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    Home Unlabelled Bitcoin Mentor Monday, October 18, 2021: Ask all your bitcoin questions!

    Bitcoin Mentor Monday, October 18, 2021: Ask all your bitcoin questions!

    October 18, 2021

    Bitcoin Mentor Monday, October 18, 2021: Ask all your bitcoin questions!

    Mentor Monday, October 18, 2021: Ask all your bitcoin questions!

    Posted: 17 Oct 2021 11:11 PM PDT

    Ask (and answer!) away! Here are the general rules:

    • If you'd like to learn something, ask.
    • If you'd like to share knowledge, answer.
    • Any question about Bitcoin is fair game.

    And don't forget to check out /r/BitcoinBeginners

    You can sort by new to see the latest questions that may not be answered yet.

    submitted by /u/rBitcoinMod
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    Daily Discussion, October 18, 2021

    Posted: 17 Oct 2021 10:04 PM PDT

    Please utilize this sticky thread for all general Bitcoin discussions! If you see posts on the front page or /r/Bitcoin/new which are better suited for this daily discussion thread, please help out by directing the OP to this thread instead. Thank you!

    If you don't get an answer to your question, you can try phrasing it differently or commenting again tomorrow.

    Join us in the r/Bitcoin Chatroom!

    Please check the previous discussion thread for unanswered questions.

    submitted by /u/rBitcoinMod
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    why is housing so cheap and affordable when paying with Bitcoin?

    Posted: 17 Oct 2021 02:48 PM PDT

    October 2020 the avg house cost 23 Bitcoins.

    October 2021 the avg house cost 5 Bitcoins.

    Home prices are down 78% over the past year. Anybody know why the housing market crashed over the past year?

    submitted by /u/hyperinflationUSA
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    CNN has added Bitcoin as an official currency alongside the dollar, euro, and yen

    Posted: 17 Oct 2021 07:39 PM PDT

    Are there any other registered Democrats in the U.S. that are frustrated that Bitcoin is becoming a conservative talking point?

    Posted: 17 Oct 2021 10:58 PM PDT

    I can't be the only one. It's the only thing I really hate about BTC right now. Texas, Miami, Ted Cruz, Lummis (who I really appreciate) seem to be using BTC as a political weapon. It's making me think twice about talking with my Democrat friends and work colleagues about BTC. I can't be the only one who feels this way.

    submitted by /u/ziggyzago
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    Best seller for sure

    Posted: 17 Oct 2021 04:06 PM PDT

    Texas governor Abbott stating that Texas will become the #1 Bitcoin state

    Posted: 17 Oct 2021 06:59 AM PDT

    The American Dream Is Dead And Bitcoin Has Replaced It

    Posted: 17 Oct 2021 04:13 PM PDT

    As for now, BTC is up by $17k this month and people are chill about it. Last year every thousand to a price was feeling like a breakthrough and celebrated by the community. Interesting how over time our reactions to the price changed��

    Posted: 17 Oct 2021 10:15 AM PDT

    Does anyone else use a self directed IRA for trading crypto? If so, what percentage do you allocate for riskier assets?

    Posted: 18 Oct 2021 03:49 AM PDT

    Only 11% to go to overtake Silver!

    Posted: 17 Oct 2021 06:14 PM PDT

    A few years ago this wasn't even a wet dream. Coming for you next Gold!

    submitted by /u/110tony110
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    Appeal to community - Please pull your coins into cold storage

    Posted: 17 Oct 2021 08:10 AM PDT

    I know this post isn't exactly novel, but I think it should be reiterated.

    The futures ETF as well as any derivative investment vehicle for BTC will not be good for bitcoin long term.

    The entire premise of 21 million coins being a hard cap is threatened each time the legacy financial system adds some derivative instrument on top of btc.

    The major problem statement with fiat currencies is banks' abilities to issue unlimited unbacked cash with fractional reserve banking and quantitive easing. If we allow centralized exchanges to hold all of the coins then they can sell as many IOUs for bitcoin as they want, which is no different from your local bank issuing IOUs for dollars they don't hold. Futures ETFs will give hedge funds ways to manipulate the price as well, and these groups have even less reason to care about bitcoins long term health than exchanges.

    This is an appeal to:

    1) Remove your coins off of the exchange to cold storage.

    I know there are those that are afraid of controlling their own keys, but please put the effort in to properly secure and store your keys. Think of it as both a learning opportunity and your chance to do bitcoin a service as a whole.

    I know there are those that like earning passive interest on your coin - Consider starting a lightning node and earning sats in this manner instead of using an exchange's interest program. Your 4% APY for lending your btc to shorters is laughable compared to the amount you may lose over time to price suppression from paper btc and naked shorting.

    2) Never, EVER, EVER buy an ETF that doesn't have proof of reserves (hint, the new futures ones DO NOT).

    Educate those around you to hold the real thing. not your keys, not your bitcoin. I know there are certain investment monies that need to go into a legacy stock, but this new ETF is not the thing. Either pull the fund and buy real bitcoin or pick Microstrategy with your IRA. At least Saylor is a bitcoin Maxi.

    TLDR; I know there is already a "Proof of Keys" day, but I think this should be less of a single day thing and something we do often and unexpectedly to keep exchanges honest.

    If the exchanges have to add more btc to their reserves because everyone pulls their coins into cold storage, it will allow the real spot price to come through (Assuming exchanges aren't already keeping an honest 1:1 btc reserve for their customers).

    If this post gets even only a handful of people to pull their coins off, I feel that it was worth the time. Thanks for listening.

    submitted by /u/Thowaway24243747474
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    Michael Saylor totally gets it. He's repeating Hal Finney's hypothesis on countries making new currencies based on the value of Bitcoin.

    Posted: 18 Oct 2021 12:27 AM PDT

    Public employees will receive salary in bitcoin, says Miami Mayor

    Posted: 18 Oct 2021 03:25 AM PDT

    FIRST WEEKLY CLOSE ABOVE 60k!!!

    Posted: 17 Oct 2021 05:02 PM PDT

    Big moves from BTC today. Check it out, the highest weekly close ever.

    submitted by /u/Shhrodewald
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    Michael Saylor: We Custody Our Bitcoin And Do Not Lend It Out

    Posted: 17 Oct 2021 04:52 PM PDT

    Bitcoin revolution is just started

    Posted: 17 Oct 2021 08:11 PM PDT

    Thoughts on my portfolio?

    Posted: 17 Oct 2021 05:38 AM PDT

    100% BTC 0% shitcoins

    EDIT: and the shitcoiners started to downvote. Dudes, if you downvote, your shitcoin will still be a major 💩shitcoin

    submitted by /u/adrianm3
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    El Salvador must be happy.

    Posted: 17 Oct 2021 01:41 PM PDT

    Seeing how the people of El Salvador slowly gain trust (or, at least tolerance)..

    Seeing how Mr Bukele bought the dip & introduced geothermal powered Bitcoin mining and more, receiving confirmation for his actions after the price skyrocketed..

    Saying that I am jealous of their nationwide adoption compared to my homecountry would be an understatement.

    But I am glad it happened.

    submitted by /u/crimesonclaw
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    Bitcoin the gift horse! One day I was riding in my car in Columbus, OH listening to Michael Saylor and I see this beauty! ������ signs from above!����

    Posted: 17 Oct 2021 06:33 AM PDT

    Mark Cuban says “no” to Bitcoin ETF, prefers holding BTC - TheDailySats

    Posted: 18 Oct 2021 03:35 AM PDT

    Forget electric cars: Tesla has earned more than $1 billion for buying bitcoin

    Posted: 17 Oct 2021 02:28 PM PDT

    More countries are likely to follow El Salvador's bitcoin adoption model in the future.

    Posted: 17 Oct 2021 08:02 PM PDT

    El Salvador's Vice President Félix Ulloa predicted that more countries will follow El Salvador's Bitcoin adoption model during a recent meeting with Pascal Drouhaud, vice president of the LATFRAN association. ulloa expects poor El Salvador to become an economic and financial hub as it makes bold bets on Bitcoin. In addition, he claims that Bitcoin will benefit the approximately 1.17 million Salvadoran immigrants living in the United States.

    submitted by /u/Valentina19870424
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    No one is talking about this in r/Bitcoin?

    Posted: 18 Oct 2021 03:49 AM PDT

    "The Bitcoin mining community has resoundingly voted for the Taproot upgrade to the Bitcoin network and it's now expected to be implemented around the end of 2021. The upgrade is primarily aimed at improving the privacy of multisignature (multisig) transactions and unlocking the potential for smart contracts to run on Bitcoin, planting its tanks firmly on Ethereum's lawn. The upgrade will also make it cheaper to transact on the Lightning Network."

    I posted this paragraph here a little while ago, and xposted to r/lightning network, to crickets, had absolutely no response. Anyone have any thoughts/info on the Taproot fork? It's the biggest Bitcoin upgrade in a long time and the net seems kind of quiet on this?

    I've heard it mentioned that Bitcoin can attribute some of its reputation for security to its simplicity, could the facilitation of smart contracts, DeFi and the minting of NFTs open up chinks in Bitcoins armour? Could the network become bogged down by the new traffic from DeFi/NFTs?

    Should I sell my vital organs to but BTC before taproot?

    submitted by /u/h0rologist
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    Jamie Dimon's embarrassing lack of knowledge, logic and common sense openly shown to the public. The desperate "Donald Trump of banking" proves how detached from reality he is.

    Posted: 17 Oct 2021 04:18 AM PDT

    He said [1]: "I'll just challenge the group to one other thing. How do you know it ends at 21 million [bitcoins]? You all read algorithms? You guys all believe that? I don't know, I've always been a sceptic of stuff like that."

    Yes Jamie, we all read algorithms, and it is no rocket science. If Jamie himself does not read the algorithm, why doesn't he do so instead of embarrassing himself by proving how retarded he is? Because he is a "sceptic" of the computer language C++ and "stuff like that". Interesting.

    Jamie, the Bitcoin code is open to the public since 12 years, easy to understand and was peer-reviewed AND TESTED(!) 1000s of times by experts, incl. academia and IT experts working for banks or governments all around the world. Not a single reviewer has pointed to any lack of the 21 Million cap in the code. If you cannot trust your own IT experts, you should step back as CEO due to loss of authority.

    Jamie has lost his connection to reality and manipulates the masses with evil lies, turns out he is to banking what Donald Trump is to society and politics. An evil clown - someone who should not and could not be taken seriously, if he weren't such an influential public person.

    Reference: [1] https://markets.businessinsider.com/news/currencies/jamie-dimon-bitcoin-worthless-questions-21-million-supply-cap-2021-10

    submitted by /u/Amichateur
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    Canadian city becomes first to heat buildings through Bitcoin mining

    Posted: 17 Oct 2021 08:25 AM PDT

    Beyond SoV - Bitcoin is the best money in history. It's the pinnacle of monetary evolution. Reserve currency status is a fait accompli. Nothing can stop this eventuality. Bitcoin has already won.

    Posted: 17 Oct 2021 10:14 AM PDT

    Beyond SoV - Bitcoin is the best money in history. It's the pinnacle of monetary evolution. Reserve currency status is a fait accompli. Nothing can stop this eventuality. Bitcoin has already won.

    How can a good store of value (SoV) also be a good medium of exchange (MoE) and unit of account (UoA)? Seems too perfect, right?

    If the goal of Bitcoin is to replace fiat money, but Bitcoin is expected to increase in value in the long term, wouldn't it be prohibitive to use Bitcoin for paying for things?

    This perspective comes from measuring Bitcoin's value in an inferior, depreciating form of money, and stems largely from a collective price illusion that the dollar is a stable representation of monetary value. The dollar price of Bitcoin is merely relative face value, rather than intrinsic value, while Bitcoin, as a nascent form of money, still very much remains in the process of discovering its true value to humanity.

    You could argue that it's in fact humans who are in the process of learning to appreciate its value. Bitcoin is quite the monetary paradigm shift.

    What is money?

    Money is anything that's accepted as representing value by the parties to any transaction. It's really that simple. Three thousand years ago, cowrie shells were used to represent value. Humans have always sought money that can hold value over time until it was required to purchase other things that hold value to them - goods and services.

    When you purchase goods and services now, the question you ask yourself is whether what you're purchasing is valuable enough to you that you're happy to part with a certain amount of dollars to acquire it. Everything being denominated in dollars/fiat money lends to this perspective that the dollar represents some value and can be exchanged to buy things you need in life.

    When we get to a place where sats replace dollars as UoA, it would be a question of whether the good/service you're purchasing is necessary or valuable enough to you that you're happy to part with a certain amount of sats to acquire it.

    But how can Bitcoin even be money when its supply is finite and limited to 21 million? It's finite but divisible. Maybe there aren't enough bitcoins to go around for everyone, but there are more than enough sats to go around for everyone - circa 2.1 quadrillion.

    Let's try imagining that 1 Bitcoin represents a 100 million-dollar bill, which at the current rate of inflation may not be so far-fetched to imagine in the near future. Are there enough 100 million-dollar bills to go around for everyone? Probably not (yet). But there are enough one-dollar bills to go around for everyone.

    Additionally, the smallest unit on Lightning Network is millisats, 1/1000th of a sat, named after mill, which is 1/1000th of a dollar, an abstract unit of account in dollar-denominated accounting.

    1 Bitcoin = 100 million sats

    21 million Bitcoin = 2.1 quadrillion sats = 2.1 quintillion millisats

    Infinite divisibility, but not infinite supply, is an important property for money. The putative best scarce money in history, gold, does not have this property. Bitcoin does.

    Bitcoin economy

    In a Bitcoin economy, every good/service will be priced in sats, rather than dollars, and you can move your sats instantly from one corner of the world to another corner of the world at next to no cost peer-to-peer without middlemen. No money in history ever had this property, not dollar, not gold, and it's arguably what makes Bitcoin usurping the dollar as the world's reserve currency inevitable.

    What a Bitcoin economy would do is immediately eliminate the moral hazards that inhere within the extant monetary paradigm predicated on arbitrary, whimsical, unscrupulous, flagrantly unmoderated expansionary policies founded upon nothing more than the existence of a lender of last resort with access to an infinite supply of money created without any effort out of thin air to continually bail out those at the top of the pyramid exploiting said moral hazards with impunity. It would restore rigor and sustainability to credit lines without frequent intervention at the cost of rampant inflation, and overall, cultivate better spending habits.

    Fiat money is a pyramid scheme

    The current system of credit constantly incentivizes or even forces you through a myriad of machinations to keep spending money from tomorrow's labor, but the new injection of money from your tomorrow's labor ends up being concentrated at the top, with the ultimate consequence of inequitably diminishing your purchasing power and continually enriching those at the top of the pyramid.

    In short, money borrowed against your future labor ends up destroying your own purchasing power while the lender profits off your future labor, both in the form of interest and by being closer to the new money. It's a double whammy. Fiat money post hoc undercuts the value of your work and time.

    ​

    A system of credit based on infinite, but concentrated expansion of supply. Inflation benefits those close to the new money (top of the pyramid), while those at the bottom bear the brunt of it. This is Cantillon Effect

    ​

    This system is "sustainable" for a reasonably long period of time, until hyperinflation becomes untenable, only because it enables infinite, unmoderated expansion of the money supply. Fiat monetary systems have never in history survived beyond a few generations.

    ​

    We've had 3800 fiat currencies in history. They've all failed

    ​

    "I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world. No longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men." - Woodrow Wilson in 1919, in reference to the Federal Reserve act of 1913, which he signed into law.

    ​

    Anatomy of a 100-year pyramid scheme

    ​

    Aftershocks of the Nixon Shock

    In 1971, President Nixon canceled the convertibility of the US dollar to gold. The subsequent collapse of the Bretton Woods system gave central banks absolute monetary authority as the dollar was no longer required to be backed by gold reserves.

    The Fed's newfound ability to continually manipulate supply, interest rates, and velocity of money has led to deleterious consequences. Perpetual expansion to spur economic growth has sent deficits spiraling out of control and resulted in, inter alia, a vicious cycle of high inflation, recession as a consequence of efforts to mitigate the effects thereof and ever-increasing, now extreme, economic inequality.

    ​

    Inflation makes goods more expensive but wages do not keep pace. Productivity must increase for companies to retain margins and be able to compete

    ​

    CPI has risen thirtyfold since the Fed was created, six times as much in the last 50 years as the preceding 200 years

    ​

    Free money for those at the top of the pyramid means cash-rich companies are incentivized to borrow money for stock repurchases, pumping the price of their stocks, rather than try to earn capital by being entrepreneurs, which is how the world is supposed to work in a free market

    ​

    Income of the top 0.01 parabolic divergence from per capita GDP since 1980

    ​

    We seldom speak of the climate consequences of a monetary system sustained through impelling ravenous consumerism

    The Pinnacle of Monetary Evolution

    I view Bitcoin to be the culmination of humanity's 7000-year quest to perfect the representation of value by truly democratizing its creation, distribution and exchange. Never before have we had a money with all the necessary properties of sound money. All previous forms of money had compromises.

    Scarce money has always been sound money but previous iterations of scarce money lacked the other properties required to be viable as MoE and UoA - fungible, readily portable, infinitely divisible, incorruptible, indestructible, provably finite and objectively verifiable.

    Bitcoin ticks all the boxes. What's more? It adds a whole new dimension to money hitherto unimaginable, obviating the need for trust, eliminating counterparty risk without the burden and attendant inefficiencies of involving trusted middlemen.

    ​

    Sound money fulfills all three functions of money - SoV, MoE, UoA

    Triffin Paradox

    The Triffin paradox explains why any sovereign currency serving as a global reserve currency is unworkable - the state issuing the reserve currency is required to continually run up a deficit to meet the world's demand for its currency. This creates a conflict of interest between domestic and international monetary policies, which becomes untenable in the long run, leading to the collapse of the system. The average lifespan for reserve currencies is 95 years.

    Bitcoin is the only monetary system in history that has the properties to last forever, for it doesn't derive value from the authority/wealth of the issuer, which is fleeting, but a timeless universal constant - hard-coded mathematics.

    Bitcoin is the reserve currency of the universe, should we ever need one.

    ​

    Reserve currency status does not last forever

    ​

    Hayek had a dream

    ​

    Satoshi made it a reality

    ​

    One man's momentary ingenuity. Humanity's timeless inheritance. Let's not somehow contrive to screw this up lest future generations look unkindly upon us.

    submitted by /u/xcryptogurux
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