Wednesday, October 9, 2013

Proof That Bitcoin Isn't Money

A friend of a friend remarks:
Ulbricht was living, with roommates, in a rundown apartment in San Francisco, thereby proving that bitcoin is not money

19 comments:

  1. Then the dollar isn't money. After all, Warren Buffett still lives in the same house he's had for many decades despite being a billionaire.

    Non sequitor, Bob.

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    1. Warren Buffet isn't exactly sharing an apartment. I don't think it is a non sequitor to assume that consumption and income are positively correlated.

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  2. Well that proves it then! We can all go back to sleep now...

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  3. He must be an economist...

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  4. Having a simple-minded friend is one thing - but advertising it - that is unforgivable!

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  5. This isn't "proof".
    It's a non sequitur.

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  6. ...or it proves that San Francisco real estate prices are ridiculously high!

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  7. Bob, have you noticed how your audience always comments anonymously on your Bitcoin posts? They want you to find out how wrong you are without hurting your feelings.

    You are starting to resemble a scorned wife who is constantly trying to find evidence that all men a scum. Give it up Bob.

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  8. Sarcasm is lost on these guys, Bob. If he had the same amount of gold they would see you were trying to poke fun at the "Bitcoin is not money!" crowd.

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  9. This is actually a very insightful point that I hadn't thought of. If Ulbricht has $80 million in cash instead of $80 million in bitcoins, he wouldn't have been living in a shared apartment in a run down section of SF. Cash is king.

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  10. Alternately it could be the he was interested in saving his bitcoins are he expected them to appreciate in value and he liked where he was living. Not to mention that transferring a large amount of BTC into fiat might raise some flags and he needed to keep a pretty low profile.

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    1. Again, I think that is the point, People don't accept bitcoins as cash, while any decent drug dealer using cash can certainly use some of the cash to buy a decent place to live. Not being able to liquidate enough bitcoins to get a decent place to live shows just how far they are from cash.

      As far as saving them for investment, if he has $80 million dollars worth, it doesn't seem like spending $50,000 a year for a decent place to live is going to damage his investment performance.

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    2. Actually drug dealers have significant difficulties dealing in large amounts of cash. Banking transactions over $10K are reported and automated systems look for recurring cash transactions and flag accounts that seem suspicious. So in this case BTC has some or maybe more of the same problems as fiat. It's more of a law enforcement and privacy issue than a currency issue. That being said, I get your point.

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    3. Also...Based on the previous post about how the darkweb is compromised, check this great post on what DPR did wrong. He made pretty basic mistakes. http://grugq.github.io/blog/2013/10/09/it-was-dpr/

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    4. Drug dealers with $80 million in cash live a lot better than Ulbricht did. They have trouble moving the money into the banking system, Ulbricht appears to have had a serious problem spending bitcoins and also a problem converting them to cash.

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  11. He should have sold his Bitcoins to the Vinklevoss twins :).

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  12. Or maybe the Feds are lying and this guy isn't who they say he his. Or maybe he doesn't have $80 million in BTC.

    Nah. The Feds would never lie about someone in order to look good. Only nutty conspiracy theorists think that.

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  13. If Bitcoins were money, the Feds would have confiscated them by now. Word is, they are having trouble getting a hold of his stash.

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  14. A better comparison would be with someone who had $80 million in a secret numbered Swiss bank account (before Switzerland became an IRS lap dog). Sure you have lots of money, but transferring large amounts to spend on a lavish lifestyle might raise some questions from the government.

    Once out of the reach of the US government I expect a rich Swiss account holder would spend more freely. There is much to this story that I think will come out over time.

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