Jemima Kelly, Financial Times columnist, recently highlighted some misconceptions regarding Bitcoin's singularity and decentralization.
This opinion editorial is by Stephan Livera. Stephan Livera is the host of "Stephan Livera podcast" and the managing director of Swan Bitcoin International.
Jemima Kelly, a Financial Times columnist published an article entitled "Don't Believe the 'Maximalists': Bitcoin Can't be Separated from Crypto" earlier today. I'd like some Bitcoiner reactions. Below is the entire Kelly article.
"If you've ever tried to criticize the crypto world, you are likely to have received charming rebukes." Most likely, you were told to "have fun staying poor '…"."
It's not serious. I think the "have fun staying impoverished" meme is a joke. Why? We all remember Bitcoiners telling Elon Musk (the richest man in the entire world at the time) to "have fun staying poor", as he backed away from his public support for Bitcoin. This is clearly not intended to be a serious rebuke.
"But I am now receiving a more sophisticated form of counter-criticism with increasing frequency in my email inbox. It starts with an appeasement, some sort of agreement that crypto is illegal, a scam or some form of Ponzi scheme. It quickly changes its mind, explaining that bitcoin is not affected by any of these.
This is the main disagreement I have with the article. Many Bitcoiners, including myself, believe we shoulddraw a distinction between Bitcoins and "crypto." Bitcoin is unique for many reasons:
- It does not have any pre-mines or "dev. It does not have a pre-mine or "dev.
- It is a culture that values decentralization of the ecosystem.
- It allows for cheap blockchain participation and validation (i.e. it is relatively simple to run a fully-validating Bitcoin Node), while maintaining a robust open-scalable, trust-minimized system.
- It favors soft forking, and it retains backwards and forwards compatibility to older Bitcoin node software.
- It continues to grow in acceptance and mindshare all over the globe. This does fluctuate with bear and bull markets. However, if you zoom out, bitcoin liquidity is only going up.
These points will be clear once you really look into them. onlyBitcoin also meets these criteria. Altcoins often hard fork which indicates that they have some centralization in their development. Altcoins can do things that are not easily scaleable if they have the same level of Bitcoin or the amount of transactions. Altcoins can do more things, which makes them not as open system as Bitcoin.
While you might argue that one altcoin does more than Bitcoin, are they making any meaningful improvements to the overall system? It doesn't seem so to me, which is why Bitcoin is considered a distinct category. The question of whether Bitcoin should be able to have these other features or things is another. This could also lead to negative tradeoffs in one of its other valuable qualities (robustness and decentralization, scalability. verifiability, verifiability etc. ).
Kelly appears to believe that Bitcoin arguments don't hold up, as she is against any financial incentive. Take, for example:
"First, bitcoin's origins don't matter — people who promote it now have the same financial incentives that those who promote any other cryptocurrency token."
This is a justifiable attack on Bitcoin promotion. Imagine you are an investor and promote the company openly. This is a problem?
Imagine that fraudsters are competing in the same industry. You encourage people to use your product instead. What is the ethical problem? What would you think? It doesn't, unless your grasping at straws.
Bitcoin is not a business. However, Bitcoin's promise is not that there were "no people who got in cheaper" than you. This is an absurd and impossible standard. Bitcoin promises an open, decentralized and robust, programmable, programmable monetary platform without any rulers. Kelly's criticism falls apart because the product does exactly what it says on its tin.
"Second: Bitcoin is not decentralized. Not only are miners grouped together to form'mining pool', but wealth is also extremely concentrated."
Kelly isn't correctly summarizing what the relationship between miners, pools and mining is. The miners are separate entities from the pools and can quickly re-point their hashrate to another pool. Although there are fewer pools than in other markets, miners can switch between them because it is extremely competitive. This screenshot is from the Braiins Dashboard as of September 23, 2022. It shows the locations of different pools around the globe.
Source
The recent Poolin news that the company had stopped withdrawing funds is also of interest. Many miners pointed their hash rate away from Poolin. You can see that Poolin's global bitcoin mining hash rate share has dropped from 12% to 4% as of this writing.
MicroStrategy announced Tuesday that it had purchased another 301 bitcoins. This means that this company now has almost 0.7% of the total supply.
Kelly claims she is "steelmaning the argument" but, unfortunately, her knowledge of the topic of bitcoin ownership is not up to scratch. She would be able to grasp the libertarian and cyberpunk ethos of Bitcoin and understand the need to create a monetary system that is free from coercion. Given this, it is likely that some people will get it first. It will be easier to mine, buy, or earn bitcoins than others. It is irrelevant that a single company controls 0.7% of the bitcoin circulating supply.
Bitcoin is therefore far more decentralized that the "crypto” coins.
"Third, a first-mover advantage" does not always hold.
This is true for a business context. However, to truly understand why Bitcoin is so special, we need to know why it is better than other alternatives such as fiat money or gold. You need to create something that is ten times more valuable to replace another product. Bitcoin is not ten times more than possible. Here's a quote from my friend Gigi, in his recent thread on Twitter:
It is impossible to improve the monetary properties by Bitcoin tenfold because of its limited design space. It is possible to marginally improve one thing but not by drastically reducing trade-offs in others (verifiability and scalability; robustness, robustness, accessibility).
Kelly writes about Maximalists' incentive:
Bitcoin maximalists are trying to seperate bitcoin from all of crypto to create the illusion that there is scarcity in a world without it.
Bitcoin Maximalists are motivated to differentiate bitcoin from "crypto," but the real question is, Are they right? They are.
Bitcoin is clearly distinguished from altcoins. However, it takes much research and reading to fully understand why. Kelly is not doing the necessary research and only presents a superficial understanding.
Stephan Livera contributed this guest post. These opinions are not necessarily those of BTC Inc.
Frequently Asked Questions
Can the government take your gold
The government cannot take your gold because you own it. You worked hard to earn it. It belongs exclusively to you. This rule may not apply to all cases. You could lose your gold if convicted of fraud against a federal government agency. If you owe taxes, your precious metals could be taken away. You can keep your gold even if your taxes are not paid.
How to Open a Precious Metal IRA
It is important to decide if you would like an Individual Retirement Account (IRA). If you do, you must open the account by completing Form 8606. For you to determine the type and eligibility for which IRA, you need Form 5204. This form should not be completed more than 60 days after the account is opened. Once this has been completed, you can begin investing. You could also opt to make a contribution directly from your paycheck by using payroll deduction.
You must complete Form 8903 if you choose a Roth IRA. Otherwise, the process is identical to an ordinary IRA.
To qualify for a precious-metals IRA, you'll need to meet some requirements. The IRS says you must be 18 years old and have earned income. Your annual earnings cannot exceed $110,000 ($220,000 if you are married and file jointly) for any tax year. Contributions must be made on a regular basis. These rules will apply regardless of whether your contributions are made through an employer or directly out of your paychecks.
A precious metals IRA can be used to invest in palladium or platinum, gold, silver, palladium or rhodium. However, you can't purchase physical bullion. This means you won’t be able to trade stocks and bonds.
Your precious metals IRA may also be used to invest in precious-metal companies. This option is offered by some IRA providers.
However, investing in precious metals via an IRA has two serious drawbacks. First, they're not as liquid as stocks or bonds. This makes them harder to sell when needed. They also don't pay dividends, like stocks and bonds. So, you'll lose money over time rather than gain it.
What are the benefits of a gold IRA
A gold IRA has many benefits. It is an investment vehicle that can diversify your portfolio. You decide how much money you want to put into each account, and when you want it to be withdrawn.
Another option is to rollover funds from another retirement account into a IRA with gold. This allows you to easily transition if your retirement is early.
The best part about gold IRAs? You don't have to be an expert. These IRAs are available at all banks and brokerage houses. You do not need to worry about fees and penalties when you withdraw money.
That said, there are drawbacks too. Gold has always been volatile. It is important to understand why you are investing in gold. Are you looking for safety or growth? Do you want to use it as an insurance strategy or for long-term growth? Only when you are clear about the facts will you be able take an informed decision.
If you plan on keeping your gold IRA alive for a while, you may want to consider purchasing more than 1 ounce of pure gold. One ounce won't be enough to meet all your needs. You could need several ounces depending on what you plan to do with your gold.
You don't need to have a lot of gold if you are selling it. Even one ounce is enough. But, those funds will not allow you to buy anything.
Is buying gold a good option for retirement planning?
Although buying gold as an investment might not sound appealing at first, when you look at the average annual gold consumption worldwide, it is worth looking into.
The best form of investing is physical bullion, which is the most widely used. But there are many other options for investing in gold. It's best to thoroughly research all options before you make a decision.
For example, purchasing shares of companies that extract gold or mining equipment might be a better option if you aren't looking for a safe place to store your wealth. Owning gold stocks should work well if you need cash flow from your investment.
You can also put your money in exchange traded funds (ETFs). These funds allow you to be exposed to the price and value of gold by holding gold related securities. These ETFs typically include stocks from gold miners, precious metallics refiners, commodity trading companies, and other commodities.
Should You Open a Precious Metal IRA?
Before opening an IRA, it is important to understand that precious metals aren't covered by insurance. You cannot recover any money you have invested. This includes losing all your investments due to theft, fire, flood, etc.
Protect yourself against this type of loss by investing in physical gold or silver coins. These items have been around thousands of years and are irreplaceable. You would probably get more if you sold them today than you paid when they were first created.
Choose a reputable company with competitive rates and quality products if you are looking to open an IRA. A third-party custodian is a good option. They will protect your assets while giving you easy access whenever you need them.
You won't get any returns until you retire if you open an account. Do not forget about the future!
Is gold a good investment IRA option?
Any person looking to save money is well-served by gold. It is also an excellent way to diversify you portfolio. There is much more to gold than meets your eye.
It's been used throughout history as a currency, and even today, it remains a popular form of payment. It's sometimes called “the world's oldest money”.
But gold is mined from the earth, unlike paper currencies that governments create. That makes it very valuable because it's rare and hard to create.
Gold prices fluctuate based on demand and supply. When the economy is strong, people tend to spend more money, which means fewer people mine gold. As a result, the value of gold goes up.
On the flipside, people may save cash rather than spend it when the economy slows. This causes more gold to be produced, which lowers its value.
This is why investing in gold makes sense for individuals and businesses. You will benefit from economic growth if you invest in gold.
You'll also earn interest on your investments, which helps you grow your wealth. If gold's value falls, you don't have to lose any of your investments.
Statistics
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
External Links
bbb.org
cftc.gov
law.cornell.edu
- 7 U.S. Code SS7 – Designation board of trade as contract marketplaces
- 26 U.S. Code SS 408 – Individual retirement account
finance.yahoo.com
How To
A rising trend in gold IRAs
As investors look for ways to diversify their portfolios and protect themselves against inflation, the gold IRA trend is on the rise.
The gold IRA allows owners to invest in physical gold bullion and bars. It is tax-free and can be used by investors who aren't concerned about stocks and bond.
Investors can have confidence in their investments and avoid market volatility with a gold IRA. The gold IRA can be used to protect against inflation or other potential problems.
Investors also benefit from physical gold's unique properties, such as durability and portability.
Additional benefits of the gold IRA include the ability to quickly pass ownership to heirs. Additionally, the IRS does not consider gold a money or a commodity.
Investors who seek financial stability and a safe haven are finding the gold IRA increasingly attractive.
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By: Stephan Livera
Title: You Can Believe The Maximalists: Bitcoin Is Separate From Crypto
Sourced From: bitcoinmagazine.com/culture/bitcoin-separate-from-crypto
Published Date: Thu, 22 Sep 2022 19:48:21 GMT
Did you miss our previous article…
https://altcoinirareview.com/funko-partners-with-walmart-to-drop-dc-digital-collectibles-and-physical-twin-counterparts/
