NOT A IGNORAMUS NO MORE …. DEAL ?

        COME OVER TO THE DARK SIDE AND TASTE THE COOLAID….

      • All caps.
        Triple exclamation marks!!!
        Incorrect spelling of “you’re”.

        It’s like the golden trifecta of how to have no credibility in an online discussion! Come on Ian. Our regular trolls have higher standards – lift your game!

      • Arrow2
        Im so sorry sir .i did not know my place. As an x MB member i promise to lift my game by never returning to your holy forum .Sadly you are lacking in the old banter department … And now i remember why i left MB. Not because of the good , reputable journalism and long Hours the MB crew put in. BUT IT,S THE – USELESS NEEDY ENTITLED GRAMMAR CORRECTING SELF ELECTED TROLL POLICE/CNUTS LIKE YOU …. AGAIN – I’M OUT !!

    • Ian is simply the account Reusa posts under on a night out after too much coke… nah, who am I kidding. There’s no such thing as ‘too much coke’ for Reusa.

  6. Bitcoin is certainly over-valued and is headed for a deflation if more countries follow China’s lead (though i remain doubtful of this).

    That being said, it will never cease to exist. It’s decentralized transaction recording system (i.e. blockchain) elicits far more trust than any Bank can these days and any currency is entirely dependent on the trust a holder has in it. Plus it’s far too useful to the black market for all the horrendous goods and services that humans love to consume but government’s don’t endorse like slavery, drugs, hitmen etc.

    ‘It’s just not a real thing’ didn’t seem to be a problem for the US dollar when it floated and was relatable to nothing other than what people would pay for it.

    Cats out of the bag so to speak.

  7. I think to smash Bitcoin, the banks are going to let a lot of people pile in first and then ask the government to destroy it. Which they can do in an instant. Make trading in it a criminal liability and 99% of users will disappear.

  8. boomengineeringMEMBER

    The guy at the bearing shop told me his mates made a killing on Bitcoin and asked me if he should,Tried to explain fiat, SDR’s etc in the end just told him keep away from it

  9. Bitcoin is backed by nothing. Come to think of it so are fiat currencies – and that’s the reason Governments had to make the proclamation that a dollar or a pound etc. is “legal” tender – to force the acceptance as a medium of exchange.
    Certainly “legal” tender money does not possess the attribute of being a store of value and neither will Bitcoin!

    • The only comment that makes sense.
      Fiat will stay
      Bitcoin will stay
      People will use drugs
      Govnuts will collect taxes
      These are all 100% guaranteed as well as life and death

    • Even StevenMEMBER

      Not quite.

      Statement: The ATO requires that taxes are paid in AUD.

      Question: What happens if a person doesn’t pay their taxes?

      Answer: You go to jail.

      AUD is backed by force.

  10. All assets only find their value in supply and demand…….. all currencies also the same, useful for trade.
    Value is perceived and intangible to some degree……….
    Shells were traded at one point as currency…… and beads……… in the near future it will be bottlecaps after the great war…….

    Saying bitcoin has no value is deny all currency development in history……. or maybe we are looking at this wrong, maybe this guy is right, so all the posts on here are pointless…. just ones and zeros with no intrinsic value………

    • total nonsense

      Fiat currencies have value because they are accepted for payment of taxes

      Payment of taxes is in turn enforced by the government’s monopoly on violence

      You have no idea what you are talking about

      • Non sequitur[?] coming from someone that just says incoherent is quite the feat.

        Violence in this use is highly emotive, couched in antiquarian platitudes, as is the inference that state equals violence, its such a monolith that some repeat as learned.

        I gave an actual example where violence for a rap sheet of offenses resulted in not violence, but fines. You utter philosophical limericks.

        This is compounded by your recent accusations without any thing to support, save your opinion, contrary to many of the views I broached yonks ago that are now being discussed. I did mention quite some time ago about poorly underwritten MBS, death spiral in the energy sector and higher prices due not to supply and demand but, the need for providers to service their debt.

        Disheveled…. sigh…. the violence inherited in the system… its funny when Python do it… others not so much…

  11. Prosecuted futures wrt a epic case of artificial scarcity then amplified by ideological demand pull….

    disheveled… how much energy will be spent till their all mined and what might that have been used for – ?????

  12. I’m on your side double H.

    Indeed I described it thus at a lecture today …

    Any investment that can’t produce an income is ponzi finance in extremis. This doesn’t mean you can’t make money investing in it but beyond the ‘capital gain’ there’s nothing to fall back on when the price collapses.

  13. The BTC blockchain only works because of the BTC incentive given to miners to process transactions. I call it self-referential though I’m not sure that’s the best turn of phrase. An attempt to build a shared ledger without built in incentives to do the maintenance work that give it value will fail. For this reason, I think the notion of a private blockchain is flawed. If the banks create their own blockchain for settlements, how will the maintenance work be divided up? What’s the incentive to get better at ledger maintenance? Does anyone have any exposure that could comment?

  14. Completly agree with H&H.
    “Block-chain technology is different and its unique transaction capability could be deployed into all kinds of stuff”
    Contracts, Registers of land transactions, voting, gross settlemebt systems….
    Bitcoin, the othr coinage are not the most powerful use. It is is easily the abilty to have a communal view (by counterparties) of positions and contracts.
    This link looks good:
    https://www.freshfields.com/en-gb/our-thinking/campaigns/digital/fintech/blockchain-and-smart-contracts/

  15. Thinking about this topic since yesterday. There is a huge irony here. We know that Satoshi Nakamoto was at least partly motivated to create Bitcoin because of the events of the GFC. He created a peer to peer trustless payment system to cut out unscrupulous middle men (banks). Why else would this line of text be embedded in the very first bitcoin block mined in 2009:
    “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.”

    Jamie Dimon at JP Morgan Chase bet against the toxic mortgage mess thereby profiting from the problem his company helped create. Then his bank was bailed out to the tune of billions of dollars. So they got fined a couple of hundred million. They guy should be in jail.

    Now we are listening to him telling us that Bitcoin is a fraud and that people who buy it are stupid. Bitcoin was created because of people like him.

    The proposition should not be: Bitcoin is in a bubble AND it is useless or will be useless. Bitcoin could be in a bubble but it is not useless. Some other cryptocurrencies are in a bubble. Vitalik Buterin (founder of Ethereum) had some interesting comments on the crypto bubble earlier in the week.

    https://www.financemagnates.com/cryptocurrency/news/ethereum-founder-vitalik-buterin-ico-bubble/

    As he says, there are many crypto coins created only for an ICO – they dont have a business model other than for fund raising. People will lose money on those. But Dimon seems only to be talking about Bitcoin – unless he does not know the difference between cryptocurrencies.

    As a trustless distributed payment system Bitcoin has been battle tested and continues to evolve and improve. It is the major and original cryptocurrency that people will continue to find a way to use. According to James McAfee it costs just over US$1000 in electricity to mine one bitcoin. Perhaps that sets its real value – I don’t know. You can chose to either get involved or stay away. But if we see more bailins, bailouts, banks behaving badly, federal money printing and inflation then I would bet that more and more people will become more and more motivated to find a way to use Bitcoin. At $1000 or $5000 – either price may seem very cheap in 5 years time.

    • The Traveling Wilbur

      What you have said above does not answer the two important questions. Yet again.

      1) Why is BTC different from any other coin that exists now or will exist in the future?

      2) If there are one or more such differences, how do they represent a value for BTC separately from the transactional service it provides (which is worth cents on the hundred dollars)?

      My bets are: you haven’t a clue; give yet another non BTC specific rambling response; try and talk up your own book again; mention mining costs of production again – which would be a waste of electrons thanks to this wonderful new invention called the sun – and free energy (with a few grand chucked in for battery storage as a one-off cost).

      But I could be wrong. Yeah, nah.

  16. I can see how Bitcoins and other cryptos threaten governments and their central banking business models. But unless all governments are in cohorts together allied against cryptos, governments that oppose cryptos run the risk of screwing over their people by preventing the uptake of a potentially very viable and lucrative technology. As such, I think governments secretly know that they must be careful in creating policies in their country that constrain the use of cryptos, even though they fear and oppose cryptos. As such, I believe cryptos will be here to stay in the long run, and will become gold 2.0. Thoughts?

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