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December 5 2020 5.27pm

Bitcoin

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View cryrst's Profile cryrst Flag Chatham 25 Nov 20 8.08pm Send a Private Message to cryrst Add cryrst as a friend

Originally posted by SW19 CPFC

Correct about what, exactly? His modus operandi was that bitcoin (or more specifically lite coin) as an unregulated off book currency will eventually become the defacto method of financial exchange, bypassing the 'elite' system of governance and creating a happy utopia where everyone trades like one small rural village, in total harmony.

I've said it before, and will say it again, this is a complete nonsense. If you actually look into who is holding bitcoin and why, you get to the following points

A very small amount of people own a very large amount of bitcoin (Now where have I heard that before I wonder)

Almost all people who own bitcoin do not spend bitcoin. It is almost exclusively an investment purchase, which is unusual for a 'currency' that is supposed to be bypassing existing methods of 'control'. Why would you want to spend something that has the potential to massively lose or gain value at any moment?

At some point, governments will create blockchain versions of existing fiat currency (CBDCs), digital fiat, and that will then become the regulated system that is used. At that point, it is likely that unregulated coins and other exchange systems will be blacklisted or banned. Anyone who thinks an unregulated payment structure is going to usurp government run fiat currency is deluded. It's an utopian viewpoint that echoes that of some people in the early days of the internet, and that didn't exactly work out to plan did it?


Also PayPal are likely to be at least partly responsible for the initial increase in value here... they appear to be buying up more than all the supply of newly issued bitcoin that is available. This is creating scarcity and therefore driving price rises. There is then of course what is now termed as the 'Robinhood' layman investor effect (see tesla shares) which will no doubt lead to another spike and crash as before. Although I'd think the level it drops down to this time will be higher than the 3-4k lows of the last 3 years.

Why are Paypal getting into this space? It is not clear yet. But I doubt it's because they share the same utopian ideals as bitcoin devotees. It's a play to monetise and regulate at a commercial level, even if it's only to make money out of exchange fees (ironic).

China are also cracking down on miners and making it harder to convert bitcoin into Yuan so this is also likely to be reducing the amount of BTC in circulation, and driving up prices.

Am I invested in bitcoin? Yes, as I got in reasonably early and have enough to make a small but useful profit in the future. Do I think it will reach high levels at some stage, like 100k or more? Quite likely, as the more average joes invest in it the larger and more aggressive the swings in value will become. The hard part will be timing the sale.

A good time to buy

 

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