Bitcoin 2018

204 comments on “Bitcoin 2018 ”

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1. Nic the NZer 1

   6 January 2018 at 10:14 am

   “That’s particularly important if the state is going to be able to harvest that stuff we need for hospital care and schools: tax.”

   This statement implies a backwards understanding of what is going on here. The state determines which currency unit its economy will primarily denominate in and taxes and spends in this currency unit. The currency unit is not determined externally for the state. If NZ continues to insist taxes are paid in NZ dollars it will not have trouble collecting them in NZ dollars and will also never have trouble spending NZ dollars (via the RBNZ a NZ government institution).

   On the other hand if NZ denominated in bitcoin or some other crypto currency it may have difficulty getting the necessaries to spend at times. This is actually a limitation of crypto currencies which do not have any state enforced demand sitting behind them, though not being used for taxation is commonly raised as a boon.
   • Ad 1.1

     6 January 2018 at 10:46 am

     Bitcoin’s status as legal or illegal tender varies from country to country and is different across global institutions and traders.

     Wikipedia has the full list and seems to keep it up to date.
2. Infused 2

   6 January 2018 at 10:30 am

   The state can’t do shit. That’s the whole point.

   The bullshit about illegal transactions is just that.
   • Ad 2.1

     6 January 2018 at 10:41 am

     As at 1 July this year Australian tax will treat bitcoin etc the same as other currencies for GST purposes. Law changed last year, and more amendments due. Our own government could do well to look to that jurisdiction.
     • infused 2.1.1

       6 January 2018 at 2:41 pm

       That’s fine. As long as it removes the banks.
   • Draco T Bastard 2.2

     6 January 2018 at 11:28 am

     The state can do whatever it likes. And anybody acting against those laws are acting illegally.

     If the state makes BitCoin illegal then anyone using BitCoin is acting illegally and everything they own would become susceptible to the Proceeds of Crime Act.
     • Infused 2.2.1

       6 January 2018 at 2:33 pm

       Good luck proving that
       • Draco T Bastard 2.2.1.1

         6 January 2018 at 10:18 pm

         Proving what?

         That the government can do what it likes? That’s obvious as the last government kept claiming mandate as it worked against what the population wanted.
         • infused 2.2.1.1.1

           7 January 2018 at 1:22 am

           You simply dont understand crypto. Come back when you do.
   • Paul Campbell 2.3

     6 January 2018 at 4:49 pm

     The state can treat bitcoin like other currencies – they can charge GST on bitcoin transactions (and demand payment in NZD), in some cases they can charge CGT on realised gains in increases in value of assets like bitcoin, possibly not in NZ but …

     Where does the block chain live? any of those servers under US law? Chinese Law? Oz law? … ALL those countries might decide you owe them CGT because the transaction occurred, at least in part, in their legal domain

     keep your receipts
     • infused 2.3.1

       6 January 2018 at 5:00 pm

       The blockchain is p2p with most coins, including Bitcoin. There are no central servers.
       • Paul Campbell 2.3.1.1

         6 January 2018 at 5:17 pm

         there’s a single central blockchain, just one, it’s held and reconciled on multiple servers each exists in a physical place, if they don’t exist the currency disappears.

         So where does the transaction occur? you can’t say “on the internet” that’s not a real place. It’s quite valid for nations to ask the same question, especially if those transactions involve something that is taxable and their laws say they deserve a cut (GST, CGT, PAYE etc) … they are not going to take “in no country” as an answer, if the answer is “in lots of countries” then lots of countries laws apply, and they don’t all have tax treaties that allow one to avoid multiple taxation – you might find yourself owing 10% GST in 20 countries

         I expect this will be a legal bonanza over the next few years, tax lawyers will get rich, and tax havens will host the blockchain to tempt those who want to be tax bludgers
         • Infused 2.3.1.1.1

           6 January 2018 at 9:10 pm

           Each wallet can hold the block chain. Everyone can have a copy. There are no servers as such.

           The miners do the transactions which are synced over the blockchain.

           It’s anonymous.
           • Draco T Bastard 2.3.1.1.1.1

             6 January 2018 at 11:10 pm

             What a load of bollocks.

             The amount of power required to maintain the block-chain is far beyond what a cellphone has available to maintain it for even half an hour.

             You’re doing the normal RWNJ thing of assuming something costs nothing.
             • infused …

               7 January 2018 at 1:23 am

               God you’re an idiot. Learn how the block chain works moron.

               miners, who *earn fucking coins mining* do the transactions.
               • Draco T Bastard …

                 7 January 2018 at 2:37 am

                 I know how the block-chain works.

                 I also know how reality works which is something you obviously don’t know.
                 • Infused …

                   7 January 2018 at 11:01 am

                   You don’t know shit
           • Paul Campbell 2.3.1.1.1.2

             7 January 2018 at 3:41 pm

             that’s kind of my point – the blockchain is in everyone’s wallet, or everyone’s server – it doesn’t much matter, the important thing is that it’s in lots of places, and each of those has a government and tax laws, and potentially a claim on taxing of transactions that take place, even partly, within their borders – countries are free to make whatever tax laws they like, and if you do business in their country, even partly, you’re beholding to their laws …. you don’t get to change other country’s laws, even if you think they are unfair.

             I can imagine the US IRS deciding to charge CGT on every bitcoin transaction that ‘occurs in part with the United States’ – next time you fly through the US they lock you up until you pay your tax (25% for long term capital gains, if you remembered to file your forms when you started the investment, otherwise 36% or some such high marginal rate on your profit ….). Maybe the UK decides that part of the transaction occurred there too … and they want another 25%, Germany? 25%, Japan? 30% …. now NZ might have reciprocal tax agreements with these countries, but NZ has no CGT so you still have to pay in full ….

             Get your travelling in while you can
             • infused …

               7 January 2018 at 11:10 pm

               The IRS has already requested US citizens details via the biggest exchanges. Lotta people about to get some epic tax charges.
3. Draco T Bastard 3

   6 January 2018 at 11:25 am

   Are we supposed to be worried about Bitcoin and its comparators?

   Yes.

   When everyone can create their own currency the economy collapses.

   Just as the internet deprives states and the mainstream media of their exclusive control over information, so digital currencies undermine state and financial institution power over means of payment.

   It may undermine state power but the financial institutions will be rapidly trying to corner the market as they have with the present monetary system.

   In early December 2018, Pan Gongsheng, a deputy governor of the People’s Bank of China, warned: “There is only one thing left to do: sit by the riverbank and see bitcoin’s body pass by one day.” Such a lovely dark phrasing for a banker.

   It’s what’s happened every other time that we’ve had private currencies. The only reason why the banks get to create money now is because they get to create the state currency.

   Estonia and Lebanon have already done so, and some of the reasons for Australia (or indeed New Zealand) doing something similar to bitcoin are discussed here.

   Seems that if you can’t beat them, join them.

   Actually, the only way forward is to go full Cashless with state digital currencies while making things like BitCoin illegal.

   That’s particularly important if the state is going to be able to harvest that stuff we need for hospital care and schools: tax.

   This continues the misunderstanding of money. If the government can create money then it doesn’t actually need taxes to pay for anything. That means that taxes are for other purposes such as containing inflation and helping incentivise or disincentivise actions of people.

   In reality the government should be the sole creator of the state currency and then spends it into the economy doing productive and essential stuff. The private sector would then cater to what the people have been paid by the government to provide unessential services paid for by those wages.

   A fundamental solution will require international consensus.

   A complete solution will require that but an individual state would be able to implement a partial solution.

   In New Zealand, Bitcoin should be included under our Proceeds of Crime Act as soon as possible.

   QFT
   • Infused 3.1

     6 January 2018 at 2:34 pm

     You’re a moron
     • Draco T Bastard 3.1.1

       6 January 2018 at 10:15 pm

       have you got anything to back that or are you simply trolling because you have nothing?
       • infused 3.1.1.1

         7 January 2018 at 1:24 am

         You are so fucking stupid on this subject I can’t help myself.
         • Draco T Bastard 3.1.1.1.1

           7 January 2018 at 2:35 am

           So, you’re admitting that you have nothing.

           Cool, you admit that you’re an ignoramus.
           • Infused 3.1.1.1.1.1

             7 January 2018 at 11:02 am

             I’ve explained already how stupid you are.
             • Draco T Bastard …

               7 January 2018 at 1:24 pm

               No, you just threw out abuse with no reasoning.

               In other words, typical RWNJ ad hominem attack.
   • One Two 3.2

     6 January 2018 at 3:13 pm

     Actually the only way forward is to go full cashless with state digital currencies..

     Draco, you’ve stated that position a number of times without any mention of the counter narrative of the downside of ‘cashless’…

     Some of the ‘positives’ you parrot can be interpreted as ‘negatives’…

     Which they are!
     • David Mac 3.2.1

       6 January 2018 at 3:30 pm

       A cashless society would benefit most law abiding members of our society. eg: Marketing dept gold. In real time via barcodes and EFTPOS swipes Tip-Top could see how many Magnum ice-creams sold at the Takapuna Beach dairy this morning, the first weekend after they covered the shop façade in a trial Magnum marketing wrap.
       • David Mac 3.2.1.1

         6 January 2018 at 3:47 pm

         In a cashless society Cashies would morph into trading stuff.

         “Yeah I can run an illegal yet safe cable out to your sleep-out mate, it’ll cost you Led Zepplin 1-4 in mint vinyl and you never met me.”
         • David Mac 3.2.1.1.1

           6 January 2018 at 3:53 pm

           Websites will pop up.

           “West Aucklander wishes to swap the photographed 9 garden gnome collection for a new pump installed by a certified tech in a Fisher and Paykel dish drawer.”
           • Draco T Bastard 3.2.1.1.1.1

             6 January 2018 at 9:48 pm

             Which will result in both going to jail.

             The economy is actually that important.
     • Draco T Bastard 3.2.2

       6 January 2018 at 9:50 pm

       Draco, you’ve stated that position a number of times without any mention of the counter narrative of the downside of ‘cashless’…

       I kinda do expect others to provide the counter narrative. It’s what we call discussion.

       I note that you didn’t.
       • One Two 3.2.2.1

         6 January 2018 at 10:17 pm

         The counter narrative speaks for itself..

         Your financial comments indicate good understanding,so I will assume you are aware of the negatives…

         Start from the status quo with private banks still in control..

         The state won’t be, that’s not going to happen….
         • Draco T Bastard 3.2.2.1.1

           6 January 2018 at 10:19 pm

           The counter narrative speaks for itself..

           No it doesn’t. You have to provide an actual logic and argument for it.

           I’m not the only person here.
   • David Mac 3.3

     6 January 2018 at 3:17 pm

     “Are we supposed to be worried about Bitcoin and its comparators?

     Yes.

     When everyone can create their own currency the economy collapses.”

     I agree with this thought Draco.

     The number of cryptocurrencies available over the internet as of 31 December 2017 is over 1381 and growing. Bitcoin has 1380 competitors. As they proliferate and strive to create points of difference their strength is diluted. The recent pull-back in bitcoin is down to a competitor growing bigger teeth.

     ‘Wanna sell your car? I’ll give 25,000 Macs.’

     I think cryptocurrencies are going to get grubbier, black market, drug purchases, laundering etc before they get cleaner. The cleansing will be on the back of state intervention that will accelerate as they establish ways that they can exploit the technology.

     I also agree that we’re headed towards a cashless society Draco. So simple to monitor, regulate and plan when every transaction creates a binary footprint.
     • infused 3.3.1

       6 January 2018 at 3:38 pm

       Your last statement is incorrect.

       Bitcoin will serv a purpose like gold, with most cryptocurrencies traded/backed by Bitcoin. You can already see this on most exchanges.

       Look at coins like Ripple. This is not anonymous, and currently has partnerships with banks. While I’d like to remove banks from the equation, this coin shows what’s possible.
       • David Mac 3.3.1.1

         6 January 2018 at 6:57 pm

         I don’t understand your comment infused.

         …but I’m intrigued enough to go Google ripple.
         • SPC 3.3.1.1.1

           6 January 2018 at 7:04 pm

           http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11970198
       • Draco T Bastard 3.3.1.2

         6 January 2018 at 9:56 pm

         Gold doesn’t serve a purpose.

         Back in the days so long ago that it was worthless that it worked as a currency then it did. It no longer can because it actually has value now (i.e, actually is useful) and it is also limited. Both of which make it unsuitable as a currency.

         BitCoin, and other crypto-currencies, simply don’t work because to allow them means that you must allow all crypto-currencies. Which means that everyone can have their own currencies and no one needs to accept any of them.

         What makes legal tender is government fiat.
     • greywarshark 3.3.2

       6 January 2018 at 9:12 pm

       What hell a cashless society would be. The government allowing business to drive down wages, its agencies making draconian health and safety laws that bar casual efforts to make food for sale and save up for something or help with bad debts, the worth of home-made undermined by the enormous intake of imported goods, and the relatively high taxes including GST of course, and high cost of basics which surprise overseas visitors; the poor are forced into penury and then blamed for being lazy.

       I just heard that from someone in their 40’s this morning, ‘they’ don’t want to work – I pointed out the psychology of people who have never had regular work, and how unlikely they will believe that they will ever be, or will ever afford to have a decent lifestyle.

       So bugger the idea of a cashless society. The ability of the poor to keep going on not too much should not be on display to the authorities, and having to have some device to record everything is another barrier as having to have cellphones to be contacted on all day, and having to have computers, laptops so you can have a secondary, or primary education. As I said it places barriers between ordinary communication and ‘the man, and increasingly woman’ is always able to watch and catch you out on the latest stricture from above. I’m bloody sick of it already as it is, and you talk about a cashless society. What fools you are.
       • Sam 3.3.2.1

         6 January 2018 at 9:27 pm

         Huh? Computing power is a nations strategic asset. We build up reserves of computing power all the time, just to track payment systems. EDS I believe at one point had the second most powerful super computer in the Southern Hemisphere located in Wellington. Not a lot of people know that. And this computing power has helped close the strength gap between genders in order to make a living.

         For complex civilisation to emerge your u need 3 things. 1) An energy source, 2) a mode of transport, 3) a language.

         For the British empire it was. 1) coal, 2) sail, 3) the printing press

         For America it was. 1) hydro electric, 2) rail, 3) telegraph

         As the post capitalist civilisation emerges it’s. 1) renewables, 2) autonomous vehicle, 3) Internet is the language.

         I mean fighting against this type of progress is like trying to fight an 18th century British colonial force with a 17th century tribal force with lose ties to each other. You can’t fight it. We can slow down progress but we can’t fight it.
         • greywarshark 3.3.2.1.1

           7 January 2018 at 4:26 pm

           The latest I heard was that AI has been built that is 8 times more intelligent than humans. You can look at the past and see what drove them and what the consequences were. You can’t look at our future and just extrapolate from the past; the past that you wish to concentrate on, ignoring all others.

           The killing of the Jews in WW2 was egregious, but particularly so because of the cold inhumane way it was done, the thoroughness, the way that human society and its attempt at nobility and mutual respect through a broad cultural understanding, was disdained, abandoned. And the other thing was the efficient way it was carried out, the industrialised and considered approach.

           Almost as if it was being directed by machines. We can go into machine mode, narrow thinking, silo thinking; we now know that. And once done it can be done again if the right conditions prevail and the propaganda is concerted, and it will alter brain circuits. Those who hold onto an overview, and a set of beliefs of limits on behaviour and a desire for nobility can be dealt with.

           Bright sparks with a facility for abstract thinking, mathematics, calculus etc. can carry on with their cleverness, and make something where nothing was before; a massive achievement. But while there is disdain for ordinary people by a class of movers and shakers with $ for eyeballs, a distance from ordinary lifestylers and their thoughts, dreams and values, if they have any, that equals that of planets, it can be all torn down or require such a massive defence system that only all being chipped or the like so that thoughts could be read would suffice to satisfy the fears of ‘hacker’ danger. Then people are undermined as individuals striving to find their abilities, their cohort and their destinies would be a thing of the past. We have growing fascism, an unholy alliance between business and state, with religion compromised by money and love of power, moral rectitude and control of conduct.

           I think John Wyndham put his mind to quite a lot of the problems looming for humans, and the different ‘recipes’ available to follow in the effort to maintain human society at a level that could support discrete but inter-acting villages that could love and hate without extremes.
           • Sam 3.3.2.1.1.1

             7 January 2018 at 5:26 pm

             Ah yes, nothing like a bit of financial Darwinism. Education is often put forward as a cure for human frailty. And humanity is at a point now where the entire energy sector is going through radical transformation. The energy sector always pools the best and brightest minds and couples them with trade. This story goes right back to Adam and Eve, were cast out of Eden forcing them to learn in double quick time or perish. And this is pretty much the Pandora’s box of misery, once open its almost impossible to close with out learning to inquire and create.

             As way of for instance, if you listen to Indonesian accounts of 18th century Middle East Muslim traders, they traveled to Indoensia with commerce because there homelands were relatively peaceful so there wasn’t this huge western hegemonic push for Middle East oil. If Muslims hadn’t of been accepted by Indonsians then surely Indoneasia wouldn’t have become the largest Muslim country in the world at 90.2% Muslim population.

             That said the Middle East is in a viscous civil war about how to distribute the oil wealth, some believe that the economic benefits should be equitably shared amongst the general population, and a small group believe they are the chosen ones, and this conflict is effecting the world. So now these war refugees are spreading there ideology a cross the world. So much so Indonesia has had a flair up of ISIS militants which is odd because indonesian Muslims have relatively peaceful up until Bush2 invaded Iraq, using the hammer to smash the sickle, so using industrial might to smash poor people for the dumbest of reasons. So now instead of traveling with commerce, Muslim traders now come with the sword.

             And the only way to put this geniue back in the bottle is to transform the oil and energy sector, so that Muslims and rednecks are confronted by renewable energy, commerce and higher education… And maybe, just maybe humanity can close the lid on this saga.
             • greywarshark …

               7 January 2018 at 6:51 pm

               You sound as if you inquire and could know how to create Sam.

               You are strong on history and cause and effect on present day problems in a distant way. But close up how to unravel conflict? Perhaps you could take an active part in trying to smooth the raw edges down. Also that thinking and inquiring needs to be up close and personal to the people already being displaced by technology, and that is continuing. They were born onto this earth and why should it be stuffed up by one lot of people to suit themselves and be denied parity.

               What is going to happen to us when left to people who think in so-called objective terms? Aren’t they borderline madmen, so obsessive that they deny their own humanity, divorce themselves from the masses, and carry dysfunctionality to what would be a ridiculous level if we were watching a
               film. We are left gazing with stupified horror at our present reality. Could you inquire about this Sam, many people want to apply one solution only and are convinced that will carry the day.

               Wordy answers, tossing in parts of the problem, and presenting them as
               a sort of explanation does not answer the question about how humans in general are going to live a full, happy and satisfactory life if bloody technology takes charge of everything, our ability to trade with each other in a reliable currency as a part of our life not under surveillance, and it makes our jobs redundant. It is likely to deny us a traditional place in a community where we now work, and earn, and have other humans and group together in different ways and can develop all sorts of skills and ideas that may be unique to that area, even the world. Or just be ordinary and find pleasure in small things, and in just being alive and following our own small destiny with some choices.
               • Sam …

                 7 January 2018 at 7:53 pm

                 I was just a boy when the 2 millionth kiwi was call out over radio. I’d never thought we’d come so close to 5 million so soon. So we had to import 1 or 2 million extra workers to keep up with employers demands. Now we must live with in those limits.

                 Equally you can not put 10 billion people on this planet with out discomfort. And first world nations have a huge problem with single woman remaining single there entire lives and not having babies. These are real problems that 1st world economies have never faced before. And we are puzzled about what to do.

                 Young people were locked out of higher education until Jacinda inched the door open a bit, same goes for the minimum wage, but they’re still locked out of the property market that’s intertwined with debt so growing inequality. We were supposed to give every one a home so they had chips on the table, but that part of the kiwi dream is gone now and it won’t be coming back for a very long time. Also hospitals running out of medicine and treatment is a huge problem.

                 The social contract that said you can work your way out of poverty is rekted. Every one is looking for away out. Because every one knows that they can’t retire so every one will have to work longer. And Bitcoin is just one way out. What this all means is western economies are going to shrink a bit so third world economies can rise abit. Those that can navigate the changing economic environment will survive.

                 I mean we shouldn’t get overwhelmed with trying to find the golden rule all of the time. All we can really do is acknowledge that human enterprise or endeavours will fail, recognise that they will fail and then fix them as quick as possible. And that means having a system of educational that people can go back to when policy fails in the future.
       • Draco T Bastard 3.3.2.2

         6 January 2018 at 10:02 pm

         What a load of bollocks.

         The government allowing business to drive down wages…

         It’s doing that already and has been for the last thirty years by maintaining high unemployment.

         I just heard that from someone in their 40’s this morning, ‘they’ don’t want to work – I pointed out the psychology of people who have never had regular work, and how unlikely they will believe that they will ever be, or will ever afford to have a decent lifestyle.

         Yes. That has been purposefully done under the present system so as to create poverty. Poverty is needed to produce a few rich people with a high level of ownership.

         So bugger the idea of a cashless society.

         You’re talking out your arse.

         A cashless society doesn’t do what you think it will. It does the exact opposite by ensuring that everyone knows who owns what – and tax them appropriately.

         You get rid of the rich by legislating them out of existence.

         Something that previous revolutions haven’t understood.

         it’s the rich that we need to get rid of.
         • One Two 3.3.2.2.1

           6 January 2018 at 10:30 pm

           A cashless society WILL NOT be how you dream it…

           The rich own the state, and the rich people answer to those who own ‘everything’

           You’re talking out of your arse…
           • Sam 3.3.2.2.1.1

             6 January 2018 at 10:51 pm

             You can’t really bring old world thinking to the new world. At $0.50 a day you live in a square box with no toilet. If your lucky you’ve dug a hole some where.

             At $1 a day you’ve got an enclosed toilet to shit in.

             At $2 a day you’ve got a bathroom with a toilet and no hot water tap, and maybe electricity. But it’s really hard to stop people brining in there wood dust and chips.

             As the minimum wage is progressively raised to $20.20 by 2020 it will be very hard to get normies to quite brining up there old world hang ups.
             • One Two …

               7 January 2018 at 12:05 am

               The New World…

               Same as the old world…

               Except in the minds of those who aren’t being mindful enough of themselves
               • Draco T Bastard …

                 7 January 2018 at 2:43 am

                 Except in those who refuse to except reality.
                 • One Two …

                   7 January 2018 at 11:23 am

                   Correctly understand and explain ledger entries and ‘sovereign money creation’…

                   Then you can attempt to articulate ‘reality’ to me..

                   Reality is in the eye of the beholder, no matter what you think

                   Food
                   Water
                   Clothing
                   Shelter
                   Companionship
                   Et Al

                   Old world = New world…

                   I can’t wait to hear what you believe ‘reality’ is…

                   But not until you comprehend ‘sovereign money creation’ and ledgers….and explain it correctly…
           • Draco T Bastard 3.3.2.2.1.2

             6 January 2018 at 11:05 pm

             Still can’t provide an argument.

             I feel sorry for you. I really do.
             • One Two …

               7 January 2018 at 12:15 am

               That’s not good use of the limited energy stores you have, Draco

               And I don’t need to provide an ‘argument’..there are plenty of them out there already…you just can’t reconcile the negative impacts through your utipian mind trap…

               I’m simply stating that no matter how many times you fantazise about a utopian cashless world where the rich have been legislated out of existence , and repeat it on this site…

               It’s not going to happen that way…

               How it’s not going to match your dreams, isn’t relevant…what is relevant is the current status quo…
               • Draco T Bastard …

                 7 January 2018 at 2:42 am

                 And I don’t need to provide an ‘argument’

                 Yeah, you actually do – else you’re just talking out your arse.

                 I’m simply stating that no matter how many times you fantazise about a utopian cashless world where the rich have been legislated out of existence , and repeat it on this site…

                 You’re talking out your arse.

                 what is relevant is the current status quo…

                 The current status quo is outside of reality.
                 • One Two …

                   7 January 2018 at 11:12 am

                   Draco…

                   You don’t even understand what ledger entries are mate…

                   That you are missing the core fundamental of ‘money creation’ means the one who is talking out of his arse…

                   Is you, Draco…

                   Back to the drawing board on the ‘money stuff’ you go…and take your version of ‘reality with you’…because it’s full of holes…

                   Take cashless off the table, because until you understand ledger entries and the RBNZ, cashless is not the subject for you…
                   • Draco T Bastard …

                     7 January 2018 at 1:16 pm

                     You don’t even understand what ledger entries are mate…

                     Yes I do – I’ve done accounting as well.

                     That you are missing the core fundamental of ‘money creation’ means the one who is talking out of his arse…

                     Money is created in two ways. The government printing cash is one way. The other way is when it’s loaned into existence by the banks as debt. Double entry bookkeeping – one side is the debt the other is the money.

                     Government creating money through printing cash is proof that we don’t need the second way.
                 • Nic the NZer …

                   7 January 2018 at 1:49 pm

                   “Money is created in two ways.”

                   This reminds me of a computer science joke I heard recently,
                   There are two hard problems in computer science,
                   * code structure
                   * naming
                   * and off by one errors.

                   and only yesterday we were discussing money created in NZClear accounts by the RBNZ on this very page.
           • Draco T Bastard 3.3.2.2.1.3

             7 January 2018 at 2:39 am

             So make it so that the rich don’t own the state.

             They really shouldn’t do no matter what they say.
             • One Two …

               7 January 2018 at 11:27 am

               That’s your admission that my statement is true….

               So the rich do ‘own’ the state…

               But we should make it so they don’t ‘own’ the state…

               Draco…if they ‘own’ it…how will it be taken back

               Do tell….
               • Draco T Bastard …

                 7 January 2018 at 1:22 pm

                 That’s your admission that my statement is true….

                 Not really.

                 The rich have undue influence but the state still belongs to the people. We need to remove that undue influence. It’s going to be difficult but not impossible.
   • Nic the NZer 3.4

     6 January 2018 at 3:37 pm

     “In reality the government should be the sole creator of the state currency and then spends it into the economy doing productive and essential stuff.”

     Not sure which planet your inhabiting but in NZ the RBNZ is the sole creator of state currency.

     “The only reason why the banks get to create money now is because they get to create the state currency.”

     This claim is scientifically rejected by the following observation. The money that banks create when lending are bank credit/deposits. While this is denominated in NZ$ as a unit of account, they only exist on the books of the commercial bank. There is no change in high powered money when a commercial bank makes a loan.
     • Sam 3.4.1

       6 January 2018 at 3:58 pm

       Lol. u nub. Normies gana blame
       • Nic the NZer 3.4.1.1

         6 January 2018 at 4:16 pm

         ?
         • Sam 3.4.1.1.1

           6 January 2018 at 4:55 pm

           Finance won’t inform about the entirety of the Bitcoin Story. I don’t think the source code or block chain will ever be complete, as new problems arise so to will the code evolve over time. Bitcoin hitting USD$100,000 is only one major bank failure away, and the chances of a major bank failure is 100%

           I mean Satoshi’s White paper was terrible. We’ve moved way beyond just finance and money.

           Personally I’d prefer a regulator comes in and cleans up the crypto markets, it’s full of ‘painting the tape, insider trading, scames, and people buying in on the hype and losing all of there savings. But that doesn’t mean Bitcoin will go away. The coins causing all the problems are fake bitcoins that spend all there money replicating as much as possible the Bitcoin logo, and replicating Bitcoins reputation with out all the developers and coders making it work.

           It just pisses us old timers off when people talk about Bitcoin with out knowing anything about it.
           • Nic the NZer 3.4.1.1.1.1

             6 January 2018 at 5:05 pm

             Don’t think I mentioned bitcoin even once in my comment at 3.4
             • Sam …

               6 January 2018 at 5:08 pm

               To be clear, you can make your own BCH, BTG, SBTC and BCD transactions this way. Note that there’s a bug with DER encoding that happens once in a while.
           • Paul Campbell 3.4.1.1.1.2

             6 January 2018 at 5:11 pm

             yes I think the scalability issue is the real bugbear – bitcoin is pretty much useless as a general purpose currency if it can’t be used by many millions of people a day doing billions of transactions – I don’t see how that will ever happen if every transaction has to appear on a central blockchain.

             I was thinking the other day about the NZ financial system when I was a kid – we mostly used cache, something that scales because because there are only 2 people involved in every transaction – if I went to my bank (it had to be to my branch) I could deposit or obtain money from my account which was represented by a hand written ledger on a piece of paper kept by the bank …. again it still scaled because there was only one ledger and I went where it was – and to move money between branches we had cheques. NZ banking’s first foray into computers was the creation of Databank who owned the computers and reconciled the cheques (locally, in your home town, or the nearest city) every night. It still all came down to lots of small transactions.

             Trying to put all of the world’s financial transactions into one centralised currency like bitcoin is IMHO crazy …. I’m waiting for the first blockchain DoS attacks
             • Sam …

               6 January 2018 at 5:24 pm

               Linear projections are worse than useless in a non-linear system. They cause people to think they know something when they don’t.

               Lightning network is fairly new but but has the potential to process trillions of transactions. Those developers incorporating LN into there networks should have some success.

               But. During the Dotcom bubble 95% of start ups over leveraged and failed. From that we got Amazon and Google, and apple again. Crypto currencies will be no different, 95% will fail to see out 2018.

               So if your idea of being a genius is to forcast a bear crytpo market then you’ll be 95% correct.

               But being able to pick winners is much harder to do. That why normies tend to blame.
               • Paul Campbell …

                 6 January 2018 at 5:39 pm

                 99% of dotcom companies failed (I worked in Silicon Valley at the time) why would you think that Bitcoin is special in this regard?

                 those companies largely failed because they didn’t really have markets yet – sometimes it takes years for those things to develop (think of tablets and how many companies made those and failed, including Apple, before Apple did make one that stuck).

                 Bitcoin doesn’t bring anything to the party, I can go to my ATM and get the same functionality …. and not have to wait 20 minutes for the transaction to finish.

                 I’m a small manufacturer, I build crypto hardware – I can pay my suppliers in China with SWIFT, my fulfillment people with paypal – my customers pay me using both of those and I write paper cheques to the IRD – what would bitcoin provide me that those don’t, other than maybe a loss of privacy
                 • Sam …

                   6 January 2018 at 5:45 pm

                   It’s typically T+1, try standard remits for example which are T+5++. Understand? Hit me back if I confused you again.
     • Draco T Bastard 3.4.2

       6 January 2018 at 10:06 pm

       Not sure which planet your inhabiting but in NZ the RBNZ is the sole creator of state currency.

       Except that they’re not.

       Private banks create currency all the time. To the tune of billions per year in NZ alone.

       The money that banks create when lending are bank credit/deposits.

       Which is recognised and accepted as state currency.

       if it wasn’t then it wouldn’t be legal tender.
       • Nic the NZer 3.4.2.1

         6 January 2018 at 11:00 pm

         “Which is recognised and accepted as state currency.
         if it wasn’t then it wouldn’t be legal tender.”

         Completely wrong of course.

         “The Bank provides Exchange Settlement Accounts (ES Accounts) for two main reasons: To make available to the private sector “high-powered money” or “outside money” or “Reserve Bank cash” which is of undoubted value, and is particularly suited to achieving certainty and finality in inter-bank settlements.”

         https://www.rbnz.govt.nz/markets-and-payments/nzclear/the-reserve-bank-in-the-payments-system-its-roles-and-responsibilites

         Of course the RBNZ is precisely the only institution which can create “Reserve Bank cash”. Its also the only institution which issues New Zealand “Notes and coins”.

         Your bank will make a payment for you if they owe you the deposit, or if your credit is good with them. They won’t do it in your deposits that would hardly be acceptable to the other party.
         • Sam 3.4.2.1.1

           6 January 2018 at 11:13 pm

           The fine print tells a different story. The RBNZ lists one of its major responsibilities as:

           “The Reserve Bank accepts no responsibility for the affairs or financial condition of any institution, bank or ES Accountholder. These entities are wholly responsible for their own liquidity, solvency and standards of behaviour — and for their own assessments of the creditworthiness of their counterparties.”

           So I don’t think the regulations mean what you think they mean. Lending reserves is a huge problem because banks are not lending. In fact they’re re-hypothecating so using magic numbers to allow mortgage holders to borrow 10-20 times there annual income.
           • Draco T Bastard 3.4.2.1.1.1

             6 January 2018 at 11:16 pm

             +111
           • Nic the NZer 3.4.2.1.1.2

             6 January 2018 at 11:44 pm

             As I understand it Draco is arguing that commercial banks issue NZClear settlement balances when they issue loans. This is untrue.

             As you say banks are not lending bank reserves, they make payments in NZClear in bank reserves and create a multiple of any reserve balances they hold in bank deposits in the process.

             But Draco’s contention was and remains “The only reason why the banks get to create money now is because they get to create the state currency.”

             This clearly implies (again) that commercial banks can create NZClear balances or Notes and Coins which they can’t do.

             Over the course of this discussion I am lead to believe comment 3.1 is both concise and astute.
             • Sam …

               7 January 2018 at 12:34 am

               Usually I just put them on my knee.. give them a good spanking .., make them cry then send them on their way 😅horrible but true. Charlatan
               educators have no morals.

               They know full well that what they say is 100% shit. Personal Wealth from Trading & IQ is massive among the shrewd self educated types. Best Education is an expensive one. Compare my comments with others. You have to be a special type of idiot not to distinguish between us and Charlatans that try to drag us down to a lower lvl.

               It takes a special kind of person not just to talk about professional strategy but also make money from it because humans make terrible traders, because they make irrational decisions. So this kind of stuff isn’t for every one.

               So NZ $72k, U.S about $80k, UK about €40k and the rest of Europe about €38k. These are average salary. All they mean is every one is scrambling to find a way out of the hamster wheel because every knows the pensions system is completely rekted. And Bitcoin is the easiest way out right now. Because the smart money, so all the hedge funds haven’t adopted Bitcoin yet so every one else can front run the hedge funds.
         • Draco T Bastard 3.4.2.1.2

           6 January 2018 at 11:15 pm

           Of course the RBNZ is precisely the only institution which can create “Reserve Bank cash”. Its also the only institution which issues New Zealand “Notes and coins”.

           Which is a lie.

           The private banks create money when they create loans.

           This has been proven.

           This money created by the private banks is accepted as legal tender.

           Thus the private banks create state currency.
           • Nic the NZer 3.4.2.1.2.1

             7 January 2018 at 12:36 am

             Seriously?

             Your raving on like an idiot but have completely failed to grasp the simple point, commercial bank demand deposits are not *state* currency.

             https://en.wikipedia.org/wiki/Demand_deposit

             They literally only exist on the balance sheets of a commercial banks, and not on the balance sheet of state institutions such as the Reserve Bank.
       • Nic the NZer 3.4.2.2

         6 January 2018 at 11:24 pm

         Further,

         https://en.wikipedia.org/wiki/Legal_tender

         “Formally, it is anything which when offered in payment extinguishes the debt. Thus, personal cheques, credit cards, and similar non-cash methods of payment are not usually legal tender.”

         Further the RBNZ concludes that any kind of payments in electronic accounts are not legal tender at all (including “Reserve bank cash”).

         “A contractual provision may specify the form of payment as something other than legal tender. For example, it may specify that payment be made electronically or by cheque”

         https://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Bulletins/2015/2015sep78-6.pdf
         • Draco T Bastard 3.4.2.2.1

           6 January 2018 at 11:36 pm

           Interesting.

           that means that all those cheques that I made several years ago weren’t actually me making payment.

           Think about that for a second.
           • Nic the NZer 3.4.2.2.1.1

             6 January 2018 at 11:50 pm

             “that means that all those cheques that I made several years ago weren’t actually me making payment.”

             Of course they weren’t. You could have bounced them, if you had bounced them you still owed your creditor. Your debts were cleared when the bank actually cleared your cheques.
   • Me 3.5

     7 January 2018 at 10:32 am

     Everyone can have their own currency already and economies have not collapsed. For one Wave coin (around $10.) you can set up your own currency with a couple of clicks and have as many coins as you like. https://waveswallet.io/ The hard part would be finding a sucker to accept them for anything.

     They are not worth anything and from what I can see are mainly used in customer loyalty programs ie buy a coffee, get 10 coffeehere coins and for 100 coins get another coffee.

     NZ will get their own ecurrency. Probably not under this govt as they have not shown themselves to be very forward thinking (trams really?) but the Bank of England and Australia are already looking into it and it makes sense.

     Knowing the future is easy. It’s the present I have difficulties with.
     • infused 3.5.1

       7 January 2018 at 11:08 pm

       My brother works at a bank. They already have a team for blockchain and ripple internally. This is in NZ.
4. eco maori 4

   6 January 2018 at 11:46 am

   I wanted to invest in Bitcoin when they were valued at $10 each .
   But with my muppet sandflys interfering with my employment prospects no spear money to invest Bitcoin are like everything on mother earth what goes up must come down its all about the timing of the sell. But now we know that all OUR computers can be hacked and this fact changes the out come of Cryptocurrency is this the reason that those hacks have been released not sure but It has me asking questions you see there is always a motive for things like that to happen .
   Ka kite ano
   • infused 4.1

     6 January 2018 at 2:45 pm

     The market cap for bitcoin is only 300bn at the moment. It’s not crashing anytime soon. Compared to the rest of the financial world, it is tiny and undervalued.

     People have been saying bitcoin was going to crash since 2011 (when it was $10).
     • eco maori 4.1.1

       6 January 2018 at 6:40 pm

       infused I did not mean that bitcoin would stay down I like the concept one way to cut out the crooked 1% financial men Ka pai
       • Infused 4.1.1.1

         6 January 2018 at 9:11 pm

         Good stuff
         • bwaghorn 4.1.1.1.1

           7 January 2018 at 11:42 am

           can you in very simple terms explain how i would buy some , and other than it raising in value what use it would be to a shepherd from the hills .?
           • infused 4.1.1.1.1.1

             7 January 2018 at 6:57 pm

             Jump on to any exchange, there is one based in NZ I think called Cryptopia. Convert NZD to NZDT. Use NZDT to buy bitcoin. Or use localbitcoins.com. I’ve used both methods.

             From there you can move your bitcoin to bigger exchanges if you want to buy other coins.

             A couple of places in NZ take Bitcoin. Once the lightning network is going, you will find a lot more use for Bitcoin.
             • millsy …

               7 January 2018 at 9:42 pm

               Unfortunately no place where you can simply punch in your credit card number and get bit coin. If you could enlighten me it would be great. I tried cex.io, but there is a 6 week wait and $20 commission if you want to cash it coins up.
               • infused …

                 7 January 2018 at 11:06 pm

                 If you’re keen on using credit card, I’ve used https://www.virwox.com/deposit.php via paypal a number of times. The daily limit increases over time. It’s a bit of a process. Put money on virwox. Buy SIL. Use SIL to buy bitcoin.

                 The reason for this is because Paypal does not allow Bitcoin to be bought through its services. But SIL is an in-game currency.

                 I’d be keen to know if there’s a better method than the above.
5. Daveosaurus 5

   6 January 2018 at 11:54 am

   Obvious Ponzi scheme is obvious.

   When (not ‘if’) Bitcoin crashes and burns, a lot of people are going to lose a lot of shirts.
   • Infused 5.1

     6 January 2018 at 2:35 pm

     Explain how it’s a pond scheme
     • Paul Campbell 5.1.1

       6 January 2018 at 4:43 pm

       (because eventually it will be under water?)

       Unlike say stock in a company there’s no real value backing the bitcoin, the dollar has the full faith and credit of the NZ govt behind it (and a reserve bank that carefully husbands its value), it doesn’t pay dividends, you can’t live in it, if people stop speculating the value of bitcoin will go to 0.
       • Sam 5.1.1.1

         6 January 2018 at 4:49 pm

         You haven’t heard of master nodes…
         • Paul Campbell 5.1.1.1.1

           6 January 2018 at 4:53 pm

           and they provide a real tangible value to bitcoin how?
           • Sam 5.1.1.1.1.1

             6 January 2018 at 5:02 pm

             Crypto currency is an intagable asset under current international accounting regs, so subject to CGT, GST, Counter terror financing, although a coherent regime governing crytpo IMO is 5 years away. Current investors still have to comply with individual tax obligations. And this is generalised across the world.

             So if you’re speculating, so buying and selling crytpo multiple times a year then it’s classed as income and treated as capital gains. But if you just buy and hold one coin for a period great than 1 or 2 years then capital gains won’t apply, typically.

             Disclaimer: I’m not a tax or financial adviser and you’d be good to seek out your own advise.
             • Paul Campbell …

               6 January 2018 at 5:31 pm

               there are no “international accounting regulations”, there are 200 odd country’s laws. Every country has different laws. Some even have different laws in different states within them.

               For example in the US CGT applies to EVERY transaction as if it was income, at your highest marginal rate, unless you declare your ownership to the IRS in which case if you keep the asset for a minimum time a special lower CGT applies. In fact in most western countries (except for NZ) a CGT is a LOWER tax that applies to certain transactions that are deemed to be good for the economy (for example in the US day trading is taxed at 35-45% depending in which state you live, while long term investment in the stock market is typically 10-15% lower).

               NZ is quite unusual in the way it taxes capital gains, IMHO it should be taxed as ordinary income.

               (Note: I file tax returns in the US and NZ every year, I pay CGT on capital gains income in the US, and not it in NZ, due to the tax treaty I pay whoever taxes me at the highest marginal rate the difference between what I paid in the lower country and the higher – NZ income taxes are currently ~10-15% less than those in California)

               This stuff is NOT easy and simple, ‘international regulations’ are a figment of your imagination, there are laws and agreements between countries, which are enshrined into country’s laws
               • Sam …

                 6 January 2018 at 5:38 pm

                 Its assumed that when people comment on things that they’ve done the basic work to educate themselves on the topic.

                 You need to go and read this basic guide about IAS before commenting further: https://www.investopedia.com/terms/i/ias.asp

                 This just goes to show your fundamental lack of knowledge about complex financial situations…

                 Edit: and any one reading this blog and it’s comment should beware of the charlatan educators masquerading as informed opinions… Just be aware, they are really only acting on hype.
                 • Paul Campbell …

                   6 January 2018 at 5:42 pm

                   yes but those are not laws … you still have to obey the laws of the countries you do business in …. sure there may be a standard way to write stuff down, but it doesn’t mean that, say CGT, is handled the same in every country
                   • Sam …

                     6 January 2018 at 5:48 pm

                     I mean yeah. It’s going to be about 5 years before central banks get there act together.
                   • Paul Campbell …

                     6 January 2018 at 5:51 pm

                     It’s not the central bank you have to worry about, it’s the IRD and friends who decide you’ve been avoiding taxes in their countries
                   • Sam …

                     6 January 2018 at 5:56 pm

                     This is part of my reply to basturd in TDB:

                     In 2013, the Financial Year (FY) 2014 ATO Tax Assessment contained a section requiring the declaration of any cryptocurrency Wallet Addresses on your Tax return. This was not repeated in 2015FY, and 2016FY, but I expect that it is likely to appear in the FY 2018 or FY 2019 Tax Assessment which you complete through your myTax portal. It is also of note that tax evasion is a crime and brings with it harsh penalties. So, if you are unsure of the tax implications of your newly acquired and unquantifiable crypto endeavours, ignore the advice in this document, and go see a large entity professional accounting firm if you are so compelled.

                     So as you can see crypto regs are subject to major changes. You literally have to be a rocket scientist in order to navigate the crypto inviroment which is why I typically advise normies to just buy and hold (HODL)
           • infused 5.1.1.1.1.2

             6 January 2018 at 5:02 pm

             It’s purchased with real money. It has a market cap of 300bn right now. It will only crash it people cash out.

             And it’s simply not. There are so many services and products being built on the blockchain, bitcoin and other coins now it’s simply not going to happen.

             The reason for the current value is that there are only 22m coins.

             You need to go do some reading.
             • Sam …

               6 January 2018 at 5:11 pm

               The value is in the people making it work… Normal investors always look at the bottom line. Real investors look at the fundamentals….
               • infused …

                 7 January 2018 at 6:58 pm

                 Go read the whitepapers for each blockchain.
             • One Anonymous Bloke …

               6 January 2018 at 5:13 pm

               The reason for the current value is that there are only 22m coins.

               …so the addition of more blockchain currencies will inevitably lead to a downward trend in value? What about inflation in the value of the goods and services traded?
               • Sam …

                 6 January 2018 at 5:28 pm

                 Founders can take coins out of circulation. Edit: or in bitcoins case, coins can be taken out by consensus.
                 • One Anonymous Bloke …

                   6 January 2018 at 7:13 pm

                   Thanks.
                   • Sam …

                     6 January 2018 at 7:29 pm

                     Don’t mention it.
                 • Paul Campbell …

                   7 January 2018 at 12:47 pm

                   also there’s a steady drain on bitcoin of people losing them, down the back of metaphorical couches by system crashes, forgotten passwords, momentous screwups etc etc while there is a fixed limit on the number of bitcoin ever to be issued the amount actually usable will slowly decrease
                   • Sam …

                     7 January 2018 at 12:58 pm

                     Thats mainly people who don’t know what they’re are doing. Some guy keyed in a 14 Bitcoin reward, so keyed in a million dollar reward as zero. So that’s 14 Bitcoin that got inputting to the network as zero, that we’ll never get back. That’s a really expensive lesson but a valuable one.
                   • infused …

                     7 January 2018 at 7:01 pm

                     Depending on the blockchain, the coins will come back in to the blockchain at some point,
6. mac1 6

   6 January 2018 at 1:02 pm

   Not only is the Chinese banker felicitous with his phrasing, he can speak from the future.
   “In early December 2018, Pan Gongsheng, a deputy governor of the People’s Bank of China, warned: “There is only one thing left to do: sit by the riverbank and see bitcoin’s body pass by one day.” Such a lovely dark phrasing for a banker.”
   • infused 6.1

     6 January 2018 at 2:40 pm

     The reason they banned it was because they the banks were threatened.
     • Paul Campbell 6.1.1

       6 January 2018 at 4:40 pm

       no, it’s banned because the Chinese govt is trying to keep the yuan high – if people can move more money out of the chinese economy the yuan’s value will drop. Muldoon and the Nats did the same thing to us in the early 80s with disasterous results.

       It’s banned because the govt can’t control it.
       • infused 6.1.1.1

         6 January 2018 at 5:06 pm

         No actually, it’s purely because of the banks. And this hasn’t worked. You can’t ban Bitcoin https://bitnodes.earn.com/nodes/?q=China

         They have banned mining, which is something entirely different.
         • Paul Campbell 6.1.1.1.1

           6 January 2018 at 5:19 pm

           actually I had got the impression that they hadn’t banned mining (it brings in money), what they had banned was the conversion of RMB into bitcoin
           • SPC 6.1.1.1.1.1

             6 January 2018 at 6:08 pm

             In September China banned ICO’s initial coin offerings – which was companies raising funds (RMB) by selling bitcoin (probably had been mining them).

             This does not ban mining but stops those doing so raising funds in this way.
             • Paul Campbell …

               7 January 2018 at 12:59 pm

               ICOs are something different – creating new currencies competing with bitcoin (and with the state’s currency) – they certainly are NOT “selling bitcoin”

               Another way of looking at ICOs is that these companies are issuing shares, ones that can be freely traded outside of the normal stock exchanges … and outside of the normal protections required by exchanges (public disclosures, financial reporting, etc etc) – if these companies are doing something real and using the money raised to build wealth in the normal manner (make a product or service, sell it, etc) and are open about how they do business, are audited by independent professionals etc there’s probably no harm in it … on the other hand if they’re just the front for some ponzi scheme I don’t have a problem with the govt stepping in. The problem of course is that without the usual safeguards required by an exchange how can you tell?

               As I see it the banning of ICOs is simply the govt saying: we already have a mechanism for you to raise money that has appropriate safeguards for the public, you should use that – and all these ICO companies are quite free to go and get listed just like anyone else …. assuming they can handle the public scrutiny.
           • SPC 6.1.1.1.1.2

             6 January 2018 at 7:01 pm

             The Chinese governments purpose is to control the outflow of money from China, if people buy bitocin locally off miners, they can use the bitcoin for activity outside China – getting around tightening of rules on taking money out of China, including off their bank cards when travelling.
7. SPC 7

   6 January 2018 at 6:53 pm

   1. We do not apply GST to financial transactions, currency trades and gold bullion trades (but do on coins only 90% gold), so what is bitcoin if GST is applied to the buying and selling of it?

   2. Do we apply a CGT on any profit made holding onto a currency while it appreciates in value, or on gold? So far the IRD says profits in the sale of gold should be seen as income and taxed as such (theoretically) – even without a CGT (but they have no methods for identifying ownership and sale so it is not actually happening).

   3. Sure bitcoin should come under the proceeds of crimes act (identifying this …
   • Sam 7.1

     6 January 2018 at 7:17 pm

     Doesn’t matter if you pay a CGT or income tax, ect, ect. We still pay GST on everything. Understanding and complying with individual Tax obligations and structuring correctly tax obligations can increase profits.

     Courts regularly have made it clear that people who commit tax evasion should not expect lenient penalties. A lot of people happen to be drawn in by the crypto world and trade to the point of making their income and crypto holdings so messy that reporting an accurate number has become impossible… what the future holds in terms of regulatory developments, we do not know. However, every step is being recorded on the blockchain and is time/date stamped… available forever. It is also possible that due to the disruption to the tax, and tax collection of its residents, governments may take a harsh, and less magnanimous approach to the enforcement of laws in the developing crypto world. Taking the time to self-educate on anything applicable to your circumstances is never a bad thing.

     It is hard to estimate where governments will go with trying to tax crypto. Perhaps they will introduce a “Tax-As-You-Go” method, whereby governments apply your tax obligation in real time by matching timestamps and events within the blockchain. Perhaps they will make blockchain mining activities a function of the state infrastructure for National Security reasons – meaning that they essentially make taxes by doing the mining (unlikely). Perhaps taxation on income will be eradicated completely and taxation will be collected based on spending or expenses instead, similar to Value Added Tax (VAT) in other countries. What the future holds we do not yet know… but one thing is for sure – it is going to need to change.
     • Ad 7.1.1

       7 January 2018 at 9:42 am

       Liked your contribution to this debate Sam.

       Taxation based on spending or expenses entirely sounds terribly regressive.

       Once the taxation working group gets cracking later in the year I will generate a couple more posts so you can come in again.
       • Paul Campbell 7.1.1.1

         7 January 2018 at 1:11 pm

         GST only applies to transactions within NZ – nominally at the borders imports are taxed and exports have their tax returned. Again it comes down a bit to the issue of “where is bitcoin”.

         If I buy $1000 worth of something I have to pay them GST on it, if I sell it to someone for $1500 I have to charge them GST on it, and I owe the govt the GST on the difference on the two (the GST on $1500-$1000=$500) that’s the way my bimonthly GST returns work … because there is no GST on exports, and I export more than I spend in NZ or import the IRD sends me a cheque every 2 months (true!)

         GST is taxation based on spending, and yes IMHO it’s way too regressive, I wish it was smaller and income taxes were higher, and more progressive. I made out like a bandit when Key and his mob switched income tax for GST a few years ago, promising us that it would be a wash, of course they lied, the rich did really well while the poor got poorer – I hope that this new govt will undo some of Key’s wealth transfer to the rich, even though personally I’ll end up with less.

         (besides as a computer person I find any form of taxation that requires one to divide money by a largish prime – 23 – just plain weird)
8. repateet 8

   6 January 2018 at 7:09 pm

   Do cryptocurrencies mean casinos won’t need to be used for laundering money? Not to suggest that laundering of money goes on through NZ casinos if course.
   • One Anonymous Bloke 8.1

     6 January 2018 at 7:12 pm

     Don’t worry, it’s safe to suggest it.
     • Sam 8.1.1

       6 January 2018 at 7:26 pm

       Julian Assange, Bradly Manning, and Snowden prove that information can not be private always. Although there are services out there that provide anonymity based on difficulty or length of time taken to brake a password vs a pass-phrase made up of 20-1mln characters. It’s difficult to see how information can remain private, as in if you’ve got permission and know how to access the information then you have access.

       I mean just as way of for instance let’s say you wanted to buy a car, if that car was on a Bloch chain then every service, every part, every mile would be time stamped and you can check to see if everything adds up and give a fairly accurate estimate of how much you’d pay.

       But if you’re like a spy or dodgy person then you’d probably need a bitching AI to be able to help you navigate all the noise from actionable info.
9. David Mac 9

   6 January 2018 at 7:31 pm

   Bitcoin is being pitched at those that haven’t bought a bottle of snake oil before. It’s a bit different this time round, it always is. The purveyors are quick to point out ‘This is high risk’. They don’t deceive but go on to point out that in real terms the Lamborghini cost them $115. Years ago I was induced into attending some crappy pyramid marketing seminars, these days the Dr Hook Medicine Shows are singing the same song but on utube.
   • Sam 9.1

     6 January 2018 at 7:46 pm

     Bitcoin has created 33 million millionaires and the richest person in the world has a 33% stake in Ripple. We did this purely off the back of our own research.

     In the 30’s before the great sharmarket crash that precipitated the Great Depression Wall Street was unregulated. This is the point were crypto markets are… Unregulated… The more money lost, the more tears shed, the more regulation and protocols will built into the Blockchain.

     The moment for central banks to intervene was probably 2010 when governments had the computing power to unwind everything and destroy all the computers and devices, and a large chunk of those people are millionaires so it’s like trying to disappear a 33 million Kim Dotcoms.

     Software is eating the world. So if you don’t know how to code you’ll get eaten as well.
     • David Mac 9.1.1

       6 January 2018 at 7:53 pm

       Can I choose the sauce?
       • Sam 9.1.1.1

         6 January 2018 at 8:09 pm

         Just as a quick outside the box approach to future crypto use cases.

         You could receive micro payments for all those ads you watch via your device, so watch ad and receive payment on your device. And payment for all your data bought and sold to advertises who then track your movements, coupled with RFI either implanted or not and your u can quickly see how the whole religious mark of the beast emerge. So Bitcoin can be used for good or bad and this is no joke. And I hope you understand the implications. If a centrally controlled government structure was ever to wrestle control of Bitcoin then that structure would be as close to God like as it’s possible to, so knowing all and seeing all, and that’s really dangerous to have that kind of power in the hands of undesirables.

         That’s why consensus is a big thing in Bitcoin so no one has total control to say what sauce you’ll have.
       • David Mac 9.1.1.2

         6 January 2018 at 8:15 pm

         I’d like to be served under a medium Hollandaise with a South Pacific twist. Heston’s Hollandaise recipe with 4 drops of lime juice, quarter can of quality coconut milk and a half Papaya blended in. Risky, can I taste it before we begin? I’d like to be remembered favorably.
         • Sam 9.1.1.2.1

           6 January 2018 at 8:20 pm

           We rise by lifting others.
           • David Mac 9.1.1.2.1.1

             6 January 2018 at 8:37 pm

             You code, I’ll sell it, ok? Nobody needs to get eaten.
             • Sam …

               6 January 2018 at 8:55 pm

               I’m saying wages are about 30%-40% below were they should be and the retirement question hasn’t been answered. Sure Labour has recommitted to contributing to Kiwi saver but we’re talking about a retirement system designed to maintain a workers wage for 5 years into retirement. And then absolutely fall of a cliff. And if you don’t know how to code you to will find your self being eaten alive.

               These are huge questions the kiwi culture is way too immature to answer. These cracks in the financial sector are so obvious.

               Bitcoin hitting new highs is only one major bank failure away and the chances are 100%
               • David Mac …

                 6 January 2018 at 9:10 pm

                 I don’t want a coder installing my new hip, changing the steering rack in my car or arresting the president of the Mongrel Mob.

                 We stand to gain much from coding and it is an area with potential beyond imagination.

                 But at the end of the day we’re human, coder guy, can I please have a hug?
               • One Two …

                 6 January 2018 at 11:50 pm

                 and if you don’t know how to code you will find yourself being eaten alive

                 If you believe that, I would suggest try chewing on your keyboard…because the ‘non coders’ will have the edibles..
               • Sam …

                 7 January 2018 at 12:08 am

                 If you’ve got a below 95 IQ then I don’t want to know you.
   • infused 9.2

     7 January 2018 at 1:29 am

     You do know lambo is a meme of Bitcoin right?
10. David Mac 10

    6 January 2018 at 7:50 pm

    The subject in that video portrays he is hyper connected to all that is life.

    My search has taught me that the things he feels are intrinsic don’t count for squat.

    It ain’t the size of your Lamborghini that counts, it’s the width of your grin.
11. McFlock 11

    6 January 2018 at 8:06 pm

    Cryptocurrencies are just a bartering arrangement, like any other speculative market. Even like instant noodles in US prisons. The speculative value, however, means they can barter larger value items. But then the problem isn’t bartering large value items, it’s that anyone who wants to do it in scale in a civilised society needs to launder it and declare it. Just like the Miami coke traffickers in the 1980s.

    ISTR reading somewhere that the more concerning future impact of cryptocurrencies is the energy demand of processing billions of highly complex transactions multiple times.
    • Sam 11.1

      6 January 2018 at 8:16 pm

      Ideally you’d harvest energy from the sun via solar and feed it into micro transaction mining via devices, and you could receive a UBI in the same way.

      Also the finance sector was invented to fund the energy sector particularly oil and Bitcoin was sent here to take them on and take them out.
      • McFlock 11.1.1

        6 January 2018 at 9:31 pm

        Solar energy to process bitcoins is just global warming and taking out the middleman. Altering the albedo of the earth to convert to electricity which eventually gets converted to surface-level heat.

        Didn’t the modern financial sector start with tulips and colonisation/conquest?
        • Sam 11.1.1.1

          6 January 2018 at 9:52 pm

          It did. But a lot of people don’t understand that 90% of all retail traders lose 90% of their portfolio with in 90 days. Every millionaire knows the 90/90/90 rule. And that’s a conflict of interest that spans all industries and sectors. So I know 90% of coins won’t make it, 90% of investors won’t make it. But I’ll keep a cool head and maintain my financial freedom even though I know 90% won’t make.

          I mean people say stuff all the time and I’m like… But wait… That’s not exactly how it works… You’ll be better off doing X, Y, and Z first before you develop your own style… Almost always, all lefties come back at me with a… But it’s about human RIGHTS!!! And feelings…

          Its like the old saying. You can lead a horse to water but you can’t make em drink.
          • McFlock 11.1.1.1.1

            7 January 2018 at 2:45 am

            But that’s the traders wanting to sell their goods for legal tender, rather than barter for something else.

            In the crypto/barter economy, a bitcoin might buy drugs of a certain value, or assault rifles of a different value. Is that an exchange rate fluctuation, or is it a reflection that the relative valuations in that specialised market are different to more conventional transactions?

            I recall reading an article about the economic management of (I think) the Everquest MMO. You have players doing trades of virtual items and virtual coins for real money, At least bitcoins usually involve the purchase of something real.
            • Sam 11.1.1.1.1.1

              7 January 2018 at 12:49 pm

              Bitcoin can not be fully decentralised, there’s consensus amongst the Bitcoin community that rejects con artists, scames, fraud, corruption. Basically the people behind Bitcoin who are making it work reject fiat currency. So there does have to be rulz, if there was know rulz and every one started scamming people, some smart guy would come along and say we need some rulz that say no more scams and con artists.

              A lot of the transactions are people with zero trading and investing skills making these really tinny transactions so fractions of 1 cent. And all the miners are verifying fairly useless economic activity. A year ago the forecast was Bitcoin hitting USD$10,000 in 2018. No one would have ever thought it would hit $20k pushing the target out to USD$100,000 in 2018. These things are what’s clogging up the network.

              Before the herds rushed into Bitcoin in 2017 you could transfer from wallet to wallet pretty easy, typically with in 10 minutes. So the network wasn’t designed for this mad rush. And when transaction times blow out to T+1, so transaction plus one day to execute. That causes the volatility you’re talking about. What’s going on is all the exchanges are having a melt down because of the 10x increase in traffic.

              So people buy coins, then it doesn’t work as advertised because of the delay between sending coins, then there’s a dump when people get there hands on the coins a day later. And that’s reflected in the crypto markets price action, especially in Q4, so the Christmas noobs get gifted some money or coins and just don’t have the education to know what to do with them and pretty much jam it all on red and get screwed as the price action ranges violently from pump to dump. And don’t really have the skills or the balls to time the markets properly. When things get tight it really can feel like you’re busting to go for a piss. You just have to be aware of it so you can remain level headed, able to make decisions in double quick time consistently.

              Ok, now, so payment channels can be done on the Bitcoin network already but it isn’t utilised that much, and this is were lightning network comes in and clean up a lot of transactions. Bitcoin has a wiki page that you can look up about payment channels, this is really important to know for any one wanting to get into crypto.

              But basically LN works by paying (A) to (B) with out going through (C)…

              So first off computer modelling has taken over the world. Before any one creates anything with substantial investment it has to go through computer modelling first. So we need networks like lightning network to process all these different transactions. So we know there will always be more than one coin. Currently I receive coins simply by owning Bitcoin through forks or airdrops so people trying to replicate Bitcoin have to give Bitcoin owners a piece of the action, a lot of noobs/nubs just don’t know this stuff. But let’s say I had 16 different coins which amounts to enough to buy a bigmac, received from my part time job, a UBI, advertisers paying me to watch there content that they trade then use that info to sell me stuff so all these different coins with different use cases. But I know I’v got enough for a Big Mac. Networks like lightning would allow me to trade all 16 coins for 1 big mac as one transaction instead of having to open up 16 different wallets I could just use one. instead of all these really tiny transactions clogging up miners time spent verifying each transaction, and probably use 30%-60% more energy verifying all these useless transactions.

              This capability has always been possible on the Bitcoin network it’s just no one created the app for people who don’t code, in the early days of Bitcoin you almost had to be a rocket scientist to figure all this out. because we totally underestimated the rush. But the idea that Bitcoin is going to die for X, y or Z reason really won’t stop developers who have made millions doing what they love, continuing to do what they love and make money from it.

              Normies just can’t convince early adopters of Bitcoin to come back to fiat currency. And that’s what normies are really bumping up against.
              • McFlock …

                7 January 2018 at 5:54 pm

                30-60%?

                The problem needs to be addressed more than that for cryptocurrency to reach CC/EFTPOS use levels.

                Normies don’t give a shit what early adopters come up with – after a while most of these things will be kept alive by hobbyists at best. It’ll be a while before anything like bitcoins are routinely used to buy a big mac, and will probably still involve carrying around some sort of token like a credit card anyway. The credit tokens in the old Max Headroom series come to mind.

                Either way, no improvement for the end user in payment method means no reason to change. That’s what the preachers are up against. Abstract concepts like “fiat currency” won’t cut it for someone who just wants a happy meal.
                • Sam …

                  7 January 2018 at 6:05 pm

                  You know. I really think you should take a good look at what apps young people use. It’s a great way to weed out the white noise.
                  • McFlock …

                    7 January 2018 at 6:24 pm

                    Why? They’ll be using something else in a year. They still playing angry birds? Is tinder still the dominant dating app, or are they on something else?

                    And we’re not talking about young people, we’re talking general use. When they have kids and maybe a mortgage, most people sit down and use what works best and easiest. Bitcoin is competing against a credit card or eftpos. No contest for most people.
                    • Sam …

                      7 January 2018 at 6:33 pm

                      Steemit, patreon. Pretty much any social media platforms there parents aren’t annoying them on.
                    • McFlock …

                      7 January 2018 at 6:39 pm

                      If their wikipedia pages are anything to go by, their usage levels… aren’t world-altering.
        • Paul Campbell 11.1.1.2

          7 January 2018 at 1:16 pm

          unlike coal using solar energy to harvest bitcoins is mostly a wash in so far as global warming is concerned, if there wasn’t a solar panel there converting the solar infall into electricity the light would fall on a rock and make it warm (there’s a slight decrease in earth’s albedo because of solar panels which is why I said ‘mostly’)

          In other words worrying about coal being used for mining (or mining using renewables that would otherwise displace coal) is the problem
    • joe90 11.2

      6 January 2018 at 8:30 pm

      https://www.wired.com/story/bitcoin-global-warming/
    • David Mac 11.3

      6 January 2018 at 8:31 pm

      Noodles in prisons, Tulip bulbs in Amsterdam, these speculative markets you speak of are usually based on something but this is based on buying a nothing. The for argument gains momentum when the nothing is worth 10% more tomorrow.

      It’s an alluring mirage.
      • McFlock 11.3.1

        6 January 2018 at 9:34 pm

        They were all based on what speculators thought other speculators would pay for them tomorrow. Just like shares and bitcoin.
        • Paul Campbell 11.3.1.1

          7 January 2018 at 3:00 pm

          yes but shares and even tulips are backed by a real thing with a real use – those shares are still backed by a company doing business, with actual assets, tulips, are actual tulips that you can grow – their value in the market may be inflated, but there’s a minimum value – bitcoin and friends are just numbers on a ledger with no underlying intrinsic worth, even pokemon cards have a value as recycling scrap
          • McFlock 11.3.1.1.1

            7 January 2018 at 5:28 pm

            Really? WTF are tulips good for? Food, warmth or shelter?
            • Andre 11.3.1.1.1.1

              7 January 2018 at 6:29 pm

              Helping you get laid?
              • McFlock …

                7 January 2018 at 6:44 pm

                lol true… but unless I’ve missed something fundamental, that’s not intrinsic to the nature of the tulip. 🙂
            • greywarshark 11.3.1.1.1.2

              7 January 2018 at 8:57 pm

              McFlock
              Don’t deny us beauty even as we concentrate on the necessities.
              Tulips could be replacements for roses, as in Bread and Roses. And for getting laid, just thing of two-lips! There is a vague connection there.

              As we go marching, marching, we’re standing proud and tall.
              The rising of the women means the rising of us all.
              No more the drudge and idler, ten that toil where one reposes,
              But a sharing of life’s glories, bread and roses, bread and roses.
              http://unionsong.com/u159.html

              This is applicable when thinking about idlers earning money by creating
              ghost money and playing it like a speculative side of the financial markets.
              Those derivatives probably don’t have much behind many of them. People who would be doing real things are out of work because of the workings of the market.
              • McFlock …

                7 January 2018 at 9:29 pm

                But that’s not an objection to cryptocurrency.

                There are practical issues with it, but even solid gold is subject to speculative booms and busts.
                • greywarshark …

                  8 January 2018 at 9:08 am

                  This is a different sort of speculation. An attempt to derail the financial system we have that involves physical money as well as betting on real physical things and on punts on probabilities, just like horse racing. It has expanded in its use to precarious levels. Bitcoin is trying to break into the precarious side of the financial system and is trying to entwine itself with it.

                  The financial system that we have breaks out into total irrationality at times when the use of computerisation and technology allows dealers to make horrific accidental bids through a slip of the fingers, but they are reasonably rare and there is some control on these through employers having to consider the implications.

                  I don’t think there is any thought, taking care or responsibility with bitcoin. If there is an attempt to introduce controls, the mindset of the people brought up in a freewheeling capitalist system as we have now will encourage subverting them. The current belief is – winner take all, if there is profit then it is a good deal, it’s having money and things that counts and those that fail to achieve such are losers and lack the spark that winners have and the determination to win. It’s raw greed out there for the people at the top of the money tree. Bitcoin will be a plaything for them, like Monopoly.

                  That’s my opinion anyway, and from what we have all observed of the financial system and how technology uses and is used by it I think I am generally right. Someone will find a mistake and pick apart my opinion because of that though.

                  And for those interested in the warping power of having too much money, and Affluenza, there is the film on at present ‘All the Money in the World’.
                  Blurb –
                  ALL THE MONEY IN THE WORLD follows the kidnapping of 16-year-old John Paul Getty III (Charlie Plummer) and the desperate attempt by his devoted mother Gail (Michelle Williams) to convince his billionaire grandfather (Christopher Plummer) to pay the ransom. When Getty Sr. refuses, Gail attempts to sway him as her son’s captors become increasingly volatile and brutal. With her son’s life in the balance, Gail and Getty’s advisor (Mark Wahlberg) become unlikely allies in the race against time that ultimately reveals the true and lasting value of love over money.

                  One thing I remember, as the kidnappers grew more impatient, pressing and desperate they sent old man Getty a piece of, or all of one of his grandson’s ears but that failed to move him to do something quickly.
                  • Sam …

                    8 January 2018 at 9:46 am

                    What non-coiners see in Bitcoin is they don’t see how it’s possible.

                    With the New York Stock exchange filing an application with SEC, creating an exchange traded fund to track bitcoins price. No one can complain about lack of a regulated mechanism for price discovery. So all those who paint the tape by setting a price then filling demand with hype based on press releases. Or all those miners who front run other miners leaving behind empty blocks. Could be subject to arrest.

                    The goal on the other hand isnt to maximize the ROI of investors. Most of us just want to increase the usability of the system without compromising its strengths. I believe that taking a long-term view will lead to the highest quality engineering decisions.

                    If you’re just grabbing data from nodes, that’ subject to Sybil attacks. You’d want the data embedded in the chain by miners, though even if you’d switch to something else it will be a weaker security model if you aren’t validating the whole history. It’s pretty important if it hits infinity. This is the case for Ethereum nodes running on spinning disks, for example…
                    • greywarshark …

                      8 January 2018 at 10:16 am

                      I see that you are excited by the concept Sam and are deep into the modern technology world. I am surrounded by the human world which I try to understand more clearly as I get older and look at all the implications of recent and past developments.

                      So we never can meet in thought, as the paths are diverging. Thanks for replying to me and explaining what is going on down as they used to say. Cheers.
            • Paul Campbell 11.3.1.1.1.3

              7 January 2018 at 10:46 pm

              people buy them to grow in the garden because they look pretty – Mitre10 will sell them to you, for real money
              • McFlock …

                7 January 2018 at 11:27 pm

                Most of the people who “bought” tulip bulbs in the bubble weren’t interested in looking at them. The only thing they were interested in was how much they thought someone else would buy them for the next day.

                And if we’re talking that momentary pleasure is “intrinsic value”, then internet content has “intrinsic value”. Including the joy when your bitcoin balance goes up.
          • Sam 11.3.1.1.2

            7 January 2018 at 5:35 pm

            A major issue is these hard fork (BitcoinUnitBias) moving the decimal point 6 places to the right. Then people buy BUB because it will be like $0.0001 and bid it up to like $0.05. It will then have a larger market cap than BTC. So generating millions maybe billions in economic activity with about half a calorie worth of effort.
            • McFlock 11.3.1.1.2.1

              7 January 2018 at 6:46 pm

              purely speculative economic activity is an inflationary cancer on the economy.
            • greywarshark 11.3.1.1.2.2

              7 January 2018 at 6:56 pm

              Energy is measured in calories as in heating etc. also calories in food for our energy. What sort of calories are you thinking of at 5.35pm Sam.
              • Sam …

                7 January 2018 at 7:10 pm

                Just human biological activity. Probably fluid dynamics. So not a lot of activity can create huge profits. Even if you want to specialise in just Bitcoin, so buy and hold. We still get free coins, so it’s like easy money for exchanges. More coins, more fees. I mean they’re the ones pushing all this.

                A friend of mine was saying he payed $100k to have his token listed on an exchange and some say places can be bought for over a million. So when your u hear some one say scam coin, usually it’s because it’s not listed on an exchange. Never mind about the underlying tech backing it. It’s a huge conflict of interest people just have to be aware of and deal with it.
                • greywarshark …

                  7 January 2018 at 8:46 pm

                  It sounds like rich kids who are looking for a new exciting game that can turn into real money or as good as. In the background there is a blast from the past –
                  Mark Knoppfler ‘Money for Nothing, chicks for free…Maybe get a blister on your finger, maybe get a blister on your [bum].’
    • Andre 11.4

      6 January 2018 at 9:12 pm

      The most plausible estimate I saw with actual working suggested that worldwide, Bitcoin annual electricity use is about 3/4 of New Zealand’s annual electricity use. That estimate was before the recent bitcoin price spike, so it is probably getting an extra boost upwards right now.

      That 234 kWhr per transaction cited in joe90’s Wired link is in line with the estimates I saw. That’s more electricity than I use in a month. For ONE transaction!
      • McFlock 11.4.1

        6 January 2018 at 9:44 pm

        and any star trek magic-words that come along in future to bring that down significantly would also threaten the anonymity or even integrity of the system.
        • Andre 11.4.1.1

          7 January 2018 at 6:15 am

          Yeah, that massive energy expenditure is kind of inherent to large distributed ledger systems. If you have to ensure consensus and replication across a massive number of nodes for every transaction, then obviously it’s going to be energy wasteful. Particularly if there’s a lot of processing overhead going into security features.

          All that just to avoid having a centralised data storage and processing system, where a transaction only requires the two parties involved in the transaction to communicate with the central system.
    • infused 11.5

      7 January 2018 at 1:31 am

      The protocol to these blockchains can be changed at any time. I suspect this is what will happen to a lower difficulty. In any case, Bitcoin changes the difficulty on its own depending on mining activity. So if it gets too expensive and people pull out, the difficulty goes down.
      • McFlock 11.5.1

        7 January 2018 at 2:30 am

        It wasn’t the expense that’s the issue, but the energy expenditure.

        Basically, the laws of physics impact bitcoin-style scalability, especially compared to other online transactions. It ain’t as efficient as any other form of online transaction (including EFTPOS).

        Even if it were 2kWH not 200, if it ended up as popular as EFTPOS peaking at half a million prer-xmas transactions an hour that would be 10%ish of our present generating capacity. Which might be worthwhile for transitioning off fossil-fuel transport, but just to buy something?
        • Infused 11.5.1.1

          7 January 2018 at 11:04 am

          Look at the lighten protocol for bitcoin. It solves the issue you speak of among others.
          • McFlock 11.5.1.1.1

            7 January 2018 at 5:54 pm

            Mitigates. To what extent?
            • infused 11.5.1.1.1.1

              7 January 2018 at 7:03 pm

              Too much to explain, you’re better off watching a video. We don’t know entirely yet as it’s in alpha/beta and only been tested on testnet (bitcoin test network).

              Basically, they will be off-chain transaction with little/no fees and be instant.
              • McFlock …

                7 January 2018 at 7:38 pm

                And still end up being put back on the chain with corresponding energy use.
                • infused …

                  7 January 2018 at 8:30 pm

                  Ah well, I was responding to the scalability issue, not really the energy use issue. I do agree that the current mining methods are a waste of energy.
                  • McFlock …

                    7 January 2018 at 8:56 pm

                    Even on scalability, how would it work at checkout volumes? What are the vendor overheads for half a million transactions an hour, vs a central finance agent like a bank or paypal?
                    • infused …

                      7 January 2018 at 11:14 pm

                      I can’t answer that.

                      My interpretation, of what I see coming is this: Bitcoin will be used to transact large transactions, between ‘banks’ if you will. There will be modifications to the protocol which will allow something similar to paywave for the consumer, an $80 limit which is off-chain and can be used like a credit card.

                      Beyond this, I’m not sure. It’s a work in progress.

                      This is where other coins like Litecoin have popped up because they solve this problem. They’re just a shit coin with shit developers.

                      IMO, Bitcoin needs to be the gold that backs some other coin(s) which do the dirty work.

                      I’m invested in where this is going. I can’t quite see the end game here, but if it works out, it would be great for everybody.

                      Banks are the scum of the earth.
                    • McFlock …

                      7 January 2018 at 11:40 pm

                      Banks are okayish if they’re forced to stick to the basics. But the centralised infrastructure adds convenience to the users.

                      What it comes down to for most users is: does it do what I need, and is the effort of changing more than the benefits it gives me.

                      I suspect that regardless of framework, cryptocurrency be implemented on a large scale by a major corporate body with some token that will be highly convenient and also negate the anonymity of it. Then governments will regulate that corporate which will make competitor entry into the regulated market prohibitive.
12. joe90 12

    6 January 2018 at 8:59 pm

    A local snake oil salesman sings the song.

    https://t.co/KSSAAqXMLu $ICX will have a huge year in 2018.$btc $eth pic.twitter.com/5Rj1GBl8RG— TheCryptocurrency (@TCryptoCurrency) December 26, 2017

    https://twitter.com/TCryptoCurrency/status/945771807159631872
    • Sam 12.1

      6 January 2018 at 9:12 pm

      That’s what I’m talking about. Every one looks like a fucking genius when there’s a bull market so every one is pilling in. But when all that volume drys up the question is… How many aviation glasses does it take before you make any money in a bear market? The answer is selfie sticks are for those who can’t afford camera operators.
    • infused 12.2

      7 January 2018 at 1:33 am

      With the altcoins, aka shitcoins, most of these are scams and ponzis. This is one of them.

      The only true ones I really know about are bitcoin, ripple, monero, eth (its a bit fucked atm) and maybe ven. These are ones ive read the white papers on, and/or actually have agreements with banks or other institutions.

      There’s 1100-1200 others. Fuck them.
13. greywarshark 13

    6 January 2018 at 9:27 pm

    People’s currency called LETS, Green $ to encourage people to get things done by local trading so strengthening community. It was a theory that had to be operated with a firm set of guidelines and the one I was in broke down as the economy tightened and it was important to get real $. We used the NZ$ as the standard to measure value against, and paid some in real $ to cover materials and costs and some in Green $.

    Bitcoin seems of real interest to people who like risk or who have so much money that they have to do anything speculative with it rather than apply it to some business that would increase money flow in a given area through the multiplier effect.
    • infused 13.1

      7 January 2018 at 1:36 am

      Bitcoins main goal is to remove the middleman, aka banks. Go read about how it and other coins have taken off in Venezuela.

      Crypto is one thing that *really* can change the world for better. If the teams involved get it right.
      • greywarshark 13.1.1

        7 January 2018 at 11:19 am

        Bitcoin termed Crypto – Other crypto? Well likely to have the same effect in the end:
        Cryptosporidiosis is a diarrheal disease caused by microscopic parasites, Cryptosporidium, that can live in the intestine of humans and animals and is passed in the stool of an infected person or animal.
        Both the disease and the parasite are commonly known as “Crypto.”Nov 2, 2010 CDC
        • Paul Campbell 13.1.1.1

          7 January 2018 at 2:27 pm

          yeah – I build crypto hardware (hardware used for cryptography) – the quite recent use of the term to just mean bitcoin and its ilk is annoying – a bit like the way the term “hacker” was taken away from us to mean something bad
14. James 14

    7 January 2018 at 8:09 am

    Kim Dotcom pimps bitcoin – if you can’t trust him – who can you trust.
    • dv 14.1

      7 January 2018 at 8:32 am

      I saw John Key pushing Bitcoin on face book too.
15. Pat 15

    7 January 2018 at 12:51 pm

    Commodity or currency?……my pick is the former.

    https://www.marketwatch.com/story/why-it-matters-if-bitcoin-is-a-currency-or-a-commodity-2017-12-13
16. NZJester 16

    8 January 2018 at 5:50 am

    The disturbing thing about cryptocurrencies is the fact that a large part of their value comes from the demand for the currency and the problem is that because it can easily be transmitted over the internet from country to country a large part of the demand has come from criminal elements wishing to avoid state controls over large transfers of cash. It has become the go-to currency for those dealing in illicit items such as drugs, modern slavery, and illegal weapons sales.
    There is talk that North Korea’s weapons programs and the ability of their state to still function now rely heavily on cryptocurrencies to bypass UN sanctions. Some have pointed to North Korea as a sponsor and possible source of a lot of ransomware trojan software that demands payment in cryptocurrency.
    Why not just start investing your money directly in companies that poison the environment and manufacture weapons, as that would actually be better than investing in cryptocurrencies.
    • infused 16.1

      8 January 2018 at 1:00 pm

      It’s like normal fiat doesn’t get used in this way at all.
17. corodale 17

    8 January 2018 at 10:06 pm

    Classic fear porn from the free market Bolscheviks. USD or P2P? Well, if one is stablised by nuclear submarines. Seems the biggest danger of bitcoin is pissing off the puppet masters with codes for the red buttons…

    But on the peaceful side of reality. The Russians haved developed crypto tokens for buying organic food. Malaysians are using tokens to trade carbon emissions and Australians are cutting out middlemen with p2p electricity, which will hopefully be coming soon to NZ.
18. Ad 18

    10 January 2018 at 7:18 am

    Just a slight chance that the lustre has come off these kinds of currencies.
    • corodale 18.1

      10 January 2018 at 9:07 pm

      Why would the lustre come off a currency that grants p2p electicity trading? Why not be positive about a turning tide, away from violent repression? The capital drift to the oligarchy was a passing phase. Alternative currencies are a logical and peaceful mechanism to rebalance.
      • Sam 18.1.1

        10 January 2018 at 9:27 pm

        Bitcoins first correction was -90% then a couple 70% corrections after that. A 30% correction is a whole lot of meh to us old timers.

        And I keep saying. It’s not a currency. It’s barley an asset. It’s a messaging app first.
        • Ad 18.1.1.1

          11 January 2018 at 8:33 am

          Warren Buffet is pretty dark on crytocurrencies yesterday:

          “In terms of cryptocurrencies, generally, I can say almost with certainty that they will come to a bad ending. Now when it happens, or how or anything else, I don’t know. But I know this: If I could buy a five year put on every one of the cryptocurrencies, I’d be glad to do it but I would never short a dime’s worth.”

          https://www.bloomberg.com/news/articles/2018-01-10/buffett-says-cryptocurrencies-are-certain-to-come-to-bad-ending
          • Sam 18.1.1.1.1

            11 January 2018 at 10:04 am

            Bitcoin’s apparent resiliency and price has nothing to do with its adoption (or lack thereof). The primary participants in the Bitcoin exchange marketplace who aren’t day trading or laundering money are the miners. That’s become a heavily centralized enterprise with a handful of actors controlling most of the mining. These folks have huge real currency bills and huge capital investment in hardware that can’t do anything besides mine Bitcoin so it’s very much in their interest to have it trade at high prices. Ironically this is equivalent to a bastardized Fed, whom Bitcoiner libertarians profess to hate. It’s also the polar opposite of what was supposed to be a main selling point of Bitcoin.

            Bitcoin is so illiquid with how much of a pain in the ass it is to trade and how little of the nominal “market cap” is available that market figures like Buffet are almost meaningless. It’s still displaying all of the problems that people pointed out for it being an actual currency. It behaves like an asset in a cornered market, not money. And it’s an asset with an inherent value of zero.

            The rampant copycat coins exist solely to fleece people. As in they are created by people who saw the Ponzi-like allocation of initial Bitcoins and thought that was a great idea.
19. Donald McNary 19

    26 January 2018 at 10:25 am

    When it comes to buying and selling of bitcoins, Liviacoins is the must-stop place.

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