My new podcast episode is out

Bitcoin vending machines at Walmart

 Bitcoin is here to stay, folks.

US retail giant Walmart, the world’s largest company by revenue, has launched a program to allow customers to buy bitcoin at 200 of its stores via Coinstar ATMs.

“Coinstar, in partnership with Coinme, has launched a pilot that allows its customers to use cash to purchase bitcoin. There are 200 Coinstar kiosks located inside Walmart stores across the United States that are part of this pilot,” Walmart communications director Molly Blakeman told CoinDesk on Friday.

Read full story here.

My new podcast episode is out.

My new podcast episode is out.

My new podcast episode is out.

Bitcoin Exchange — Modern Monetary Theory (MMT) vs BTC to be the Main Event of 2020

Bitcoin struggling to remain relevant?

Bitcoin Exchange
Modern Monetary Theory (MMT) vs BTC to be the Main Event of 2020

AnTy

Sputnik — Bitcoin Tumbles 15%, Mirroring Slumps of Global Markets

So much for safe haven.

Sputnik International
Bitcoin Tumbles 15%, Mirroring Slumps of Global Markets

Izabella Kaminska — BIS trolls bitcoin

Izzy summarizes how BIS explains Bitcoin is a Ponzi scheme.

FT Alphaville
BIS trolls bitcoin
Izabella Kaminska

FRED Blog — Alternative money for transactions : What if gold or Bitcoin replaced the dollar

What if U.S. retail prices were not denominated in U.S. dollars, but instead were denominated in gold or Bitcoin? Paying for a loaf of bread with gold wouldn’t be very practical, as you’d need a very small speck of the precious metal. But one can imagine a system of gold substitutes, such as notes giving you ownership of a fraction of an ounce of gold, thereby overcoming the small-change problem. With Bitcoin, it’d be much easier, as a virtual currency can be divided any way you want.

Now, let’s look at actual prices. FRED doesn’t have price data on just a loaf of bread, but it does have the consumer price index for cereals and bakery products, so let’s use that. The blue line shows the evolution of the U.S. dollar price of a basket of baked goods. The red line shows the price in gold, and the green line shows the price in Bitcoin. It’s apparent that the dollar price is much more stable and has slowly increased over time. The gold price has considerable fluctuations from month to month. While the gold price seems to have a tendency to decrease, this isn’t always true, which you can see if you enlarge the sample window. As for Bitcoin, the fluctuations are extreme, even when you restrict the sample period to the past year.

What’s behind the differences? The Fed’s mandate is to stabilize prices as expressed in U.S. dollars, and this is quite apparent in this graph. The Fed does this by adapting to changes in the demand for dollars. That isn’t possible with gold, as its supply is determined by worldwide mining success, which is outside of the control of any institution. The same applies to Bitcoin, with the additional constraint that mining success keeps dwindling....

FRED Blog — FRB St. Louis
Alternative money for transactions : What if gold or Bitcoin replaced the dollar

See also

Noahpinion (2 March 2013)
Blogger smackdown: Robert Waldmann vs. David Glasner

Noah Smith

Bill Black — Bitcoin Frauds Keep Growing

One of the prime myths that white-collar criminologists have to refute repeatedly is that blockchain makes fraud impossible. Blockchain, in some settings, is a costly means of making some frauds much more difficult. Blockchain is useless against the most important frauds. The primitive worship of blockchain as a supposed garlic capable of warding off evil breeds complacency, and complacency produces increased fraud and greatly extends the life of fraud.…

Sheriff Bill is on the case.

New Economic Perspectives

Bitcoin Frauds Keep Growing

William K. Black | Associate Professor of Economics and Law, UMKC

Jonah Ho — TheBitcoin Fallacy-Back to the Gold Standard

MMT.

Makes Mogul
TheBitcoin Fallacy-Back to the Gold Standard
Jonah Ho

John Quiggin — Bitcoin kills the efficient market hypothesis

If Bitcoins are indeed worthless, then financial markets should price them at zero. But the introduction of futures trading actually boosted the price in the short run. Even after recent declines, there’s no sign that prices will reach zero any time soon.

On the other hand, if Bitcoins are valuable simply because people value them, then asset prices are entirely arbitrary. The same argument can be applied to any financial asset.

John Quiggin's Blog
Bitcoin kills the efficient market hypothesis
John Quiggin | Professor and an Australian Research Council Laureate Fellow at the University of Queensland, and a member of the Board of the Climate Change Authority of the Australian Government

Timothy B. Lee — Bitcoin has a huge scaling problem—Lightning could be the solution

Three startups are getting ready to launch one of the most ambitious and important cryptocurrency experiments since the creation of bitcoin itself. Called Lightning, the project aims to build a fast, scalable, and cryptographically secure payment network layered on top of the existing bitcoin network.

Essentially, Lightning aims to solve the big problem that has loomed over bitcoin in recent years: Satoshi Nakamoto's design for bitcoin is comically unscalable. It requires every full node in bitcoin's peer-to-peer network to receive and store a copy of every transaction ever made on the network.

Initially, that design was vital to achieving Nakamoto's vision of a fully decentralized payment network. But as Purdue computer scientist Pedro Moreno-Sanchez told Ars, it creates a big challenge as the network becomes more popular. "We have reached a point where it's not suitable any more to keep growing," he said.…

A big hurdle in innovation is scalability. It's also fundamental to evolutionary theory. A lot of potentially good solutions fail because they are not scalable or as scalable as other solutions.

As an aside, neoliberal globalization is running into a scalability problem that its advocates are determined to overcome by force if necessary. That is increasingly the case as resistance rises from traditionalism

Ars Technica 

Bitcoin has a huge scaling problem—Lightning could be the solution
Timothy B. Lee

Clint Ballinger — When Bitcoin goes to Zero, Don’t Blame Regulation

After bitcoin goes to (essentially) zero (since it is global, even a few oddballs can prop up its value for years at some low level, like hobbyists do for all kinds of things), which it will, some will say that it was regulation that killed it, not, as I explain, because crypto is worthless because it is not part of a balance sheet and as such has no inherent value to extinguish debt.

To be clear: That bitcoin can’t withstand being treated as any other ordinary good yet does not deserve special tax-free treatment is part of the theory though. You don’t get to declare “I’m a currency! I deserve special treatment!” and not pay taxes. Governments maintain the value of their currency through taxation (taxes drive currency). Money is a public good we all support for our mutual benefit.

You can’t just invent some new token (even if something new and shiny like blockchain & crypto) and declare it a special good that can be traded tax free. Yet taxing a self-declared “currency” guarantees its failure as it will not make sense for individuals to move into it if they are going to be taxed in real money for transactions in it.

Clint Ballinger

When Bitcoin goes to Zero, Don’t Blame Regulation

See also

New Economic Perspectives
The Fair Price of a Bitcoin is Zero

Eric Tymoigne | Associate Professor of Economics at Lewis and Clark College, Portland, Oregon; and Research Associate at the Levy Economics Institute of Bard College

Crossposted at Business Insider

Also

Futurism
The Real Price of Bitcoin? According to Morgan Stanley, It’s Zero

Aylin Woodward

Also

Ian Welsh
Do NOT Use Bitcoin Assuming It Is Anonymous

Also

Uneasy Money
Noah Smith on Bitcoins: A Failure with a Golden Future
David Glasner | Economist at the Federal Trade Commission

Does cryptocurrency remind you Beanie Babies?

Since Trump's election, US dollar has eroded badly

Trump has been bragging about the stock market's gains, but what we don't hear about is the fact that the US dollar has eroded badly. Since his election the dollar has fallen to a 3-year low.

Trump is destroying the US dollar.

I called this at the time of the election and I said it was based, at the time, on two things. 1) Trump's  proposed expansion of fiscal stimulus. (More spending and tax cuts.) And, 2) the ongoing rate hike campaign of the Fed, which is inflationary and therefore NOT bullish for the dollar contrary to what most people believe.

Since then a new and far more corrosive element has entered the picture and that is the Trump Administration's aggressive use of sanctions. This is what I have called the "weaponization" of the US dollar.

This has set in motion an irreversible trend of "de-dollarization." The Rest of the World has no other choice. The USA's use of sanctions designed to limit or completely shut entities or entire nations out of the global, dollar-based transaction and clearing system is too great a risk. Even US allies can be indirectly affected by the sanctions' policy.

Alternatives will be sought. We see this in the rise of new, bilateral trade and clearing arrangements (Russia-China, China oil trading in yuan, etc.) We also see this in rise of Bitcoin and other cryptocurrencies, which I believe, reflects this trend toward de-dollarization and it will continue.

Trump will go down as having presided over the greatest period of dollar depreciation in history. Watch.

Alex Christoforou — De-dollarization and the rise of Bitcoin. Is there a connection between the two?

Is Bitcoin a Reaction to US Dollar Hegemony?

Like Mike has been saying for some time.

The Duran
De-dollarization and the rise of Bitcoin. Is there a connection between the two?
Alex Christoforou

Related

Blockchain technology and the birth of the so-called cryptocurrencies finds deep roots in three contributing factors: the advance of technology: the manipulation of global economic and financial rules; and the persistent attempt to weaken the national economies of countries that geopolitically challenge the US power system. In this first article I address these issues from a financial point of view, in the next analysis I intend to dive into the geopolitical aspects and broader the perspective on how Russia, China and other nations are taking advantage of a decentralized financial system.

Strategic Culture Foundation
Is Bitcoin a Reaction to US Dollar Hegemony?Federico Pieraccini

See also

The iron fist of the US.

As the launch of new ‘petro’ cryptocurrency draws near, a US government agency declared that this newcomer to the digital financial market may represent a violation of sanctions imposed against Venezuela, its issuer.

Sputnik International
US Treasury Warns About Sanction Risks of Owning New Venezuelan Cryptocurrency

Brian Romanchuk — Bitcoin Valuation Series

This article concludes a three-part series:

Bitcoin Valuation I: The Wrong Answers

Bitcoin Valuation II(1): What Might Work

Bond Economics
Bitcoin Valuation Part II(b): What Might Work
Brian Romanchuk

Brian Romanchuk — Bitcoin Valuation Part I: The Wrong Answers

The rise of Bitcoin (and other crypto-currencies) appears that it will have a negative net effect for most law-abiding citizens, but it has provided us with a rather wonderful teaching opportunity. It underlines the weaknesses of existing analytical techniques. (I discussed Bitcoin in a previous article, but I used it to take a sideswipe at DSGE models, and I didn't bother giving the correct answer.)

Due to article length, this article will discuss incorrect valuation techniques. Part II will give the correct methodology....

Bond Economics
Bitcoin Valuation Part I: The Wrong Answers
Brian Romanchuk

Clint Ballinger — Of Bitcoins and Balance Sheets: The Real Lesson From Bitcoin

From an MMT perspective.

Clint Ballinger
Of Bitcoins and Balance Sheets: The Real Lesson From Bitcoin

John Aziz — Bitcoin Is Failing As Money—But Bitcoin Cash Isn’t

There's a huge amount being written about Bitcoin, cryptocurrency, and blockchain with the focus on Bitcoin volatility. so I am going to be selective in posting. John Aziz is a good analyst and MMT-friendly. He sorts through some of the complication.

azizonomics

Bitcoin Is Failing As Money—But Bitcoin Cash Isn’t
John Aziz