Bitcoin's Going to Change Everything?

Okay, let me lay it out for you in a way that you and the others can understand.

Bitcoin itself won't really dismantle the banking system. It'll present an interesting alternative, and in some ways an improvement, but scaling it would be too hard. Plus, Bitcoin itself has some underlying weaknesses and issues. You can think of it as a rather successful prototype.

What will be amazing are theoretical constructs that are now being called "sovereign blockchains." Essentially, the idea is to implement the underlying mechanism behind Bitcoin and a bunch of other cryptoassets into central banking. By migrating the predominant form of money in an economy (say the US dollar, for example), a central bank could in theory observe in real time ALL the transactions in an economy, nominally to better gauge the health of economy and better understand the velocity of money. You know, to help craft policy.

But if you carry this out to its furthest extent, it would mean *ABSOLUTE CONTROL* of an economy, by virtue of migrating as many financial instruments onto the sovereign blockchain; bonds, equities, derivatives, land registries, car registries, etc. Throw in smart contracts and the right protocol, and the control can be even more absolute. Imagine the introduction of "smart money." Taxes could be collected at the point of transaction in real time. Every payment to a retailer is automatically split and the IRS takes its cut. Same with income, capital gains tax, etc.

(cont)

In the long-term, this all means dramatic changes to banking as we know it.

Take retail banking via commercial banks as an example. In most advanced countries, digital money makes up most of the circulation in advanced economies. Physical cash is a fraction of this, sometimes below 10%. All this digital money is currently stored with commercial banks at the moment.

A sovereign blockchain system could undo all this. An individual or institution could manage their own private key to the account/wallet holding their money with little to no cost, thus creating an disincentive to deposit money in a bank if the bank charges anything above zero. In addition, any commercial bank deposit carries credit risk against that institution. Holding onto your own account removes that risk, even further disincentivizing depositing money with a bank.

The banks will probably have to switch over to a new business model where become custodians of keys rather than funds.

In addition, a blockchain system would change the global payments system, where banks earn around 40% of their revenues from. These systems currently rely on different ledgers in different institutions that constantly have to be reconciled. If its all in a single system, however...

I could go on regarding the other ways this will changing how banking works; blockchain-based assets, the total elimination of naked shorting, changes in currency exchange, derivatives, etc, etc, but you get the idea.

Give this a decade or so and you'll start seeing it.

businessinsider.com/bitcoin-price-could-be-500000-by-2030-first-snapchat-investor-says-2017-3

I originally thought BTC might top out below $50k.

But now that I understand that BTC will be exclusively only the settlement layer for the mass scaling which will take place in altcoins, I now think his analysis may be correct.

All the power broker settlement will likely to be on the Bitcoin blockchain which will be the bulk of the fungible capital generated by the masses on the altcoins as dictated by the power-law (Zipf's law) distribution of wealth. Thus Bitcoin is the reserve currency of all the altcoins.

This is why one must stay invested in this sector. Note I do think the altcoins that scale up the masses will see faster appreciation than BTC in spurts, so that is one of way of increasing one's BTC if you are expert at speculation. Otherwise buy and hodl BTC.

Wrong. PoW change and the bank gets an useless chain with no support. Also random PoW algo changes are comming in the future which will mean good luck trying to not go bankrupt performing such an attack.

good luck purchasing over 1 billion dollars worth of ASIC without going unnoticed

Lol no

Three things right now:

Not enough users (still rising)

Too complicated for the unwashed masses (User Experience needs work, or different solution)

Right now not scalable enough (SegWit/Lightning will improve this)

However much truth everyone around the globe wants to assign to it. Theoretically Bitcoin does away with the need for the traditional financial system.

In practice, currently, it offers a choice between fiat currencies or decentralized cryptocurrencies. They both have their upsides and downsides.

Yeah but what about the fact that bitcoin sucks?
It's technology is just so far inferior to the other altcoins, why can't we just have a period of growth and competition until the protocols are worked out to a point where we have some coin which is like Satoshi's whitepaper and may or may not be bitcoin?
Any other coin with a solid technological background could become the new 'gold' / reserve currency of the cryptocurrencies

Damn. Not sure I understood all this, but I got some of it. The potential seems astounding. I will reread it and consider. Thank you for the explanation user.

[spoiler]So what you're saying is buy ETH?[/spoiler]

I'm saying to not buy bank stocks, because they're facing a storm of disruption in the future, and the managerial class still thinks they can make current business models "disruption proof."

In my view, buying ETH is like buying into an index fund; it represents buying into a market rather than a specific company. Barring a calamity (like the DAO incident), its probably quite safe to say the price is likely to increase. Especially if we finally start seeing some dapp momentum over the new few months.

Personally though, I prefer picking and choosing specific cryptoassets, especially if the token price is currently extremely low (thus allowing you to load up on a huge amount) and the project/company/app you're buying into has huge potential.

Example: a few days ago I bought into the ICO for Humaniq, which wants to tackle 4th gen mobile banking for the unbanked, particularly in undeveloped countries where financial infrastructure is shit. Normal banks don't exploit this possible $380 billion a year in revenue opportunity (according to Accenture last year) because of numerous reasons: distance to rural areas, costs of opening accounts, literacy rates in certain places, conflicts, etc. It just ain't worth the risk for pennies on the dollar, even if all those pennies add up to a shit ton of money. Some mobile banking schemes exist, but so far success has been modest.

I'm willing to bet, based on my reading of Humaniq, its people, its app, etc, that it has the potential to be the killer app the market has been waiting for. So I bought up a shit ton of the tokens (currently at $0.038, give or take). If I'm wrong, I lose out and look like an imbecile. If I'm right, then I bought into Facebook in 2015: this thing takes off in a few years, then those tokens could explode in value. If it reaches $1, I've made a 2500% return. If it reaches Ethereum's price of $42, I'm a multimillionaire.

Its a risky game, but still safer than trading, which Veeky Forums obsesses over.

I checked out humaniq since it sounds interesting, but I'm not convinced it's not another indian scam. There's a bit too much sketchiness about it no?
reddit.com/r/Humaniq/comments/63qs98/humaniq_is_the_scam_stay_away_with_proof_in/
not to mention the link to their whitepaper seems to be down. I guess I'm saying, I agree with your thesis, but I have .01% confidence that pajeet brahmin is the one to pull it off.

How much did you buy btw?

It's a meme made up by high school libertarians who don't actually know what fractional reserve banking is.
These are the same people who think the gold standard will free us from banks.

The point of crypto is that it's literally just an intangible form of cash. It can be regulated just as much as cash can.

the network that secures Bitcoin is like thousands of times more powerful than all the most powerful supercomputers in the world combined. Not gonna happen.
They'll try to destroy it from the inside (they have been trying in various ways to do it, failed so far)

>It's technology is just so far inferior to the other altcoins
wrong. Study and stop spreading shitty memes, nigger. You unwashed plebeians need to stop regurgitating twitter shills and actually read about technology

>for the mass scaling which will take place in altcoins
Wrong. Altcoins can't scale for shit. The only way to save the day is to have the Lightning Network on the BTC network

Around $5,500.

I am constantly concerned that Veeky Forums's first reaction is to the race of the people onboard and write this off as a "pajeet" thing. If anything, it shows an overlap with /pol/.

If you take time to look through the team profiles, you will discover:
>the board and senior management are white
>7/8 advisory board members are white, and the one black man is a director at a respected blockchain software company
>7/10 middle white management, with the 3 minority workers being working professonials
...and then there is the ambassador program, the whole point of which is to get people in developing countries to use the app (which is how the business scales). Half of them are already involved in the local cryptoscene, small as they may be. And I would rather trust them and their own self-interest than some white liberal with a savior complex.

And all of this ignores the technical expertise and business experience of everyone in the team (including the fact that the CMO is the owner of the-blockchain.com, one of the biggest blockchain news web portals and host of a huge research library of blockchain related documents, white papers, reports, journal articles, etc), the fact that a version of the app was released BEFORE the ICO even began, the competitive advantages the app has (especially if they're going up against M-Pesa and BitPesa) in a market that is still relatively untapped, the source code and API interface is open source, development can occur on the platform itself, the white press coverage and analysis the project has received (including a partnership with CoinTelegraph), etc etc. I could keep on listing them. I suggest you take time to actually read the white paper and the white book:
humaniq.co/assets/downloads/humaniq_wp_english.pdf
drive.google.com/drive/folders/0Bx9NMFEyDPH7X3JGUFFjY09OM3c

(cont)

As for the Reddit concerns, notice that the poster is a new account created 5 days ago with just 4 posts (all against the app), one admitting that he is new to reddit, implicitly stating he is a pajeet (as you would say), and hinting at some class resentment. Apparently, the fact that the local brand ambassador is from the highest caste in India and is playing the "I'm here to spread financial inclusion" role is something that rankles his feathers.
>reddit.com/user/kiranvaidya

By the way, note that Humaniq's own ICO account responded to some allegations. And as a poster points out:
>I don't think it's as simple as declaring any of these ICOs a scam. Ethereum itself was LAMBASTED as a giant vaporware scam for a YEAR leading up to and a year after it's ICO. I went to Crypto bitcoin conference in Toronto about 1 year before their ICO. Vitalik gave a talk. They were a sponsor. They gave away hundreds of tshirts and stickers. Honestly, i felt bad for them because the general consensus was it was a scam. Too much pumping and not enough substance. Humaniq's value proposition is actually sound. A biometric wallet makes a lot of sense and is absolutely inevitable. Whether they can execute remains to be seen. Their webpage is meant for pumping because they won't be able to do anything whatsoever without money. This isn't a company founded by a developer(from what i can tell) but many successful companies aren't.
>You start talking UN, unbanked, and biometrics. People who don't know anything about crypto will like all of that.

I honestly don't know what else is needed to convince people.

If this still isn't enough, then feel free to look into other projects. I suggest Golem, ChronoBank, and Wings as interesting propositions that warrant a safe "Buy" rating.

If you want something that is stupidly safe then invest into TaaS and Blockchain Capital Fund, both of which are currently holding their ICOs.

when I get these 'tokens' from the humaniq crowd source how do they turn into a cryptocurrency later??

Please write more. Holy shit this is amazing.

So this means everyone becomes their own bank? And they choose to live, if they wish, to have most of their holdings in crypto instead of fiat?

Crypto will take some time to mature because you got middle aged and old seniors to die off, before the new generation embraces crypto like how they embrace the internet.

You misunderstand. The token IS the currency, so to speak. Its a strange concept to embrace.

You'll be able to trade them later on the secondary markets (ie ,the exchanges) later, once the ICO is over. I think they already signed a deal with SpaceBTC to have them appear there. Though I stress to point out that Humaniq is a long-term play; we're talking at least 2 years, if not 5, before we start seeing good returns. If you want to do short-term, which Veeky Forums has an obsession with because of a desire to make money NOW, then this is probably not the best pick.

Yes and no. It means that the creation of government-backed money will migrate from commercial banks (via fractional reserve banking) to policy dictated by central banks themselves using the new data available to them. In order words, it means a tighter control over monetary policy. So the Fed will have greater control over issued US dollars and could use this any way they please. This has numerous implications.

On the other hand, keep in mind that fiat currency and its dominance as we understand it is a relatively new phenomenon. Historically speaking, as a species we've often made use of a number of private currencies; just think of the Free Banking Era between 1837–1863 in the US. The movement to end this had to do with exerting political control, which is understandable.

The advent of blockchain technology has lowered the barrier for the creation of new currencies and assets, while the proliferation of communications technology allows concepts/ideas/techniques/memes/etc to spread and scale to a far higher degree. Now people can print their currencies with built-in scarcity, which allows the currency to appreciate in value as time goes on, especially if its widely adopted.

So, yes. You could in theory hold most of your holding in appreciating crypto over fiat. Regulation is still catching up.

Im going for it I'm gonna put 11 etherium in, I hope this investment pays of.

Will there be a wallet to store my tokens?

Governments derive their power from issuing currency and then taxing it with the threat of force if need be.

So unless you think all governments are just going to bend over and give up that power without a fight then it's a pipe dream.

Bitcoin is a big thing ,it's going to change the world and it can't be stopped

This is Ethereum-based, so you just need to set up an Ethereum wallet:
blog.humaniq.co/how-to-set-up-an-ethereum-wallet-for-humaniq-tokens-2ba3cd18a5af

And yes, this will all take years to happen. We still have to overcome technical and human issues.

Say you go to the bank right now. You'll be able to get your money so long as you can verify your ID. This can be piss easy and very secure if you're willing to give, say, biometric data. Even if some elaborate bank heist occurred, you're still covered (up to a point) thanks to records and FDIC insurance. What really matters it that the bank says X amount of money belongs to you.

Now imagine if someone managed to steal your Bitcoin key and used that to empty your wallet. Who are you going to turn to? How would you get it back? Can you get it back? Isn't the point of Bitcoin that it belongs to whoever holds it, like cash?

This is one of the reasons why people are still unsure, and quite reasonably so. They'd rather trust an institution to hold onto their money than risk having to guard it themselves. That is why I'm saying bank's business model will likely switch from being a custodian of money to being a custodian of private keys.

>Yes and no. It means that the creation of government-backed money will migrate from commercial banks (via fractional reserve banking) to policy dictated by central banks themselves using the new data available to them. In order words, it means a tighter control over monetary policy. So the Fed will have greater control over issued US dollars and could use this any way they please. This has numerous implications.

Hello 1984.
>the all seeing jews

That is one of the worries; they're talking about a huge amount of potential visibility and potential control, especially if we migrate ALL economic activity over to a sovereign blockchain.

Goodbye money laundering, goodbye tax avoidance/evasion, hello absolute transparency of every single transaction in an economy.

Also think about the potential international implications. Say that Western nations decided to build a supranational blockchain, like an EU blockchain to help run the Euro. What would happen if a certain country, say, Hungary, were to go off the reservation politically and piss everyone off? As a punishment, the other states could collude to bring down Hungary's entire economy by not
validating their transactions (an ultimate form of economic sanctions).

The prospect alone kills any chance of a supranational blockchain, so no worries there. But the fact that this is even possible in theory is a sign of what could be done.

But there is always a work around. Say what if people don't want the jews to see their money; what's stopping them from using XMR over fiat. If there is a big enough XMR user base then they don't need to use fiat.

OR, say someone works for ETH, he can use that to trade for BTC and go local coin meetup to exchange for fiat.

Oh, I'm not disagreeing. If you want, you can keep all your money in Monero or such. If you get enough of an XMR userbase that your money isn't losing value, all power to you.

The problem is that this is highly unlikely to happen. I don't see my landlord accepting my rent in XMR instead of dollars, my grocer taking XMR over dollars for my daily groceries, my doctor taking... you get the idea.

If you want to be 100% secure, you need to build an entire parallel economy. And this is assuming the government doesn't come cracking down. Which they will, because control and national security.

moonero nigga

While I dither, I'd also like to point out that the technology has uses beyond finance.

What sets apart the West and its success with capitalism from... basically the rest of the world... is our use of property rights.

The rest of the world has to make use of informal associations and agreements. I own my shitty little shack build on what is nominally government land in South America because the other people in the favela agree and recognize that it is mine. I just have to recognize their claims in return. This is fine for us, but its deadly limiting if I want to do anything else with my shack. How do I sell it? How do I register for certain government services that need land ID or something? How do I use it as collateral at the bank to take out a loan or a mortgage or start a business? My property is stuck in a grey zone and its just dead capital sitting there. This is the situation in most of the world today.

We used to be the same. In the US, we had cabin rights, tomahawk rights, prospecting associations, etc. Washington himself had squatters on property that was nominally his, and he couldn't get rid of them. All kinds of informal associations and groupings. What we did different is that we incorporated these systems into the law of the land. Cabin rights led to people being able to claim land. Squatters could hold property if they stayed long enough and built improvements. The General Mining Act of 1872 authorized prospecting in federal land. Hell, the state of Maine used to belong to Massachusetts. Then squatters set up there for a long time, couldn't be dislodged, and people just gave up and recognized it as an independent state. These changes, and their successors, led to the property regime we enjoy today and is one of the bases of our success.

(cont)

Blockchain, if used in a certain way as an immutable record and if people buy into the underpinning ideological philosophy, serves as the basis for land titling projects. Now I can say that my shitty little shack and the land its built on certainly belongs to me. I can then use this to take out a loan from my local South American bank, and finally start that official carpentry business (which also depends on property rights; on paper it takes years to start a new businesses in certain countries, involving hundreds of steps. You cut this down, you make things easier) I've been wanting to do. Or I can just sell my shitty shack and move elsewhere.

Suddenly, a good deal of locked capital around the world is unleashed. Hustlers and aspiring businessmen are set loose. Billions of potential growth waiting to be tapped.

This is why Ghana, Honduras, Georgia, and other countries have contracted Western blockchain firms to start titling projects in their countries. You play this out long enough, we're going to see fantastic economic opportunities and growth around the world in the next decade or so.

IF it works out, of course. There are always economic and political reasons to block this progress (you're a corrupt businessman that needs things to remain murky in order to make money by kicking the untitled poor off land you bribed an official to gain, or you're that very same official making money by handing out titles, or so forth).

nice trips and interesting posts.

In 2015 there were 120,000 BTC users on the network, by 2016 that skyrocketed to 6.5 million. If this rate continues then there will be approximately 400 million people on the BTC network. BTC high liquidity, anonymity, and ease of access are some of the key features that draw people to this currency. It's fitting that in a digital age, a completely digital finance system spawns as a consequence. More and more people are gaining access to the internet the majority of people in 1st world countries practically have a computer in their pockets at all time so the user rate will only grow.

The entire Bitcoin network is self sufficient, and extremely public which removes the need for audits or officials appointed my the government to oversee and run the distribution process. Imagine, for example, a natural disaster. The Red Cross recieves $500 million in donations, but this money goes through a middle man and with such a large amount its nearly impossible to track the money accurately. Beauracratic involvement with currency takes advantage of this and embezzle millions because they know how to forge documents to make it look legitimate. Blockchain removes the need for this, its an immutable ledger that tracks every single dollar sent, with every transaction recorded by volunteers.

Realize that almost every person and organization that isn't a charity need to have some confidentiality with their finances. Monero has the ability to have view only wallets to monitor charities and for everyone else it functions as money.

>Bitcoin will change everything
>Implying people are willing to download 200 GB just to buy shit