Future of Bitcoin

Yes, you better not make the U.S. consider you an enemy.

That said, most “good” countries in the world are aligned with the U.S. Who in their right mind in Switzerland or Europe wants to be less aligned with the U.S., when the alternative is more close alignment with Russia or China?

To be clear: I consider both the Russian and the Chinese government pretty evil organizations and will never defend what they are doing or what they stand for.

I just think the western governments are also becoming more and more authoritarian and over controlling. If you follow the cases of Snowden, Assange or the most recent arrest of Alexey Pertsev, the coder that developed tornado cash it becomes obvious that they don’t always have our best interest at heart. And CBDCs might become might become a really dangerous tool in this sense.

And why do I have to pick sides?

With digital property that can be easily transferred to every place in the world, the world is much bigger than just those two blocks. I can keep my options open.

It can’t really.

I’d argue that it’s property that doesn’t belong and isn’t tied to one particular jurisdiction.

The reality is that most places - as in merchants, landlords, transportation companies etc. - around the globe don’t accept Bitcoin. Your Bitcoin, let alone more obscure cryptocurrency, is utterly useless with them, unless converted into local fiat currency.

It’s not that obvious, in my opinion. Whether arresting that particular individual was justified is debatable.

But their objective of curtailing money laundering certainly is in what most (non-criminal) people would consider in their best interests.

I use my crypto visa card to make 90% of daily payments, and it accepts a lot of different cryptos. You are right for the final purchase it’s being exchanged to fiat, but until then it’s still crypto

Due to the very transparent nature of etherium, everybody who knows my address can check my balance and see every transaction I ever made. It is only natural that I don’t want that, that’s not money laundering, it’s just a common sense of privacy and should not be considered illegal. Even Vitalik Buterin used tornado cash to donate to Ukraine.

And while people are still arguing, communities are building.

Check this video of a bitcoin transaction WITHOUT internet:

https://twitter.com/BitcoinEkasi/status/1562568332783468545?t=TiycrToOX-VClAhBG9Tk6w&s=19

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That’s pretty amazing! Didn’t know lighting works without internet connection.

Here is a recent article on the lighting network from Lyn Alden:

*"Most people in developed countries have an incentive to spend their fiat and hoard their bitcoin like an investment, at least in this stage of the monetization process. The exception is for the subset of people who specifically need Bitcoin/Lightning’s permissionless nature for one reason or another, or for whom the majority of their liquid net worth is in it.

People in developing countries, with higher inflation and weaker payment and banking systems in general, have more of a natural incentive to use Lightning as a medium of exchange earlier on its monetization process. Indeed, adoption rates are rather promising in many of those regions. This isn’t surprising, considering that more people in developing countries have smart phones than bank accounts, in aggregate."*

I plan to set up a node myself and then force everybody around me to use it by not accepting any other form of payment :stuck_out_tongue_closed_eyes:

Yesterday I have a talk with a good Turkish friend living in Istanbul.
He told me that many people there had crypto wallets, but not as inflation hedge, instead for “having a chance to be rich”.
So even in a country with 70% inflation, it is not used as inflation hedge, instead just for speculation.
The point I believe in Turkey they are free to buy USD, and also they have some kind of saving bank account with an interest that matches the inflation. So they prob dont need the features that bitcoin offer.
I believe in Argentina where they can exchange not more than 100 USD a day, bitcoin is used for its unique monetary charasteristics (non confiscable asset).

The real value of bitcoin is that offers liquidity in environments where there a high risk of confiscation.
In how many places bitcoin needs to be used due to this unique feature. Not many.
I believe 300 billion market cap (current btc market cap) is more than enough for such a small market.

We could pay the groceries with a crypto visa, but there is not a need for that.
Even if bitcoin could be a real inflation hedge, we had already assets that helps to beat the inflation.
We might use btc for having transactions in minutes and with low cost, but I really don’t mind if my transaction takes one day. And very often transaction are free. Even if we want fast and low fee transactions there are other cryptos way better than btc.
So it is not a game changer for this use cases.

I believe bitcoin will be with us for decades, but in small niches.

So where is bitcoin used for its unique characteristics? In what cases? Then we could estimate a market cap required for such a market.

I want to rationalize my btc investment.

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I was always fascinated by the concept of the digital money, that works trustless, without governments and banks. Bitcoin will shine, when and where those institutions fail.

I bought my first bitcoin in 2017 at around CHF 2k, it went up to nearly 20 k and then crashed hard back to 4k. I went through the whole emotional rollercoaster before so this time I don’t care that much anymore when I look at the charts.

I think Bitcoin can be both a speculation and an investment, like most assets are. Some buy Bitcoin to keep forever (like me) and some just for a few days. The speculators are mostly gone at the moment, but they will come back as soon as prices go back up. And leave again in the next crash.

Daily transactions need to be made on a second layer. Bitcoin itself is pretty useless to buy some milk.

I guess longterm it could have a similar market cap than gold with 11,5 Trillion USD, so 30 x from it’s current market cap of 0,380 Trillion USD.

Governments never allow that Central Banks will loose their money supply monopoly. They just need to publish a new law, kind of if we detect u are using bitcoin you will get 100K USD fine or kind of 1 year in jail. Then everybody will not want to use bitcoin.
“Bitcoin’s greatest risk is its success,” Ray Dalio

I agree bitcoin was a brilliant idea, but I still think it is an over-engineering solution for most of cases.
We do not need crypto for paying groceries, it is cool but there is not a need. Merchants and customers will not migrate to shopping in bitcoin if there is no a gain. We don’t need a decentralize and unconfiscable solution for paying a bread. Cash/Visa/Mastercard works well enough, also they have a network effect moat, so not easy to beat.
Even we might end paying the shopping with bitcoin. The prices will be kept in FIAT units. Because bitcoin will be ever very volatile. Because it does not have an elastic supply. This is the same reason why gold price is very volatile. If the demand of bitcoin (or gold) increases, the supply can’t increase so the prices rise, and when the demand of bitcoin decreases, the supply can’t absorb bitcoins. So the future of bitcoin will be prob much less volatile than now, but still very volatile to be used as unit of account.

I am just trying to figure out in what scenarios bitcoin is really needed, a game changer, to rationalize a price and my investment.
And by now I only see environments with problems similar to Argentina, and by now they are not many. For such a problem a 400 billion market cap solution (current market cap) maybe is enough.

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I think those developments will be slower, but also bigger than any of us can imagine at the moment, similar to the early internet of the 90s. Similar to what people say today about cryptos, my boss at that time was so afraid of the internet that we only had one computer with internet connection the office because of “all the criminals and hackers in the internet”. :joy:

The really big investments into this space have not been made yet but they will be over the next 5-10 years.

Size your position according to your conviction: 0,1% -100%, if you think it’s a stupid Ponzi scheme, as many people do, don’t allocate any. Mine is at around 10%. I might be wrong and bitcoin might go to 0, but I believe it’s upside potential is way bigger than it’s potential loss.

I like interviews on “what bitcoin did” to get an idea of all the different used cases of bitcoin like the one with the president of El Salvador Nayib Bukele:

That’s the whole point, separation of money and state.

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I think this guy’s analysis shows reasonably well how we can expect Bitcoin to alternate between periods of stagnation and bear markets for up to 18 to 24 months still The Bitcoin Narrative Has Changed - YouTube

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The same way my Wise debit card “accepts” a lot of different currencies. They, the card issuer, just convert these currencies to the merchant’s local, government-controlled fiat currency.

I am also dumbfounded how one can one suggest to using a VISA card in the same breath as your comment that western governments are becoming more and more authoritarian and controlling - when VISA and Mastercard have been used to enforce U.S. sanctions on countries.

Can you make payments using your Visa card to an Iranian or Russian payee?

That’s the whole point: however unhappy they are with their governments at times, most people trust their governments and central banks for their currency. Well, at least more than a lawless internet currency that’s rife with scams, con artists and get-rich-quick nutters. Oh, and criminals.

Unless you’re living in an absolute monetary shithole, few people want to have money separated from the state and its rules and laws.

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Almost all the current and past crisis in my life time, if not all, are due to governments miss-allocation of capital. This is a debt/credit world, let’s see how it goes when governments lose their monopoly on it.

It is not lawless, there is a protocol ruled by mathematics and physics… :roll_eyes:

Btw, I see WAY more criminals in the current financial systems, so not sure about your points.

$339b in fines, not bad for a law-abiding industry :joy:

Industry: financial services
Penalty Total since 2000: $339,976,074,213

Source: https://violationtracker.goodjobsfirst.org/industry/financial%20services

No but I can send them bitcoin and nobody can stop that transaction. VISA/Mastercard is still the easiest way today to make small payments in the developed world, the lightning network might replace this in a few years. For us westerners Bitcoin is still just an insurance against failing monetary system, I could live without today but I prefer to have the safety of multiple options in the future.

My wallet shows me a ETH transfer fee of less than 0.2 USD, although I haven’t actually sent anything. Is it because of the switch to PoS or there is just less activity right now?

Less activity, no change in the fees with the merge, until the sharding

Most probably because the blocks happen in a shorter period of time with the merge. Not sure if it is by design though.