Cryptocurrency Discussion Thread

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BTC managed to break past the $100k ceiling today and is currently hovering around ~103. I’ve been trawling some crypto forums this morning and some observations as follows, broken down into Bullish/Bearish. (The below aren’t necessarily my own views, just a summarised compilation of some of the articles and comments I’ve read):

Bullish:

Sentiment in crypto-bullish communities seems to be that the $100k barrier, once achieved, will be the new ‘confidence benchmark’ for larger institutions, investing communities and whole countries to recognise BTC as a serious, viable and invest-able asset class. There is an impression that the much wider adoption of the asset in 2024, particularly by classic investment institutions, will serve as a stabilizer for BTC, and therefore it may not be subjected to the same drastic corrections it’s suffered in the past, such as the ~50% price corrections in 2021-22. Belief also appears to be that 100k is the new ‘springboard’ to pave a more confident path towards $1m. Key themes: National Reserves, record ETF inflows, distrust of modern banking, pro-crypto presidency, viability as a currency,

Bearish:

A smaller (obviously, in a bull market) but noticeable number of people seem to have slightly more bearish views, including the notion that despite the significant market cap increase, BTC remains an inherently volatile asset class due to attitudes towards it remaining largely ‘immature’; i.e., that a significant portion of its market cap is predicated on heavy consumer speculation rather than an inherent understanding of its purpose and long-term potential. Some anticipate a continued increase in the short term with a necessary correction to sub-90k by year-end. Others have suggested that the proof of BTC’s continued volatility would appear if anything negatively impacted Trump’s presidential term; in other words, that the current bull market is heavily and dangerously reliant on one individual. There is also concern that despite wider adoption throughout 2024, there remains a core lack of understanding of the function of BTC and cryptocurrencies as a whole. Key themes: dangerous speculation, blind investing, FOMO, investing for wrong reasons, reliant on 1 person/government term.

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Sources:
CoinDesk
r/Bitcoin (lol I know, but it’s good to gauge sentiment)
BBC News
Bloomberg
Blockonomi

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I acknowledge upfront that I’m a hater, but the (seeming) obsession with BTC and coins in general really bewilders me. It’s based on just speculation. There’s no asset behind it and there’s very limited ways and places you can use it. Mining is also very much not environmentally friendly from what I understand. I’m really not trying to start an argument, but I just don’t understand the desire to participate. I would so much rather invest slowly for the long haul than worry about a 50% or more price correction in any given year or think about significant swings if certain famous people do or don’t get on board.

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Another thing that persists which I noticed while compiling the above, is that, even in a bullmarket, conversation around crypto can be incredibly argumentative in places. I think that echoes in what we see in the TCG and the speculative elements we see impacting markets here, too. There’s a sense of desperation on the one hand, among the people who see it as a means of gaining accelerated wealth, vs those who have reasonable reservations about it. I think it’s just the moneymoneymoney effect.

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Not to overgeneralize but a lot of crypto people (not all) make it an identity and then they see reasonable critiques as an attack on their identity

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Yes, plus the fact that the classic route of slow-and-steady, DCA, responsibility, risk-assessed investing… nobody seems to want to hear it anymore. It’s tried and tested, the data is there, but… it flies in direct contrast to the modern sentiments of everything now…quickquickquick stonkstonkstonk! Lambo NAO!. I dunno if it’s a generational need for instant gratification or if it’s more nuanced than that, but it manifests itself in some very negative ways.

Personally, I have a very modest position in BTC, but it’s treated in the exact same way as my SP500 investments: monthly DCA, 10+ year time horizon, just at a smaller volume. I only invest in what I understand, and my reservations about the speculative aspects of BTC are the only reason I’m not giving myself heavier exposure.

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Reasonable approach. I feel like treating it as “funny money”, like money you’d blow at a casino and not be upset if you never saw it again, is healthy and if you see a huge upside, that’s cool. But I’ll never understand the hardline “this is the most important asset of our time, this is what we’ll have when the financial system fails” followers. I don’t fully understand the $1m folks either. We’re 10% of the way there. We’re still more likely to have it crash to nothing at this stage.

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Not to mention the vested interests, that’s another thing they seem to have in common.

I would never get into an argument about the nutritional deficiencies of farmed salmon and how it’s essentially a broiler from a water tank with someone who’s made millions and billions off of it.

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The desire to participate is money. I wish it was anything else. It can’t perform as anything else it “intends” to do.

Cryptocurrency is the perfect answer to an impatient populace disenfranchised with a world they can’t change.

The way out. The redistribution of wealth.

The rich people that tell us to buy Bitcoin are definitely on our side this time.

This time, we get the money!

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Lmao, very well put.

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Well put I think. If you believe everything is fucked, it’s hard to agree to do things the tried and true way. That said, it’s a very “I got mine” mentality. BTC pushing 100k today necessarily means that additional people will have a harder time getting in, so we’ve really just created a parallel version of a market with the same problem

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This is what I have done since Jan 2021, daily DCA into bitcoin and periodically sweep my purchased bitcoin into cold storage. I finally made a proper budget in 2021 and figured out exactly how much I could afford after all expenses and 401k/IRA contributions. I only DCA what I can actually afford to lose and it’s truly just the excess money I don’t need.

Instead of saving that excess in dollars, I save in bitcoin. With this strategy I can stomach the volatility because I’m not losing my lifestyle or well-being when bitcoin crashes. I still can pay my bills and save for retirement even if I lost all my bitcoin or its value.

I’ve talked about BTC here before, but it’s something I generally don’t talk about online anymore. I try to have conversations that aren’t rife with hype or speculation, but even with purely fact-based discussions people can become volatile and closed off about it. I have close to 1000 hours studying this thing in the last 4 years and even in highly detailed replies online, it’s still so difficult to communicate understanding to grasp why Bitcoin is significant. For me personally, it’s primarily about optionality and security. Bitcoin is reliably secure and gives me direct control over my wealth with no counterparty risk.

For anyone interested in figuring out if this thing matters or not for you and whether you should start accumulating, I prefer to just recommend various publications. These can say it better than I can and may help you on your bitcoin journey:

The Bitcoin Standard: The gold (lol) standard book for introduction to bitcoin. 4/5 of the book is about money, history, culture and economics and only the last bit is about bitcoin. It provides socioeconomic context to help explain why bitcoin is so unique and important. This was the book that made me start accumulating bitcoin.

The Bullish Case For Bitcoin: this one is my favorite bitcoin book. It’s succinct and free of fluff, bias and hype. It focuses on the economic significance of bitcoin’s properties that allow it to continue to gain support and value over time.

Broken Money: Published last year, this goes into our monetary history far deeper than the The Bitcoin Standard and in my opinion is the better of the two. Because it goes much deeper, I think The Bitcoin Standard is better first, but this might be the most important book I’ve read to better understand bitcoin’s significance in our debt-based fiat monetary system.

Check Your Financial Privilege: This book talks about all the ways globally that bitcoin has served communities, women, oppressed citizens, citizens living in a country with hyperinflation, etc. It gives several specific cultural examples of people benefiting from bitcoin in various ways. This recommendation is the best response to anyone who says bitcoin is useless or has no inherent value. Most people say that from a place of financial privilege, but for many oppressed or unbanked people, Bitcoin has been the life raft they’ve needed to persevere.

Bitcoin: Everything Divided By 21 Million: This book is more philosophical than technical or economic, but it’s a great way to develop your perception of bitcoin.

Mastering Bitcoin: this is one of the most technical and thorough books written about how bitcoin works. Not recommended for beginners, I don’t fully grasp some of the technical explanations in this book, but it is educational nonetheless and great for those with a computer science background.

The Price of Tomorrow: not really a book about bitcoin. This book discusses the deflationary process of advancing technology inside a debt-based fiat monetary system. It discusses what should be happening to prices with exponential increases in technology and productivity vs. what is actually happening as inflation continues to erode our purchasing power. It only briefly mentions bitcoin at the end when discussing possible solutions for system like ours that has no hard backing to its currency anymore.

A Look at the Lightning Network: by the same author as Broken Money, Lyn Alden gives a deep dive into how currencies emerge as mediums of exchange. The lightning network is a layer 2 payment solution to Bitcoin’s slow transaction speed and cost. It still has a lot of development to go, but the article mostly talks about the process behind the stages a money must go through to be used as a medium of exchange. Most people denounce bitcoin because it’s not taken off as a currency, but this article goes deep into why a money must first develop as a store of value before it becomes recognized as a medium of exchange and then a unit of account.

Bitcoin mining and grid stabilization: Bitcoin gets a lot of heat for its energy usage, but few people are aware of bitcoin mining’s unique ability to help stabilize energy grids by enhancing load flexibility. Miners serve as a powerful catalyst for renewable energy development and growth. In summary, renewable energy can have a lot of issues with load flexibility, I.e. having too much energy when there isn’t demand for it, or not enough when there is more demand. If you hook bitcoin miners up to that system, they have the unique ability to turn on and off their power usage depending on the demands of the grid. What that means is we can grow renewable energy systems faster and make them more robust. We can build large enough systems that ensure we always enough energy, but when we overproduce more than what the region needs, then the energy waste is turned into bitcoin revenue via mining. It encourages more investment and expansion into renewables when we have this type of load flexibility tool available. Bitcoin is important to me as a saving vehicle and I think it’s potential improve the lives of individuals cannot be understated, but in my opinion the ability to stabilize energy grids may be bitcoin’s most important utility.

Bitcoin Sessions Finally, if you are at the point where you want to start accumulating bitcoin, this is probably the most comprehensive channel to learn about buying and spending bitcoin and basics of how to use bitcoin, private bitcoin wallets, security, mining, home mining heaters, etc. Pretty much all the practical basic and advanced topics you’d need to get started.

TL;DR: Bitcoin education.

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This was going to be my question to you. I understand the concept and traditional method of obtaining but i’m very shakey on the way to transfer as payment. How is bitcoin currently being used for payment? My current understanding is that, like pokemon cards, very few people are willing to take them in place of cash. How difficult is it to transfer to the wallets of others without relying on a trading platform/service?

Disclaimer: Im a very casual bitcoin observer

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It depends a lot in the receiver what third party you may need to use, if at all.

The most fundamental way to transfer bitcoin without a third party is to send bitcoin to someone’s public deposit address directly from your cold storage Bitcoin wallet. I use ColdCard and the process works like this:

I use a program called Sparrow on my laptop. I have my wallet public key loaded into Sparrow. This is referred to as a watch-only wallet. It allows me to monitor my wallet and deposit addresses without Sparrow having access to the funds. To spend some bitcoin and send to another bitcoin wallet, I first create the transaction in Sparrow, including the amount, the fee I want to pay (the more you pay the faster your transaction is confirmed), and the receiving address.

Then I save the transaction file to a formatted SD card, which I then insert into my ColdCard SD slot. This is called an air-gapped wallet in that it never connects to my computer or the internet. The ColdCard is what houses my private key. With the SD card in the ColdCard, the device will recognize a saved bitcoin transaction. In the screen it displays the transaction details to ensure accuracy, and then I can hit confirm to sign the transaction. This signature is essentially the authority the network needs to see to spend bitcoin from this wallet.

I then insert the SD back into my computer, load the signed txn into Sparrow, and broadcast to the network. Depending on the fee and when the next block is found, the transaction will be confirmed in 1-60 minutes generally, but longer if you pay with low fee relative to current fee average (found on website: mempool.space).

Obviously this is very clunky, but other than using Sparrow to broadcast the transaction, no third party actually touches or has access to my coins. I use bitcoin as a savings account, so the slowness isn’t an issue, but there are technologies that significantly speed this process up in fewer steps. You can also just keep your coins in a hot wallet such as on an exchange and spend from there, but this is not recommended due to hack risk or risk the exchange or company goes dark.

My plan is to continue to save and then when I’m ready to spend in a few years, I can do so directly to businesses that accept bitcoin or by sending to an exchange and trading for USD to then spend.

Spending directly you need to make sure you trust the receiver or have already received goods/services before you pay. The reason is because direct base chain payments are not reversible, so no bank can step in and get your coins back if you send them to someone and get scammed.

Exchanging for USD makes spending your bitcoin easier, but the drawback there is that you have to rely on an exchange to not delay you or hold your funds for some reason. Both options take some getting used to in order to avoid issues.

Outside of this vault type of process to spend, the most common method for more practical payments that businesses use is the lightning network. This is much more centralized as this would require you to actually send your bitcoin to a hot wallet (wallet connected to the internet) provided by a third party lightning payment provider. This short video is an example of the customer using an app that is supported by the restaurant.

You first send bitcoin to your phone hot wallet app, then scan the QR code at the point of sale. A lot of people try to gloat about how fast it is, but I really don’t think the speed is the innovation since payments are already fast for the customer with card swiping/tapping. It’s really the cost and simplicity that makes it innovative. Your debit card has multiple backend banking steps and settlements that occur before actual final settlement is done, sometimes days or weeks after you scanned you debit card. That’s why some businesses charge you an extra 3% when you use a card as they have to pay these processors a fee.

With bitcoin lightning payments, the cost is fractions of a penny and the payment is much more direct than needing lots of intrabank settlement steps. Layer 2 lightning still has a long way to go, maybe even a decade before it’s a seamless payment option that’s more secure and more user friendly than it currently is.

Those are the primary two ways to pay with or spend bitcoin, but my favorite idea is something called Fedimint. It’s still in its very early stages and I don’t think I could explain it more clearly than the link does, but it’s essentially a way to improve the interoperability and privacy of the lightning network. It basically creates these modules called Fedimints that allow communities to transact within, without having to constantly open new lightning channels, which is one of the challenges with lighting. A simple metaphor to think about this is lightning payment channels are like the highways between cities. A fedimint is like the city’s roads and side streets. It’s hard to describe the significance of this without going deep, but that link will teach you everything about it if interested.

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I appreciate the explanation! Lots of verifications and steps to keep it safe but it makes sense. I can see why most people would be unnerved by it and I hope that one day I can also trust btc to be a slightly volatile IRA, if im understanding the explanation of how you personally use it correctly.

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Pretty much, I use it as a savings account that is volatile, but historically towards the upside over time.

The other thing I’ll mention is if you’re interested in getting bitcoin exposure without needing to worry about the technicalities, the newly approved spot Bitcoin ETFs just launched this year. These directly track the price of bitcoin.

This is a way to have direct bitcoin exposure in your IRA, brokerage or retirement accounts without really needing to learn about bitcoin. Here are the tickers:

https://blockworks.co/bitcoin-etf

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Thanks for taking the time to do a detailed breakdown of the reading material. The only book in that list I can honestly say I’ve read is the Bitcoin Standard, but I’m definitely picking up some of the others (particularly on the Lightning Network as I’d like to understand that better). Thankfully getting 2 straight weeks off over Christmas so plenty of time to dig in.

I’ve talked about BTC here before, but it’s something I generally don’t talk about online anymore. I try to have conversations that aren’t rife with hype or speculation, but even with purely fact-based discussions people can become volatile and closed off about it.

I feel this! I just think it’s a shame that mainstream narratives, vulgar hypelords and sheer unwillingness to understand have soured bitcoin’s image and coated it in a thick layer of controversy. It can be difficult to make a reasoned case for its importance and justification of its use when its reputation is based less on its fundamentals and philosophy, and more on the idea that most people are only buying it as a speculative bet and having caused its historic volatility. That alone is enough to turn many people away from it, which is a pity because it does a disservice to the modern problems it solves. As I mentioned above, part of me still has reservations that I think are a symptom of all that, and that’s why I’m keen to keep learning to remove the doubt.

You can put arguments forward as to why bitcoin does not need to be “backed by” anything tangible, how the blockchain and the fundamental properties of it is it’s own backing, how BTC is much greener than the energy requirements upholding the traditional banking system and supply of gold, how networks like Lightning are helping to solve the issue of BTC’s high transaction fees and slow processing times, how it will take years for its price volatility to stabilise through mass adoption, increased understanding and legislation, but if people are unwilling to learn it will make no difference. There’s a natural human resistance to the new and unknown, and unfortunately when there’s controversy and bad actors it makes it even more difficult.

The main thing I struggle with is the feeling of cringe I get when I defend bitcoin. People like this bellend have become the face of cryptocurrency, and this is how I feel like people see those who speak in favour of it:

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But thankfully that seems to be changing lately. All I know is, Christmas dinner conversations are gonna be lively this year!

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Oh gosh, please warn us before posting another jump scare :fearful:

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BTC is cool but not a good time to buy now.

Not much upside left Vs alts (already up since 16k this run). Even if it goes to 150k that’s only a 50% gain which isn’t much in crypto. It’s a lot of risk for not much reward.v

Personally I’m waiting for BTC to drop 70% before buying.

XRP is going to flip BTC

Calling it :upside_down_face:

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Somehow the craziest thing you’ve said all year

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Given the topic we are in, what indications would you say are worth watching to see if bitcoin is going to fall 70%? Or that Xrp is going to rise?

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