Bitcoin is still early

[jacoavlu]

I haven’t studied in depth but I think it’s a silly debate. This stuff happens in free markets. They are valid bitcoin transactions (or else they would be rejected by the network) it will be fun for a while then the excitement will die down.

[NapoleanDynamite]

In other news, I'm interested in hearing what you all think about Ordinals / inscriptions. NapoleanDynamite


I'm concerned about this, and there are a lot of potential problems in my estimation. It seems almost worse than the Blocksize War - this has the potential for the base layer to be completely bloated with NFTs leading to far higher transaction fees.

And I'm still trying to understand how they exactly inscribe the NFT into the base layer, but it looks like it's from the Taproot BIPs, that they're able to increase the arbitrary data limit up to the full block size instead of 80 bytes using op_return

Basically it exploits a hole in Taproot and SegWit that the developers didn't intend to be there. And apparently the witness transaction data is 75% cheaper than the financial transaction data. Since the NFTs are stored in the witness data with essentially no limit other than the blocksize, that means that you can mint NFTs for a lot cheaper, and drown out the financial transactions.

It also means that every full node of Bitcoin now has to download all the NFTs that people store. This of course also raises the risk of people putting illegal content into the Bitcoin record. I'm still trying to understand this, so maybe I'm wrong in some parts, but it doesn't look great.


Ordinals is discussed here:

https://read.pourteaux.xyz/p/illegitimate-bitcoin-transactions

And here on YouTube:

https://www.youtube.com/watch?v=mJr8yUf3dYk

Outdoors,

I have been offline for a minute so sorry I didn't get back to your question. If you really want to learn something about Ordinals, I would suggest you listen to Matt Odell's podcast Citadel Dispatch with Casey Rodarmor. It actually wasn't a very coherent podcast, but you can get a good feel for them.

My opinion of ordinals, or other jpegs/crap stored on the Bitcoin ledger is that it is completely pointless and doesn't accomplish much of anything of value. I would never "invest" or "buy" an NFT. I still think it is hilariously ironic that Jaco has a Monkey jpeg with laser eyes as his profile pic. He knows that monkey jpegs are crap.

Anyways, I do think they are here to stay for a while. The bitcoin core code is on version 22 right now (I believe). So the core code could be updated. But I doubt this will happen over the next couple years. What I think will probably happen is that as Bitcoin is further adopted, paying to inscribe things on the ledger will become too expensive and be "priced out" or people will just get bored as jaco mentions.

There is some incentive for miners (large mining companies) to promote this as their fees can/are rising with this. This could also be used as an attack vector if people want to put a bunch of kiddie porn on the ledger. Imagine if the government starts cracking down on people for running a node simply because some idiot inscribed code for a kiddie porn picture on the ledger.

In general I'm not an Ordinal's expert...but I think they are in general very stupid and hopefully will get priced out or just go away. I can't envision a situation where they are good for anyone but I may be wrong.

Good question as it has been a very hot topic lately with the mempool being much more full.

[The White Coat Investor]

easiest to just think of bitcoin as money. If someone wants to argue why it’s not money I’m happy to listen
?

Because it doesn't work for the stuff we use real money for? You know, like storing value and as a useful medium of exchange. But we've been over all this before. It may function as money at some point, but it doesn't right now. So it's just a speculative instrument. Someday maybe it will function as money. Right now it's more like something that may be money some day. In the meantime, it can be bought and sold and has a few niche uses.

[jacoavlu]

Because it doesn't work for the stuff we use real money for? You know, like storing value and as a useful medium of exchange. But we've been over all this before. It may function as money at some point, but it doesn't right now. So it's just a speculative instrument. Someday maybe it will function as money. Right now it's more like something that may be money some day. In the meantime, it can be bought and sold and has a few niche uses.

you’ve never actually tried to use bitcoin

by your definition of money, do you consider gold as money? how about the US dollar? Or the Argentine peso?

[jacoavlu]

Outdoors,

I have been offline for a minute so sorry I didn't get back to your question. If you really want to learn something about Ordinals, I would suggest you listen to Matt Odell's podcast Citadel Dispatch with Casey Rodarmor. It actually wasn't a very coherent podcast, but you can get a good feel for them.

My opinion of ordinals, or other jpegs/crap stored on the Bitcoin ledger is that it is completely pointless and doesn't accomplish much of anything of value. I would never "invest" or "buy" an NFT. I still think it is hilariously ironic that Jaco has a Monkey jpeg with laser eyes as his profile pic. He knows that monkey jpegs are crap.

Anyways, I do think they are here to stay for a while. The bitcoin core code is on version 22 right now (I believe). So the core code could be updated. But I doubt this will happen over the next couple years. What I think will probably happen is that as Bitcoin is further adopted, paying to inscribe things on the ledger will become too expensive and be "priced out" or people will just get bored as jaco mentions.

There is some incentive for miners (large mining companies) to promote this as their fees can/are rising with this. This could also be used as an attack vector if people want to put a bunch of kiddie porn on the ledger. Imagine if the government starts cracking down on people for running a node simply because some idiot inscribed code for a kiddie porn picture on the ledger.

In general I'm not an Ordinal's expert...but I think they are in general very stupid and hopefully will get priced out or just go away. I can't envision a situation where they are good for anyone but I may be wrong.

Good question as it has been a very hot topic lately with the mempool being much more full.

the money jpeg profile pic was an ironic response to a debate here

[Hank]

you’ve never actually tried to use bitcoin

by your definition of money, do you consider gold as money? how about the US dollar? Or the Argentine peso?

No, I don’t consider gold to be especially practical to buy a steak dinner or fill up a tank of gas. To the extent that one want to go down the rabbit hole of physically possessing precious metal for the “impending economic apocalypse” that’s always just around the corner, it would make more sense to own silver dimes (and ammunition, tins of food, etc.).

As for U.S. dollars and Argentine pesos, just last month I used my U.S. dollars to go to steakhouses, buy groceries and wine & beer, and generally had a great time in Argentina. I paid U.S. dollars in cash for one hotel for a couple nights.

We forgot our binoculars, so we visited a surprisingly nice gun shop and got a very nice new set of field glasses to watch penguins, seals, whales, and seabirds. All the prices in the gun shop were in U.S. dollars and they seemed to take only U.S. dollars in physical cash. All other transactions worked fine with a Visa credit card. No need to hit the ATM, Western Union, or screw around taking physical possession of Argentine pesos.

[The White Coat Investor]

you’ve never actually tried to use bitcoin

by your definition of money, do you consider gold as money? how about the US dollar? Or the Argentine peso?

Gold not really. US dollar and Argentine peso sure. They store value reasonably well (one better than the other obviously), at least in the short term and are certainly useful as a medium of exchange. Are you seriously arguing that the dollar isn't money? Look, you are entitled to your own opinions but not your own definitions. If you want to pretend is something else besides what everyone uses for money, knock yourself out. But don't expect anyone else to board the crazy train with you on that point.

I bought a Valentines Day card the other day. The store wouldn't take Bitcoin. I tried. Nope, wouldn't take it. I had to use the fake money US dollar stuff to get it.

[NapoleanDynamite]

Because it doesn't work for the stuff we use real money for? You know, like storing value and as a useful medium of exchange. But we've been over all this before. It may function as money at some point, but it doesn't right now. So it's just a speculative instrument. Someday maybe it will function as money. Right now it's more like something that may be money some day. In the meantime, it can be bought and sold and has a few niche uses.

This is factually incorrect.

Jim - You may not use it as money, but that does not mean many people around the world are not using it as money already. The Lightning Network is growing at an exponential rate specifically because of this. But we have been over this before. I have used it as money in the city that I live as many vendors accept it for payment.

But the underlying argument you are making is mostly true. In the US it is mostly being used as a store of value as it should at this stage in it's evolution. I'm not going to go back over my "speculative investment" argument again. Just look back a couple pages for my diatribe on that.

[jacoavlu]

Gold not really. US dollar and Argentine peso sure. They store value reasonably well (one better than the other obviously), at least in the short term and are certainly useful as a medium of exchange. Are you seriously arguing that the dollar isn't money? Look, you are entitled to your own opinions but not your own definitions. If you want to pretend is something else besides what everyone uses for money, knock yourself out. But don't expect anyone else to board the crazy train with you on that point.

I bought a Valentines Day card the other day. The store wouldn't take Bitcoin. I tried. Nope, wouldn't take it. I had to use the fake money US dollar stuff to get it.

you mentioned store of value and medium of exchange

if in your definition of money is store of value, well then you should consider gold better than anything, because its really the only money-like thing that has stored value reasonably over long periods of time. the dollar is a horrible store of value long term (decades, lifetimes) which is why people don't hold their wealth in dollars. bitcoin despite its volatility could be reasonably argued to be a better store of value than the US dollar. if I could choose to only store my wealth as a) US dollars or b) bitcoin over the rest of my life, I'd choose bitcoin. and of course the argentine peso is a ridiculous store of value, I think their inflation was like 99% last year.

if in your definition of money is medium of exchange, well then US citizens (a fraction of global population) wouldn't consider any other fiat currency as money because you can't go use pesos or pounds or yuan or whatever to go buy your wife a valentines card

even charlie munger admits to a base assumption that the long term value of the US dollar trends to zero

[Nash22]

This is factually incorrect.

Jim - You may not use it as money, but that does not mean many people around the world are not using it as money already. The Lightning Network is growing at an exponential rate specifically because of this. But we have been over this before. I have used it as money in the city that I live as many vendors accept it for payment.

But the underlying argument you are making is mostly true. In the US it is mostly being used as a store of value as it should at this stage in it's evolution. I'm not going to go back over my "speculative investment" argument again. Just look back a couple pages for my diatribe on that.

It is a ponzi scheme scam. Crypto's only legitimate inherent value is what you can sell it to to someone else. Someone will be left holding the bag of worthless beanie babies. The illegitimate value is using it to move money for criminal activities, where it is promptly converted/laundered back to currency. Or, for instance, creating scams to justify its existence (NFTs, the ponzi-within-a-ponzi).

I simply do not believe it has the technological efficiency to serve as actual money that people trade and hold. Compare the energy required for a crypto transaction to that of a cash transaction or a credit card transaction.

Agree completely with the concept of gold as a store of value. An ounce of gold would buy you a fine tailored suit in the year 1923, and it will do the exact same in 2023. Gold is money, by definition. You cannot say the same about the dollar. Bitcoin in 100 years? I'm not taking that bet.

Also, when has the US defaulted on its debt in the past? When it refused to honor gold and silver redemption promises.

[The White Coat Investor]

you mentioned store of value and medium of exchange

if in your definition of money is store of value, well then you should consider gold better than anything, because its really the only money-like thing that has stored value reasonably over long periods of time. the dollar is a horrible store of value long term (decades, lifetimes) which is why people don't hold their wealth in dollars. bitcoin despite its volatility could be reasonably argued to be a better store of value than the US dollar. if I could choose to only store my wealth as a) US dollars or b) bitcoin over the rest of my life, I'd choose bitcoin. and of course the argentine peso is a ridiculous store of value, I think their inflation was like 99% last year.

if in your definition of money is medium of exchange, well then US citizens (a fraction of global population) wouldn't consider any other fiat currency as money because you can't go use pesos or pounds or yuan or whatever to go buy your wife a valentines card

even charlie munger admits to a base assumption that the long term value of the US dollar trends to zero

It's not long periods of time when I need to store value. I can use real investments for that. It's money I earned last month that I need to pay taxes next month that I can't have dropping 30% in value.

I agree that pesos aren't useful money unless I'm in Columbia. When in Rome....

[jacoavlu]

It's not long periods of time when I need to store value. I can use real investments for that. It's money I earned last month that I need to pay taxes next month that I can't have dropping 30% in value.

I agree that pesos aren't useful money unless I'm in Columbia. When in Rome....

well of course you need to store value long term. You and I and basically everyone simply accept the reality that we can’t store our value long term in our fiat money because it doesn’t store value. But that hasn’t always been the case. Our modern governments did this to us

but that reality doesn’t make bitcoin not money.

[The White Coat Investor]

well of course you need to store value long term. You and I and basically everyone simply accept the reality that we can’t store our value long term in our fiat money because it doesn’t store value. But that hasn’t always been the case. Our modern governments did this to us

but that reality doesn’t make bitcoin not money.

Right. What makes bitcoin not money is the fact that it can't store value short term (and maybe not long term) nor be used as a convenient medium of exchange. I mean ancient Polynesians used huge stones as money. That doesn't make huge stones the preferred medium of exchange in our society. You can keep telling yourself it's money, but until you and the other Bitcoin maximalists convince lots and lots of people that are not yet convinced, it isn't. Money is what we all agree money is. And we clearly don't agree that Bitcoin is money at this time. Maybe at some future date.

By the way, it's not just me saying this like some lone wolf in the wilderness (which is how it feels when I talk about whole life insurance.) Take a look:

https://www.finextra.com/blogposting...ed%20as%20such.

https://seekingalpha.com/article/4549095-bitcoin-is-not-currency

https://www.forbes.com/sites/steveforbes/2021/02/02/bitcoin-is-not-money-yet/?sh=3d3b6793971c

https://libertystreeteconomics.newyorkfed.org/2020/06/bitcoin-is-not-a-new-type-of-money/

https://www.brookings.edu/opinions/the-brutal-truth-about-bitcoin/

https://www.brookings.edu/opinions/five-myths-about-cryptocurrency/

https://www.investopedia.com/ask/answers/100314/why-do-bitcoins-have-value.asp

https://www.sciencedirect.com/science/article/pii/B9780128021170000023

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3098765

https://www.cnn.com/2022/05/23/investing/davos-central-bank-digital-currencies-crypto/index.html

The common belief is that Bitcoin is not money. Therefore, it isn't money.

[jacoavlu]

Right. What makes bitcoin not money is the fact that it can't store value short term (and maybe not long term) nor be used as a convenient medium of exchange. I mean ancient Polynesians used huge stones as money. That doesn't make huge stones the preferred medium of exchange in our society. You can keep telling yourself it's money, but until you and the other Bitcoin maximalists convince lots and lots of people that are not yet convinced, it isn't. Money is what we all agree money is. And we clearly don't agree that Bitcoin is money at this time. Maybe at some future date.

By the way, it's not just me saying this like some lone wolf in the wilderness (which is how it feels when I talk about whole life insurance.) Take a look:

https://www.finextra.com/blogposting...ed%20as%20such.

https://seekingalpha.com/article/4549095-bitcoin-is-not-currency

https://www.forbes.com/sites/steveforbes/2021/02/02/bitcoin-is-not-money-yet/?sh=3d3b6793971c

https://libertystreeteconomics.newyorkfed.org/2020/06/bitcoin-is-not-a-new-type-of-money/

https://www.brookings.edu/opinions/the-brutal-truth-about-bitcoin/

https://www.brookings.edu/opinions/five-myths-about-cryptocurrency/

https://www.investopedia.com/ask/answers/100314/why-do-bitcoins-have-value.asp

https://www.sciencedirect.com/science/article/pii/B9780128021170000023

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3098765

https://www.cnn.com/2022/05/23/investing/davos-central-bank-digital-currencies-crypto/index.html

The common belief is that Bitcoin is not money. Therefore, it isn't money.

your definition of money is rather arbitrary

[Nash22]

There are lots of people who think bitcoin is worthless and would refuse to accept it.

I'm not aware of any point in history where any significant group of people has deemed gold worthless and would refuse to trade something for a gold coin. Ever. I don't think any credible person believes that gold would or ever even could be worthless. You can't say the same about bitcoin, and even about the US dollar. 2% inflation of the dollar is considered the goal, therefore by intent one dollar will trend to 0.

This makes the hate on the goldbugs...curious.. to say the least