
Bitcoin Is Now Bigger Than Goldman Sachs and Morgan Stanley - chanfest22
http://fortune.com/2017/10/13/bitcoin-goldman-sachs-jp-morgan-price/
======
Kevin_S
Comparing the market capitalization of Bitcoin to GS or MS is pretty useless.
Only interesting info here is the basic fact that today's price hike is
bringing BTC close to a $100 million market cap.

Pretty crazy to think about for a thing I passed on buying for $20 a pop.

~~~
rashkov
that "market cap" formula is simply the number of outstanding bitcoins
multiplied by the current price. Completely made up and fairly meaningless

~~~
billmalarky
>Completely made up and fairly meaningless

That's the total value of bitcoin at the moment. How is that made up and
meaningless?

~~~
hawkice
Market cap is frequently a less-than-useful metric, but for a "currency" like
Bitcoin, it means almost nothing. We have no idea, really, how much is
circulating, how much is permanently lost, and there's no transaction where
the market cap really plays a part.

~~~
billmalarky
The value of bitcoin seems to trend more and more towards being a digital
wealth store over a currency. In that case BTC "market cap" is a somewhat
useful indicator of how much wealth is stored. It's rough but market caps in
general are, especially early stage companies.

------
forkLding
I think this could pose a problem in the future for Bitcoin. Bitcoin was meant
to be a decentralized vehicle of value that you could use to trade or buy
things.

However recently its being treated more as a stock and being stockpiled so I
no longer see people as willing to pay for different services etc with Bitcoin
as they used to because they can gain more value by waiting which goes against
Bitcoin's intent as an independent vehicle of value.

Even though one could argue that Bitcoin has the status of gold but gold is
not something one commonly trades or uses to buy food etc in a normal non-
disaster scenario.

EDIT: Because this comment is bringing a lot of attention, I would like to
reiterate my stance on Bitcoin. I'm supportive of Bitcoin, I would like a
decentralized currency that is not tied to the importance of any country or
government and as well can be used to foster trade between countries simply
because it is much easier to just buy foreign goods than in the current state
due to import duties, etc.

Moreover, I see the world moving towards more coming together as a whole than
fighting over lands and other issues that don't directly benefit humanity from
using Bitcoin.

However my problem is the fast-increasing price of bitcoin is increasingly
headed towards the playground of high net-worth individuals or
organizations/investment banks such as Goldman Sachs and no longer being able
to be traded between normal people who don't have their deep pockets or are
scared away by the pricing which prevents Bitcoin from becoming a worldwide
vehicle of value to be used for common transactions and sort of deviates from
the original intent.

I also know one can trade decimal value Bitcoin for food and it could the
volatile nature at play but it defeats the purpose if one needs to first check
the Bitcoin markets before deciding on an eventual decimal value amount for
the food paid.

~~~
olegkikin
You can buy a better computer by waiting. Does that stop you from buying
computers?

Considering how easily people invest cryptocurrencies into quite risky ICOs,
you can see that people don't have any problem spending, as long as it's
something they consider valuable.

~~~
simias
That's not really the question though, a better question would be "you need to
buy a computer today, do you pay in bitcoin or fiat?"

If you believe that bitcoin is going to be successful then you should
absolutely pay in fiat.

There's also a bigger question, I may need a computer today so I'll buy one
instead of waiting. But what about the money that I don't need to spend, my
retirement fund or something like that? With inflationary currency I have an
incentive to invest that money, fueling the economy. With bitcoin I can just
let the money sleep in my cold wallet and I know that it'll keep getting more
and more valuable by virtue of being in ever more limited supply. The rich get
richer and the poor can't get a loan.

Of course you might say that if the economy is unhealthy it'll cause a
recession which will end up devaluing my bitcoins, but then you have a
prisoner's dilemma: you want people to invest bitcoins into the economy but
you sure as hell don't want to be the one doing it.

But remember kids, bitcoin is about killing the greedy banks and helping the
poor farmers in Africa or something so fight the good fight and buy those
coins.

It's amusing to me how the bitcoin community rejoices every time a business
starts accepting bitcoin but at the same time the rallying cry is always
"HOLD", as in do not ever spend your bitcoins because they're going to
increase in value. There's an amusing dissonance here.

~~~
rothbardrand
Well, the thing about bitcoin is that anyone can buy bitcoin. If you're poor,
you can have coinbase buy $10 in bitcoin a week automatically. It's an
investment of a quality that isn't really available in other forms, and
accessible to poor people and middle class who are excluded from things like
venture capital and other things by securities regulations.

HODL doesn't mean never sell nothing, it means don't try to trade in and out
of bitcoin to time the market.

Nothing wrong with spending some bitcoin, that's not opposed to holding, just
better to spend less bitcoin than you're earning from your salary each month.

~~~
simias
Saving money is a luxury. That's where the huge inequality lies. Just google
the issue to find tons of links, here's one at random:
[https://www.forbes.com/sites/maggiemcgrath/2016/01/06/63-of-...](https://www.forbes.com/sites/maggiemcgrath/2016/01/06/63-of-
americans-dont-have-enough-savings-to-cover-a-500-emergency/#4c6e93384e0d)

>63% Of Americans Don't Have Enough Savings To Cover A $500 Emergency

Most people simply can't afford to invest a significant amount of money in
bitcoin, especially with the high volatility we're having at the moment.

That's actually the point the parent was trying to make, except it backfires
here. People won't stop buying food, clothes and paying rent to invest in
bitcoin for later returns. They have to spend that money. Rich people on the
other hand can do whatever they want.

If poor people want to become rich they'll probably need some initial
investment, but bitcoin's deflation removes some of the incentives for rich
people to invest money.

One way to solve this issue would be to tax bitcoins savings to force the rich
to "spend" their money by paying taxes, but at the same time bitcoin makes it
easier than ever to hide and launder your money and even if the state manages
to track your account they can't cease it without having access to your
private key. Forget the panama papers, forget the lux-leaks. All you need is a
computer running the bitcoin client and you can move millions anonymously
without any intermediary.

~~~
rothbardrand
I don't understand the comment "especially with the high volatility we are
seeing at the moment". Volatility doesn't change your ability to have coinbase
buy $10 in bitcoin every week... in fact because of volatility you can dollar
cost average that way. Even you could have them do $10 a day if you want to
put in $300 a month. There are millions of people who can afford that... but
they don't save, as you have pointed out.

The not saving part is a cultural and habitual issue. People were addicted to
credit in the past 20 years and this is due to a lot of forces, mostly
government driven that benefit a fiat currency system.

Bitcoin not being fiat is quite different and it will take decades for habits
to change, this is true.

That said, my facebook is overrun with non-technical, random people who are
buying Bitcoin and Ethereum.

I don't see how bitcoins very low inflation rate (which produces price
appreciation as adoption increases) disincentives investment.... instead it's
an incentive because you can see the change month to month.

Taxing bitcoin and making the rich spend their bitcoins makes no sense...
there are bitcoin whales with 100 times as many bitcoin as I have... doesn't
affect me. IT's not a disincentive in the least.

~~~
simias
By the high volatility I meant that poor people can't invest money they can't
afford to lose because it's too risky at the moment. You can't invest $500 to
take them out two months for now because you don't know if they'll be worth
$1000 or $50 by then.

>Taxing bitcoin and making the rich spend their bitcoins makes no sense...
there are bitcoin whales with 100 times as many bitcoin as I have... doesn't
affect me. IT's not a disincentive in the least.

That's the kind of short sightedness that worries me about the bitcoin
ecosystem. It _does_ affect you if you ever need a loan to buy a house or
start a business because those "whales" which will be the new 1percenters
won't have any incentive to lend you money. The rich gets richer, the poor
remains where they are. We end up with all the problems and inequalities we
have today, except worse.

We killed the banks and replaced them with other banks except these new banks
are even more opaque and will be even more stingy about lending you money. And
on top of that we waste an ungodly amount of energy securing the blockchain.
How is that an improvement again?

~~~
rothbardrand
Your response comes from a.... perspective on economics that makes no sense to
me. It's irrelevant if others have more bitcoin... if I am getting a loan, I'm
certainly going to get it in the US dollar which has already lost %99.99 of
its value.... cause I can pay it back in even more worthless dollars down the
road.

In fact, my car loan's interest rate is below the rate of real inflation---
glad I bought bitcoin instead of paying cash!

You can't provide any evidence that we waste any energy on securing the block
chain, in fact, the market value of bitcoin makes mining profitable, proving
you wrong.... further, you ignore the cost of fiat currencies which are
several orders of magnitude higher, including in energy usage.

------
pdog
Would you rather own all of Bitcoin (current market cap: $100B) or all of a
company with $10B in annual operating income? If it's the former, why?

~~~
chanfest22
As more people own Bitcoin, the value of Bitcoin goes up as the value of the
network increases. As the network becomes more mainstream, more people start
questioning why there needs to be a centralized investment bank making $10B in
annual operating income.

~~~
patio11
Is there a particular line of business of Goldman Sachs that you believe is
either vulnerable to people's opinions of it as non-competitive with Bitcoin
or factually imperiled by the existence of Bitcoin a technology?

~~~
chanfest22
I don't have an investment banking background and I'm not a financial services
expert, but it does seem services related to raising capital (e.g.,
underwriting securities, assisting with IPOs, etc.) may not be as valuable
with alternative options such as raising financial capital through token
sales.

------
jaltekruse
Wouldn't it make more sense to compare the value of all of the bitcoins to the
total assets under management of the large banks? Many of them manage over a
trillion in assets. Bitcoin is designed to be a replacement for bank accounts
and credit cards in a sense, just without all of the centralized authority and
meat powered overhead to keep everyone trusting it. Its kind of crazy that it
has worked out so well. While there have been significant investments on
hardware to power the network, I'd have to assume the cost of maintaining the
network is pennies compared to what a bank spends to manage assets. That is
the real disruptive power of bitcoin.

~~~
rothbardrand
A better comparison is between bitcoin and countries currencies... it's
something like number 59 in the world, though that is from a couple weeks ago.

Bitcoin is really a new currency, and comparing it to company market caps and
banks sizes is not really fundamentally useful, but it is useful for giving an
idea of the size of the bitcoin economy.

~~~
vannevar
Number 59 based simply on the amount of Bitcoin owned, or the rate of real
world transactions (as opposed to mere speculation) conducted in it? I would
argue that the latter is a more valid way to measure a currency, and I
seriously doubt Bitcoin would crack the top 100 by that measure. The Bitcoin
"economy" is almost entirely made up of currency trading.

~~~
rothbardrand
Ranked by value. I don't get how "mere speculation" is considered a bad thing,
or makes bitcoin irrelevant. IF it's digital gold right now, fine. Its gold
that costs nothing to store, and very little to transport, unlike actual gold.

Gold has a market cap of $8T. If that's the use case bitcoin ever has, it will
still ultimately be worth $380k each if it grows to bitcoins size... and it
has several advantages over gold.

Is gold worthless because its "merely speculative"??

~~~
vannevar
I didn't say Bitcoin was worthless, it clearly is not. But it is not a viable
currency yet. Gold is also not much used as currency anymore, though it once
was.

------
osrec
An interesting way to put it... Almost like saying the market cap of the
British Pound is bigger than Goldman and MS!

~~~
RasputinsBro
Except people are actually using GBP for something. BTC is just people holding
on to it hoping it goes up.

Put differently, are there any circumstances where people would buy GBP
expecting it to go down? What about BTC? That right there tells you the
difference between the two.

~~~
rothbardrand
Not really. I get paid in BTC and I pay my bills with it, buy things on amazon
via Purse with it, etc.

There are a great many people building businesses on the unique features of
BTC.

This "nobody uses BTC" meme needs to die-- yes, it is still the early days,
it's a new technology. We're still in the "hey I got a personal home page on
the information super highway!" stage of adoption-- but that didn't mean the
internet was useless.... and we haven't even gotten to the bull market and
pets.com era. It would be silly to say the web was useless since nobody needs
their own homepage.

~~~
twohlix_
Yes that may be true, but that also means BTC is essentially in a deflationary
period as the buying power of the currency is currently going up with time
(unlike most Fiat, which the buying power tends to decrease during an
inflationary period) so holding BTC makes sense to a lot of players with it.
So there is a bit of an incentive for its use as a speculative instrument.

A lot of the speculative buyers don't really understand how volatile BTC can
be and that it is a usable currency.

The reason I say its in a deflationary period (while demonstrably false as
more BTC are being produced by miners) is because its BTC / person interested
in BTC seems to be decreasing.

~~~
rothbardrand
Yes, effectively we are experiencing deflation against fiat as the price is
going up... and also %80 of all bitcoin has been mined, at the next halving
and the one after that the rate of new supply will be cut twice.... which
means over the next 8 years, its all going to be about adoption of the
ecosystem.

It may turn out that bitcoin is not used for buying daily necessities for
awhile, but there are a great number of potential new businesses that will be
built on and around bitcoin.

Just like the internet gave us Amazon and Facebook, bitcoin will give us next
generation companies that are quite different from the current economy.

"Bitcoin is the internet of money" is really applicable slogan.

------
rothbardrand
You can buy a fraction of a bitcoin!

People don't seem to get this. Unlike Berkeshire Hathaway or any other stock,
you don't have to buy a whole unit. BRKA shares at 6 figures are out of range
for most people because you have to buy at least one whole share.

Bitcoin is divisible down to the satoshi-- 100,000,000th of a bitcoin. That's
too small to transact in currently, but there's nothing stopping you from
buying 0.1 or 0.01 bitcoin.

------
creatrixcordis
When "the bitcoin" starting gaining momentum, i thought that "bitcoin" and the
public distributed ledger was an exercise to see if the psychology of people
has evolved to reduce the dependence on institutions and find out if
inequality is because of these institutions or the 1%. However as we are
finding out, the same problems are arising but with new technology. The ones
with money to risk are playing the game and the public distributed ledger and
bitcoin is yet to show us anything different other than the status quo. Who
gives a shit if it's decentralized and "transparent" if the problems that a
lot of people touted bitcoin/blockchain would "solve" are just replicated.
Kinda like who cares if there are many choices, if you don't have the capital
to exercise those choices. I am beginning to think that bitcoin is just
another channel to speculate on that promises anonymity but fails badly at it.
Maybe it's pre-packaging as an antidote to pre-bitcoin financial structure was
empty. I don't see how the average world citizen is able to invest with these
prices, therefore aiding mobility. I thought wrong... but sure wish i bought
it when it was $20 :)

~~~
jstanley
OK then, enlighten me.

In what ways does Bitcoin recreate the status quo problems of (1) the central
bank being able to print arbitrary amounts of money, and (2) all individual-
to-individual payments subject to censorship by a very small number of third-
parties?

~~~
creatrixcordis
There is nothing in the protocol that will prevent anyone from hoarding or
buying large amounts of bitcoin because they already have the capital to begin
with. Therefore you can think of those people as similar to institutions or
the 1%. So bitcoin is just another investment mechanism. That's all. No
panacea here, just an over-hyped new technology that helps create profit for
the ones who already have money. One that currently is only available to
people who have enough resources to risk. The panacea that "bitcoin" was
touted as across the web and forums galore, is just utter bs. I see a world of
many private blockchain implementations but nothing that solves these
censorship and printing money issues you speak of. Since according to popular
theory when you print money your currency get devalued, but bitcoin also goes
down when a gov say we don't like it or someone decides to start cashing in at
a large scale or overhype of an issue or underhype of another. The end result
is the same, less value.

But here are your answers:

1) You live and take advantage of many things you might take for granted in a
society that has a certain framework that must be maintained by service
providers and it is maintained implicitly by the hordes of people on earth,
when greed occurs or kinks in the system happen, printing money or not
printing money are just tools to deal with issues.

2) Last time i bought something on craigslist, ebay, alibaba, amazon or from
Sandy down the street i don't remember any censorship. I could be mistaken
though. Maybe i did not think about something. I would like to see an example
of this payment censorship you say largely affected your personal life.

Now definitely if you are trying to buy armored tanks, automatic weapons,
drugs, women, censored dildos, yeah i could definitely see censorship. I just
don't try to buy those things. :)

Don't get mad now, my sense of humor is an acquired taste :)

~~~
rothbardrand
The %1 has preferential, essentially exclusive access to high risk, high
reward investments, namely startups and hedge funds... but bitcoin and
ethereum etc give regular people access to such invesmtents that accredited
investors would previously had exclusive access to. This enables the %99 to
invest in a way they couldn't before.

There are a lot of people who got rich because they got into bitcoin early...
well, here's the secret-- it's still early. Very early.

Bitcoin solves the censorship issue-- nobody can stop you from transacting
your bitcoin. It's not perfectly private, but things like z.cash and other
technologies are enabling the anonymous own and control of bitcoin.

Printing money is a form of theft. People will pay for services they want.
There's no problem for Amazon or Walmart or any of hundreds of service
providers getting people to pay for their services. They don't have the
ability to just print money to pay themselves (and give to the well
connected-- it's ironic you call this a tool when we have seen $10T in new
money issuance since 2008 that has mostly gone to politically connected %1 to
enrich themselves at our expense.)

Censorship happens all the time-- government prevents you from buying
insurance under Obamacare, for example. (literally, obamacare plans have no
underwriting and thus are not insurance) that's a whole category of goods that
are moral yet illegal to sell, and you are forced to buy an inferior product
to replace it that doesn't deliver on the same promise.

Further, censorship is present in the form of border controls-- there were
reports of agents stopping people on jetways as they were boarding jets to
search to see if they were taking gold out of the country. From 1915-1975
approximately it was illegal to own gold in the USA and smuggling was
occurring.... that's literal financial censorship and it ended not that long
ago. There are a great deal of controls on USD movement, FINCEN wants to track
your assets internationally, and ultimately restrict what you can move and
when... that's censorship.

~~~
creatrixcordis
The 1% also has access to bitcoin. I would love to see the yearly incomes of
people who invest in bitcoin and than we shall see about this "bitcoin is for
everyone" rhetoric. Actually in fact, i would love to see a lot more
transparency about the people who do invest in bitcoin, so the bitcoin story
can be developed supported by more facts. So that way we will know who the
interested parties are which will tell us lots about it.

The censorship issues you describe are describing people that already have
money, so i don't know how these people don't follow in the above category. It
sounds like these people don't want to pay any gov tax, well those are the
kind of people that should stop using any of the services that society pays
for using tax. They wouldn't go very far if that was to happen would they. I
don't feel bad for them. If gov tax is such a big issue, why even live in
society, money surely came to your pocket from society in the first place, you
had to make it somehow, whether legally or illegally. So you definitely
benefited. Essentially you are stealing from everyone in society when you are
attempting to avoid tax or tariffs when moving your money out of the country.
How much money do you really need man? The people that are investing in
bitcoin are not living on a dollar a day.

Bitcoin is not for everyone and it does not make it easier for wealth to be
distributed or aids upward mobility unless you count the early adopters which
a lot of them just so happen to be insiders in the first place. Similar to
insider traders.

Borders aren't going anywhere for a while. The real question is if these
people have this money that are scared that it might be taxed or prevented
from going out of the country. How did they make it in the first place?

The points you bring up have to do with people which do not want to support
the society in which they live. They want to take more of the pie and bitcoin
is an avenue for that at a larger scale than before.

I'm not looking for moral high ground here, but i just don't see how it
benefits the regular population.

Ladies and gentleman, time to buy, it has been noted that suddenly bitcoin
will solve the US health insurance problem. Right...

Smuggling will always occur before and after bitcoin.

~~~
rothbardrand
It's really none of your business who owns bitcoin. This surveillance society
we are in isn't keeping the %1 in check. bitcoin is a reaction to that, as
well as to the fiat fractional reserve banking system.

People are happy to pay for internet service. If government was delivering
value, then people would be happy to pay for it... alas, most of your tax
money goes to blowing up brown people and paying off political allies than
actually providing any services.

I always love the "if you aren't robbed as much as I think you should, you are
stealing from me" argument.

Everyone who buys bitcoin today is an early adopter. We have not crossed the
chasm. but we are getting close.

How people make their money is none of your business. And you legitimately
cannot move large amounts of money outside the country without being spied
upon. It's not a question of the source of the funds, but the government
trying to control the flow of resources out of the jurisdiction as a result of
their terrible management of the economy. That's what exchange controls are
all about. Delaying the collapse of a hyper inflationary currency.

Yeah, you think people wanting to avoid theft are greedy, you're wrong.

You're not even responding to the healthcare point, misrepresentation isn't
impressive.

Really sounds like you have a major axe grind, but I gotta tell you, buddy, so
long as you go around thinking other people are your property to enslave
you're going to have a bad time.

Bitcoin is liberating us from authoritarians like you.

~~~
creatrixcordis
Oh now the government is stealing from you. I think it's time to open the
faraday cage and come out. Everything is everyones business, now i am the
oppressor because i ask questions and don't drink your bitcoin kool aid.
right... We need more people like you liberating us from the phantom forces of
evil, i award you the golden cross of the bitcoin nation, mission
accomplished. I didn't respond to the healthcare point because it's a bullshit
attempt at an anchor which has no basis.

For the record, i have no axe to grind, i could care less because i am not
involved in trading bitcoin. Just want to understand it better and clear the
smoke a bit.

------
nullsmack
So what happens if/when the market crashes? Worse than subprime mortgages?
Will it be 2007/8 all over again?

~~~
rothbardrand
Early on, I expect that Bitcoin will have lower prices when the Fiat market
crashes, because people will sell assets to raise money to cover margin calls.

However, Bitcoin generally has rallies whenever government tries to control
markets in a crisis-- for example Cypress forcing everyone to take a haircut
-- a lot of people moved to bitcoin to protect their assets.

As governments continue to mismanage their economies and their currencies,
this is bullish for bitcoin because it was designed to solve these problems
once and for all, or at least try to.

~~~
sova
What do you mean when you say the crash of the Fiat market? Could you give me
an example to help understand?

~~~
rothbardrand
Probably easiest to read that as "the stock market" but I mean stocks, bonds,
treasuries and other assets. We had market crashes in 2001 and 2008, and there
is another one likely in the next couple of years, I expect. Quantitative
Easing has given us a fiat bubble across many asset classes, and I expect it
will crash, and Bitcoin will be hurt in the short term and then rally in the
medium term as the crash continues...

Hope that makes it clearer.

~~~
sova
That makes it very clear, thank you. So, let's say the Fiat markets go down
holistically and people have assets in the Fiat markets like stocks. The
market trends downward for a while and people sell their assets to avoid the
"crash" or potential "forever loss" of assets. So, people will also likely
sell their bitcoins off at this time, and in general the price will be lower
for a good sprint.

Thanks for clarifying, I believe I caught your gist.

~~~
rothbardrand
I expect bitcoin will crash in the early days as well... but it's unclear how
long that will be, or whether it will become a safe haven that people start
buying again.

Bitcoin is literally a response to the 2008 crisis-- the genesis block has a
quote about bank bailouts.

------
kapauldo
Anyone know what the ratio of payment transactions over speculation
transactions is with Bitcoin? Is it knowable?

------
petraeus
Bitcoin is just another virtual assets, like .. paper gold. Its never going to
be a currency. The whole model is flawed.

