Wow.
So I can imagine that this will turn into a big profit for them but the arguments are hilariously weak.
Granted they will get a lot of PR out of it.
I don't know. I remember a few years ago when people on reddit would get excited when some cafe in Bratislava or wherever started accepting bitcoin, or when Steam started accepting bitcoin. Now cryptocurrencies seem... boring. I see lots of people talking about "store of value", but actual use of bitcoin for what it was intended seems to be decreasing. And now people who want to gamble can just buy NKLA or SPCE or options on zero-fee brokers, which weren't a thing when bitcoin hit all-time high.
This is just my impression as an outsider, of course.
Here's a primer from HN's very own patio11, from back in late 2019 when they had only printed $4B: https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/
They sure write like they do. But they act like gamblers hoping for the next big score.
I assume it's "Our advisors can push mutual funds, they will be able to push trusts with the same fee structures and incentives to sell that hold an asset that has 10Xed before."
That alone seems like enough.
Let's say you don't believe BitCoin. If you have worked in finance, or had a financial advisor come to your company, you probably believe in their ability to sell.
People still think financial "advisors" (Series 7/63, CFP) know something / have interests besides pushing mutual funds.
Short of a crystal ball I don’t see how
Unfortunately, my experience working with MSTR has been that the expectation of competence isn't really born out in actual competence at a technical level.
I suppose you can only hope that at a management level it's a different story. They certainly seem to sell their product very well.
We don't see shopping cart inflation because it's countered by the technological cheapening of the production. And the key fact that new money is not being given to people buying groceries.
People avoid holding money by buying stocks and housing, not because of natural P/E ratio but forced by the continuously devaluation of cash.
What "money" do you expect businesses want to hold in this situation?
The entire purpose of QE and similar schemes is to reduce the value of the fiat currency relative to other things, in order to encourage people to swap their dollars for things (increasing consumption) or financial assets (increasing investment, at least indirectly).
The problem is that the investment doesn't seem to be happening, partly because of expectations of a future crash. By this point I suspect this has more to do with real-world factors (climate change is a serious obstacle to long-term economic growth) than government policy.
If we look back half a century in the US, the commodity held was gold. Or rather, federal reserve notes redeemable for gold.
Gold makes a good currency as it has the properties of a commodity that makes a good currency. It is durable, divisible, uniform, and portable.
Federal reserve notes a half century ago were even more portable. You could mark the bills or write down serial numbers and make the bills difficult to use if stolen. If torn, the Federal Reserve would issue you new bills.
Money or currency historically has been a commodity that had the above mentioned properties (durable, divisible, uniform, portable), so that it is convenient for trade. Really any commodity could be held to store value, although some store value worse than others (perishable food is not exactly durable).
When you get into very large sums which you may want to transfer around the world in a split second, you run into more of a problem of course.
Look at Compound Finance - $2 billion+ in assets deposited and over $1 billion borrowed https://compound.finance/markets
This can't be stopped - and there is no government regulating it!
Does anyone have the wallet address? or pinpoint it?
MicroStrategy moves its cash into Bitcoin; shares up 9%
Oh go home 2020, you’re drunk.
Its block reward, which constitutes a subsidy for its security budget, halves every four years.
Unless the halving of the security subsidy is made up for by additional transaction fees, Bitcoin's security decreases.
Given that Bitcoin blocks are full - with only a little space left for further optimizations via SegWit adoption and Schnorr signatures - transaction volumes cannot appreciably increase, and thus the only mechanism by which total transaction fees can increase is by the average fee per transaction increasing.
I can't see any way for transaction fees to ever reach the fantastical sums (e.g. $2,000 per transaction) needed to keep Bitcoin secure when the block subsidy becomes insignificant.
This wasn't the case back in 2015 when Bitcoin still had the hope of undergoing a hard fork to raise the protocol limit on its block size, which would have enabled it to increase the volume of transactions it processes by orders of magnitude. But now its governance structure is firmly captured by anti-hard-fork parties, so I see no long term viability in its protocol.
Hard-forking to remove the block size limit would have profound consequences for the decentralized nature of bitcoin - arguably its most important characteristic.
The minimum transaction size is 166 bytes.
This gives us maximum 25266 transactions/block.
The current block reward is 6.25 https://blockchair.com/tools/halving-countdown
This is worth about $72,000 USD https://duckduckgo.com/?q=6.250+BTC+to+usd&t=canonical&ia=cu...
This means that, to match current security without block rewards, transaction fees would need to rise by at least $2.84/transaction.
I don't see any reasonable case for the prediction that Bitcoin's average transaction fee will reach those extreme highs.
>Hard-forking to remove the block size limit would have profound consequences for the decentralized nature of bitcoin - arguably its most important characteristic.
I didn't say "remove". I said "raise".
I'm a believer on cryptocurrencies, but bitcoin being a first generation project, still has several pitfalls, such as transaction throughput, slowly trying to be addressed by other projects. What happens when people start flocking to ethereum, cardano, eos, or something else? Will it retain demand?
Maybe it will, considering that gold is almost as worthless, and it's still used as a major hedge against financial turbulence. But it's something to keep in mind.
might be an issue with it's completely unverified supply. Eth might work as currency of sorts but not as an asset to hold.
In a world where the governments can’t support their own currencies, nobody will give a shit about Bitcoin.
“I don’t trust the real hospitals because of medical negligence, better get my amputation done by that guy operating out of his garage just to be safe.”
Nobody has to trust anyone, that's the whole point of bitcoin.
It’s volatility would suggest otherwise. As many others have commented here an in other places, the fact that supply is predictable is not enough, demand is a factor too.
They may be genius Bitcoin traders, but clearly they are no longer Business Intelligence visionaries as they once were. A famous company that now admits it has no future. That's how I see it.
https://www.forbes.com/sites/michaeldelcastillo/2020/08/06/v...
Keep in mind that 250 mil, and 250 mil times 20 is a drop in the $214.4 billion bitcoin market cap and doesn't move anything. Just a sign of mild interest.
Furthermore, Grayscale just ran a crypto ad campaign on large TV networks such as Fox.
The daily trade volume is mostly people passing bitcoin to each other. If a whale like MicroStrategy is actually taking them out of an exchange, things will dry up quickly.
My guess the bitcoins were bought over a period of at least couple weeks, and probably using OTC trades as well.
So these orders are not hitting "the public market", it's coming from Grayscale inventory (not even that, since the companies aren't buying directly and taking custody).
Also, good point on BTC supply being less than the 21 mil cap / whatever was mined already.
https://news.ycombinator.com/item?id=18640755
Interesting to re-read this (and other) threads now that BTC is one of the best performing asset classes in 2020...
On the other hand, a treasurer that holds Euros because they have reasons to think the Euro will appreciate in value in the future is simply speculating. And using the company's balance sheet to do so.
This is looking like a bet. A well-reasoned bet, but a bet nonetheless.
The USD I think buys 15% less EUR than it did pre-COVID. Similar results even if you compare it to a basket of world currencies.
One US dollar can not fluctuate in value relative to itself. The "exchange rate" between USD and BitCoin fluctuates continuously.
USD is legal tender. You can buy a cup of coffee anywhere with USD. Not so with BitCoin.
USD does not have a bid/offer spread for transactions. BitCoin trades as two sided market.
USD can be deposited at bank, be protected by FDIC deposit insurance, and can earn an agreed rate of interest. Not so with BitCoin.
...stopping, though this could become a long list
BitCoin is an asset that can be bought or sold in exchange for USD. So is gold (as already noted), oil, company stock, lawn chairs, tracts of land, etc. A dollar-denominated asset is not the same as its market value in dollars.
Plus, Bitcoin is a valuable asset (for many people) and the reason it keeps its value is that it's safe. Energy is expended to keep it safe. That is a free market choice, and you can disagree with it, but many choose to pay for energy to protect Bitcoin.
The free market needs to be controlled when it destroys the environment. The people needs to be responsible for their actions.
