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Bitcoin price discussion and analysis

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Value Collector said:
Would you take out a home loan for $x amount of Bitcoin?
Click to expand...

https://bitcoin-realestate.com/

And 3 years ago...
https://www.cnbc.com/2017/10/13/london-mansion-on-sale-bitcoin.html#:~:text=An%20%C2%A318%20million%20(%24,4%2C000%20bitcoin%20at%20Friday's%20price.


Value Collector said:
Would you sign an employment contract and promise to pay staff $x amount of bit coin per week for the next 2 years?
Click to expand...

Some people are already paid part cash, part crypto. It's happening now


This is from 2014...

​
 
DB008 said:
https://bitcoin-realestate.com/

And 3 years ago...
https://www.cnbc.com/2017/10/13/london-mansion-on-sale-bitcoin.html#:~:text=An%20%C2%A318%20million%20(%24,4%2C000%20bitcoin%20at%20Friday's%20price.




Some people are already paid part cash, part crypto. It's happening now


This is from 2014...

​
Click to expand...


You are missing the point completely.

I did not ask would you buy a property using Bitcoin, I asked would you take out a home loan denominated in Bitcoin.

For example, would you be willing to buy a house that’s worth $690,000 or about 30 Bitcoins and pay for it with a loan where you promise to pay back 1 Bitcoin a year for 30 years?

it would be an interest free loan, however if in 2 years time Bitcoins are worth $200,000 you are going to be bankrupted and Bitcoin drops to $200 the lender will be bankrupt.

my point is that it far to volatile to be used in any of the normal long term contracts we regular do in society, hence why it’s no a real currency.

think about if you signed up for a Bitcoin Home loan when Bitcoin was worth $500 and you promised to payback 1 Bitcoin a week for 30 years,.... good luck making the payments.

Some people are already paid part cash, part crypto. It's happening now
Click to expand...

You can bet that each week they are paid based on Dollars that are coverted each week into crypto, their wage is NOT based on fixed amount of crypto per hour.

think about it, would you sign up to pay an employment contract for 5 years paying a guaranteed 5 Bitcoin a year, not knowing how much that 5 Bitcoin will be worth in 6 months???

either party to that employment contract could be screwed depending on where Bitcoin price goes.
 
Some great trading on some of these coins at the moment.

Hope the interest keeps up. It was a long wait till we saw action again.
 
Value Collector said:
You are missing the point completely.

I did not ask would you buy a property using Bitcoin, I asked would you take out a home loan denominated in Bitcoin.

For example, would you be willing to buy a house that’s worth $690,000 or about 30 Bitcoins and pay for it with a loan where you promise to pay back 1 Bitcoin a year for 30 years?

it would be an interest free loan, however if in 2 years time Bitcoins are worth $200,000 you are going to be bankrupted and Bitcoin drops to $200 the lender will be bankrupt.

my point is that it far to volatile to be used in any of the normal long term contracts we regular do in society, hence why it’s no a real currency.

think about if you signed up for a Bitcoin Home loan when Bitcoin was worth $500 and you promised to payback 1 Bitcoin a week for 30 years,.... good luck making the payments.
Click to expand...

Isn't this the same risk incurred when you choose to take out financing denominated in another currency? For instance, if I was in Venezuela and chose to take out a home loan in USD but paying in Bolivars; chances are, I'd be in a similar predicament in a few years. Both are considered real currencies.
 
kenny said:
Isn't this the same risk incurred when you choose to take out financing denominated in another currency? For instance, if I was in Venezuela and chose to take out a home loan in USD but paying in Bolivars; chances are, I'd be in a similar predicament in a few years. Both are considered real currencies.
Click to expand...

The difference is that none of the actual currencies you mention have the volatility of bitcoin and the other cryptos, once a currency gets mismanaged and becomes volatile it begins to lose its functionality as a currency, and will generally be replaced or revalued.

Even when gold was used to back currency they had to set legal price limits to gold to try and take out the volatility.

But also the main difference is the acceptance of the currency, in their home markets each currency has universal acceptance, eg you get paid in that currency, you shop in that currency, you sign leases and loans in that currency, Bitcoin is no where near close to that acceptance so it is definitely not a real currency, and probably will never be because of that uncontrollable volatility, The same reason we had to get rid of the gold standard is the same reason that bitcoin won't be a currency.

If there is ever a real crypto currency, it will be one that has mechanisms where it can be controlled by the like of the federal reserve or some other central bank.
 
Value Collector said:
my point is that it far to volatile to be used in any of the normal long term contracts we regular do in society, hence why it’s no a real currency.
Click to expand...
As a simple unit of exchange BTC is a complete failure, this is one of the things that turned me off BTC back in the day - just to volatile to be a genuine unit of exchange, and that volatility is partly driven by the cost of verifying transactions, mining is crazy expensive.
 
Lightning on BTC makes BTC free to use for transactions and pretty much instant. So you can buy a cup of coffee and the fees don't cost more than the coffee.
 
So_Cynical said:
As a simple unit of exchange BTC is a complete failure, this is one of the things that turned me off BTC back in the day - just to volatile to be a genuine unit of exchange, and that volatility is partly driven by the cost of verifying transactions, mining is crazy expensive.
Click to expand...
You were on it pretty early from memory. Did you get on board?
 
Value Collector said:
You are missing the point completely.

I did not ask would you buy a property using Bitcoin, I asked would you take out a home loan denominated in Bitcoin.

For example, would you be willing to buy a house that’s worth $690,000 or about 30 Bitcoins and pay for it with a loan where you promise to pay back 1 Bitcoin a year for 30 years?

it would be an interest free loan, however if in 2 years time Bitcoins are worth $200,000 you are going to be bankrupted and Bitcoin drops to $200 the lender will be bankrupt.

my point is that it far to volatile to be used in any of the normal long term contracts we regular do in society, hence why it’s no a real currency.

think about if you signed up for a Bitcoin Home loan when Bitcoin was worth $500 and you promised to payback 1 Bitcoin a week for 30 years,.... good luck making the payments.



You can bet that each week they are paid based on Dollars that are coverted each week into crypto, their wage is NOT based on fixed amount of crypto per hour.

think about it, would you sign up to pay an employment contract for 5 years paying a guaranteed 5 Bitcoin a year, not knowing how much that 5 Bitcoin will be worth in 6 months???

either party to that employment contract could be screwed depending on where Bitcoin price goes.
Click to expand...
Value Collector said:
You are missing the point completely.

I did not ask would you buy a property using Bitcoin, I asked would you take out a home loan denominated in Bitcoin.

For example, would you be willing to buy a house that’s worth $690,000 or about 30 Bitcoins and pay for it with a loan where you promise to pay back 1 Bitcoin a year for 30 years?

it would be an interest free loan, however if in 2 years time Bitcoins are worth $200,000 you are going to be bankrupted and Bitcoin drops to $200 the lender will be bankrupt.

my point is that it far to volatile to be used in any of the normal long term contracts we regular do in society, hence why it’s no a real currency.

think about if you signed up for a Bitcoin Home loan when Bitcoin was worth $500 and you promised to payback 1 Bitcoin a week for 30 years,.... good luck making the payments.



You can bet that each week they are paid based on Dollars that are coverted each week into crypto, their wage is NOT based on fixed amount of crypto per hour.

think about it, would you sign up to pay an employment contract for 5 years paying a guaranteed 5 Bitcoin a year, not knowing how much that 5 Bitcoin will be worth in 6 months???

either party to that employment contract could be screwed depending on where Bitcoin price goes.
Click to expand...
The only sense in borrowing money and paying interest is if it is denominated in a currency being progressively debased for whatever reason... "Inflating away the debt" sorry to speak.

Therefore if you would take out a mortgage in cryptocurrency you a structure it in such a way that that would happen if you had any brains.

you would make more sense to take out a mortgage in fiat and be paid and something like Bitcoin. Then you get the double effect of your debt inflating away and your means of payment massively inflating in value.

The idea of Bitcoin has never been to replace fiat but to outsmart it.

Same principle with gold, borrow in fiat get paid in gold if you can organise things in that way.
 
wayneL said:
The only sense in borrowing money and paying interest is if it is denominated in a currency being progressively debased for whatever reason... "Inflating away the debt" sorry to speak.

Therefore if you would take out a mortgage in cryptocurrency you a structure it in such a way that that would happen if you had any brains.

you would make more sense to take out a mortgage in fiat and be paid and something like Bitcoin. Then you get the double effect of your debt inflating away and your means of payment massively inflating in value.

The idea of Bitcoin has never been to replace fiat but to outsmart it.

Same principle with gold, borrow in fiat get paid in gold if you can organise things in that way.
Click to expand...
Mortgages make sense in any stable currency, even if the currency was appreciating by 2% a year it would still make sense in a lot of situations to take on debt, the key is stability but you wouldn’t even want to have a 30 day credit card debt denominated in something as unstable as Bitcoin.

you can get paid in gold if you like or bear skins or diamonds, but none of them are currencies they are commodities, and commodities do predate currencies as units of exchange, but we moved away from barter for very good reasons
 
Value Collector said:
Mortgages make sense in any stable currency, even if the currency was appreciating by 2% a year it would still make sense in a lot of situations to take on debt, the key is stability but you wouldn’t even want to have a 30 day credit card debt denominated in something as unstable as Bitcoin.

you can get paid in gold if you like or bear skins or diamonds, but none of them are currencies they are commodities, and commodities do predate currencies as units of exchange, but we moved away from barter for very good reasons
Click to expand...
Which are?
 
wayneL said:
Which are?
Click to expand...

which are what? Are you asking what situations it would make sense to take on debt in an appreciating currency?

You would simply just think of the 2% appreciation in the currency as being equivalent to interest, so as long as the interest rate on the loan is still low enough to when you add the 2% appreciation on then it makes sense.

think of it like this in a world with 2% inflation, a 5% loan interest rate is really a 3% interest rate.

So in a world with 2% deflation, the appreciating currency means a 1% interest rate is really a 3% interest rate.

so as long as the interest rate you pay combined with the appreciation rate is still lower than the return on investment you will make with the funds, taking out the loan still makes sense.

As I said what is important is the stability, over time, not whether it is deflation or inflation, either one is ok as long as it’s maintained in predictable rates, and doesn’t wildly fluctuate daily, weekly or yearly by amounts that could bankrupt you.

Or,

were you asking what were the reasons we moved away from bartering? I thought they were self evident, not only is barter cumbersome, but the underlying commodities are again not stable enough, take out a mortgage denominated in wheat or Iron ore faces the same risks I mentioned as Bitcoin, but at least they are real assets and their price will probably never drop to zero out side of any temporary short term contracting anomaly.
 
re BTC volatility; tl;dr it's getting closer to currency pairs over time.

Bitcoin Volatility vs Other Assets : Woobull Charts

charts.woobull.com charts.woobull.com

blog.kaiko.com

Volatility and Correlation: Bitcoin vs Gold, Fiat, and Equity Markets

An analysis of the evolution of historical volatility and cross-asset correlations in 2020
blog.kaiko.com blog.kaiko.com

@Value Collector re currency comments; I agree at this point BTC behaves more like a commodity than a currency and to finance with it would be similar to bartering with the same complications.

I wonder how long before hedging facilities appear to manage the volatility of cryptocurrencies?
 
Value Collector said:
which are what? Are you asking what situations it would make sense to take on debt in an appreciating currency?

You would simply just think of the 2% appreciation in the currency as being equivalent to interest, so as long as the interest rate on the loan is still low enough to when you add the 2% appreciation on then it makes sense.

think of it like this in a world with 2% inflation, a 5% loan interest rate is really a 3% interest rate.

So in a world with 2% deflation, the appreciating currency means a 1% interest rate is really a 3% interest rate.

so as long as the interest rate you pay combined with the appreciation rate is still lower than the return on investment you will make with the funds, taking out the loan still makes sense.

As I said what is important is the stability, over time, not whether it is deflation or inflation, either one is ok as long as it’s maintained in predictable rates, and doesn’t wildly fluctuate daily, weekly or yearly by amounts that could bankrupt you.

Or,

were you asking what were the reasons we moved away from bartering? I thought they were self evident, not only is barter cumbersome, but the underlying commodities are again not stable enough, take out a mortgage denominated in wheat or Iron ore faces the same risks I mentioned as Bitcoin, but at least they are real assets and their price will probably never drop to zero out side of any temporary short term contracting anomaly.
Click to expand...
I'm sorry you didn't understand the question I asked you, possibly my fault it was not very explicit.

I went by the expanding but you could do yourself a favour and study up on the history money, our current reserve currency, with particular attention to the difference between gold backing and fiat of such, when things changed, and why.

I would hope for an epiphany for you, but that's really up to you.

Good luck.
 

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