[HN Gopher] Is this the end of crypto?
___________________________________________________________________
Is this the end of crypto?
Author : edward
Score : 136 points
Date : 2022-11-17 16:31 UTC (6 hours ago)
(HTM) web link (www.economist.com)
(TXT) w3m dump (www.economist.com)
| Animats wrote:
| China has shut down every crypto asset activity in China that
| they can find.[1] The hammer came down in 2021. Mining farms had
| their power cut, and several hundred people were arrested.
| (There's a "digital yuan", but that's a payment system run by the
| People's Bank of China.) So a big part of the world has already
| ended crypto as an asset class.
|
| [1] https://coinpedia.org/cryptocurrency-
| regulation/cryptocurren...
| hellotomyrars wrote:
| I think this is a major contributing factor in why crypto isn't
| going to work.
| web3isgoing wrote:
| I can't think of anything else that China is attempting to
| restrict that the rest of the developed world is open to.
|
| Edit: perhaps need a /s tag here.
| lend000 wrote:
| Being an Uyghur? Freedom of speech? Encryption? The
| coronavirus (still)?
| j0hnyl wrote:
| I believe that was sarcasm.
| Taylor_OD wrote:
| Isnt this just one of those headlines that isnt really true
| though? Like that China banned video games for kids?
|
| From the same comic sansesk article you posted:
|
| "Even though crypto-mining cracked down in China many miners
| have come out with several ways to continue the operations and
| escape detection. Twenty percent of the bitcoin network remains
| in China according to experts' report."
|
| Doesnt exactly seem like they have ended crypto if 20% of the
| bitcoin network remains there. It sounds like they cracked down
| on some and let others keep running.
| Animats wrote:
| It's not clear that the mining is still in China. It may look
| like mining is in China based on where new Bitcoins enter the
| network, but the mining farm may be elsewhere with the
| control hub still in China. Or the mining may have moved to
| other provinces. The big crackdown was at the provincial
| level, where the electrical load was substantial.
|
| [1] https://www.cnbc.com/2022/05/18/china-is-second-biggest-
| bitc...
| karaterobot wrote:
| I'm not convinced by this without some additional context.
|
| China has banned a lot of things that continue to exist outside
| China. For example, gambling is officially banned in China. Yet
| we wouldn't predict the end of gambling worldwide as a result,
| since we don't think of gambling as being dependent on China.
| Is there reason to believe cryptocurrency is?
| zeruch wrote:
| No.
| mig39 wrote:
| No.
|
| https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headline...
|
| "Any headline that ends in a question mark can be answered by the
| word no."
| g42gregory wrote:
| Very interesting. When people begin to ask questions like "Is
| this the end of X?", is it the time to buy X? Are we at the
| crypto's bottom yet? The equity market does not seem to have
| fallen through yet, and I fear that it may affect crypto (and
| everything else) further. Any thoughts?
| rafaelero wrote:
| Bitcoin won't die. Crypto will, and hopefully soon. The community
| here is so oblivious to the characteristics that make Bitcoin the
| best monetary system we could have invented that I can only
| believe people haven't really thought things through. That's why
| we see these comparisons with Bitcoin and other cryptos. I am
| actually glad all this mess is happening so we can finally move
| on with all those crypto scams that want to confuse people by
| walking in the shadow of the true innovation.
| boring_twenties wrote:
| Bitcoin has been obsolete since 2014 -- Monero is superior in
| every single way.
| drchopchop wrote:
| A blockchain that can barely manage seven transactions per
| second is the "best monetary system we could have invented"?
| rafaelero wrote:
| Fedwire manages similar amount per second, yet it is the
| basis of the current monetary system. Can you use your head
| to think why and how?
| benlivengood wrote:
| I am always curious when I hear sentiments like this. Why is
| BCH better than BTC as a monetary system? Is it the historical
| choice of larger block sizes to support currency transactions
| or the relative stability in USD compared to BTC?
| ganksalot wrote:
| > The community here is so oblivious to the characteristics
| that make Bitcoin the best monetary system we could have
| invented that I can only believe people haven't really thought
| things through.
|
| is this satire?
| DJBunnies wrote:
| No, it's true, this place has a difficult time seeing nuance
| between bitcoin and crypto.
| Balgair wrote:
| Ok, I'll bite.
|
| Give me the elevator pitch. I'm not in tech [0] so treat me
| as you would a grandmother. Average speaking speed is ~150
| words/minute. Say the average elevator ride is ~30 seconds.
| So, in ~75 words, tell me what the nuance is as you would
| say to a grandmother? That fair?
|
| To be clear, I'm honestly not trying to be snarky. Sorry if
| it comes off that way. I can only multitask through this
| meeting so well.
|
| [0] I'm in biotech, so I can hang with you all and be a
| hacky programmer, but most in depth discussion go over my
| head.
| rafaelero wrote:
| Let me try.
|
| If you were to create the best monetary system, how would
| it be? The answer to that is a system with a policy that
| simply doesn't change. That's the best system because
| predictability is the only quality that matters when you
| are storing value. The best governments in the world try
| their best to achieve that, but they always fail. How
| then can we achieve that? With decentralization. That's a
| very expensive, inefficient and slow way to go about
| things. But it is all that matters if we want to build a
| sane monetary system, which doesn't allow anyone to
| change its emission rate. No "crypto" achieves that same
| trust we all have about the decentralized quality of
| Bitcoin. That's why they don't matter.
| Balgair wrote:
| thanks!
| mjburgess wrote:
| This is just such an awful betrayal of their mission. The
| Economist _should_ know better, and everyone I have spoken to
| which is senior in their readership _does_ know better. This is
| still a pro-crypto-scam article.
|
| They repeat the same scam-artist lies, crypto is somehow an
| innovation in "trust", somehow more "efficient" than existing
| infrastructure, somehow "smart contracts" are more reliable than
| actual contracts. Things "become possible".
|
| How can an article like this, at the moment the Emporer's clothes
| start to fall off, be written? _By the economist_.
|
| It is just as-if homeopathy falls away and The Lancest is still
| interested in "innovations in water science"! This is, in my
| view, genuinely unconscionable.
|
| The problems blockchains solves are highly academic csci issues
| around "trust" and "programming" in absurdly distributed systems.
| They have nothing to do with trust, risk, contracts, ownership or
| rights in anything like an economic, political or moral sense.
|
| Repeating these lies _now_ is such an awful betrayal of their
| obligations to their readers. They should be the ones informing
| the public on the actual economic meaning of these terms, and not
| participating in trying to keep the flame of these pyramid
| schemes alive.
|
| EDIT: since the article is paywalled, consider the following
| quote:
|
| > Amid the wreckage of the past week, it is worth remembering the
| technology's underlying potential. Conventional banking requires
| a vast infrastructure to maintain trust between strangers. This
| is expensive and is often captured by insiders who take a cut.
| Public blockchains, by contrast, are built on a network of
| computers, making their transactions transparent and, in theory,
| trustworthy. Interoperable, open-source functions can be built on
| top of them, including self-executing smart contracts that are
| guaranteed to function as written. A system of tokens, and rules
| governing them, can collectively offer a clever way to
| incentivise open-source contributors. And arrangements that would
| be expensive or impractical to enforce in the real world become
| possible--allowing artists to retain a stake in the profits from
| the resale of their digital works, for instance.
|
| For this to appear in a serious article on crypto outside of the
| scamming community is outrageous. The economist here is repeating
| a fraud.
| olalonde wrote:
| I'm sorry but no one in their right mind will come away from
| this article thinking that this is a "pro-crypto-scam" article.
| The article is actually very critical.
|
| > The problems blockchains solves are highly academic csci
| issues around "trust" and "programming" in absurdly distributed
| systems. They have nothing to do with trust, risk, contracts,
| ownership or rights in anything like an economic, political or
| moral sense.
|
| It's hard to understand what you mean here. The whole
| innovation behind Bitcoin is to eliminate the need for trust in
| a centralized entity. This is not controversial at all and
| claiming otherwise, or even worse, that it's a "lie", deserves
| some elaboration...
| efficax wrote:
| imagine you have a smart contract that says A promises to pay
| B X when they complete task Y. If task Y is not representable
| on-chain, how do you execute the contract? How do you certify
| that the thing Y was done exactly as expected? There are very
| few meaningful things that you could slot in for Y that would
| not require some kind of out-of-chain verification. Say B
| says I did Y and A says, sorry, you didn't. How does B get
| their money, etc. They need courts, notaries, trusted
| fiduciaries. At which point, why did you have a smart
| contract anyway?
| mjburgess wrote:
| > The whole innovation behind Bitcoin is to eliminate the
| need for trust in a centralized entity
|
| Err, nope. That's the scam.
|
| A blockchain is a kind of database which requires no single
| machine to be nominated as the single-source-of-truth. _that
| 's it_.
|
| This has nothing to do with centralisation, power, trust, or
| anything of that kind.
|
| The sense of "centralisation" in blockchain means computer
| network centralisation, as in how one connects databases. And
| "trust" in the sense that entries in that database are
| "reliable" in some academic sense.
|
| This has absolutely nothing to do with eliminating the need
| for "trust in centralised entities" -- such a claim is not
| only absurd, but the premise of a scam. A scam which
| continues to be perpetrated. And this article participates.
| olalonde wrote:
| If "eliminating the need for trust in centralised entities"
| is an absurd claim and a lie, then it follows that there
| exists a centralized entity you need to trust to use
| Bitcoin. What is that centralized entity?
|
| PS: When people say that Bitcoin is decentralized, they
| also mean it in the colloquial sense, not only in the CS
| academic jargon. Entities like PayPal or the Federal
| Reserve Bank are centralized and require trust. They have
| to be run by trusted people. In contrast, Bitcoin isn't run
| by anyone. It is governed by a protocol which is mostly set
| in stone. No centralized party can suddenly decide to
| "print" more Bitcoin or freeze accounts. This is what
| people mean.
| mjburgess wrote:
| No, that doesnt follow.
|
| But in any case, what is "using" bitcoin?
|
| Is it purchasing bitcoin? ...how do I do that? I'd need
| to rely on the two mining companies, right? And the
| exchanges? Or not?
|
| And can I use bitcoin as currency in any shop? No? If I
| could, I'd be relying on the state to provide the same
| rights behind all economic transactions to enable, that
| right?
|
| And what happens if the handful of "wales" decide to off-
| load their coins in the middle of my negotiation when I'm
| buying my tesla... suddenly, all my deflationary currency
| has been magically radically inflated by a cabal of SV
| billionaires.
|
| Money isnt the kind of thing that "centralisation" even
| applies to in any coherent sense. If BTC is suppose to be
| money, then it's supposed to be a system for book-keeping
| aggregate promises across the global collective of human
| beings.
|
| The value of money, it's "use" in any sense, is subject
| to provision of economic systems by central authorities,
| and subject to wild forces of decentralisation and
| centralisation.
|
| The networking sense of "centralisation" which applies to
| blockchain is _a pun_. It 's irrelevant. It has nothing
| to do with any of this. It could be called, "wide-
| broadcast machine signalling"
| olalonde wrote:
| > But in any case, what is "using" bitcoin?
|
| > Is it purchasing bitcoin? ...how do I do that? I'd need
| to rely on the two mining companies, right? And the
| exchanges? Or not?
|
| Transacting on the Bitcoin network: sending BTC from one
| party to another. There are more than two mining
| companies, otherwise Bitcoin's security model fails (see
| 51% attack). Of course, centralized exchanges are...
| centralized.
|
| > And can I use bitcoin as currency in any shop? No? If I
| could, I'd be relying on the state to provide the same
| rights behind all economic transactions to enable, that
| right?
|
| When people say that Bitcoin doesn't require trust, they
| don't mean that nothing requires trust anymore. They just
| mean that they don't have to trust a centralized party to
| run the Bitcoin network, because there is no such entity.
|
| Beyond that, you indeed still need to trust the people
| you transact with or trust that you will be able to sue
| them if they scam you, etc.
|
| > And what happens if the handful of "wales" decide to
| off-load their coins in the middle of my negotiation when
| I'm buying my tesla... suddenly, all my deflationary
| currency has been magically radically inflated by a cabal
| of SV billionaires.
|
| Yes.
|
| > Money isnt the kind of thing that "centralisation" even
| applies to in any coherent sense.
|
| Yes it is. Even before Bitcoin, (de)centralization was
| used to contrast fiat money vs commodity money.
|
| > The value of money, it's "use" in any sense, is subject
| to provision of economic systems by central authorities,
| and subject to wild forces of decentralisation and
| centralisation.
|
| Yes. There is a risk that the use of Bitcoin could be
| outlawed by some governments, although it would be
| difficult to enforce in practice.
| mjburgess wrote:
| We are largely in agreement as you concede my points. But
| you want to retain this word as applied, eg., to bitcoin.
|
| The sound of rain falling is neither "centralised" nor
| "decentralised". It isnt the kind of thing which could be
| either *in the relevant sense of the word*.
|
| When we talk about centralisation in economics and
| politics we arent talking about where databases are.
|
| Bitcoin is as centralised *a system* as any which exist,
| and much much more so than paper money.
|
| This idea that you can send a signal betweeen two
| machines you own and make some changes to your wallet is
| a gross misdirection.
|
| That has nothing to do with any of the value props of
| crypto. It has no economic or political meaning. It's
| purely a technical property of the technology.
| olalonde wrote:
| > We are largely in agreement as you concede my points.
|
| Concede would mean that I changed my mind. I didn't. You
| said some true things but which are irrelevant to your
| original claim.
|
| > When we talk about centralisation in economics and
| politics we arent talking about where databases are.
|
| Perfectly agree (as I thought I had made abundantly clear
| in my previous comments). I'm sure for example that
| Paypal has databases all over the world and yet it is not
| "decentralized" in this context (in the
| economical/political sense).
|
| Centralization in this context refers to who is in
| charge. A centralized economy is one that is managed by
| centralized planners. A _central_ bank has central
| bankers in control. Paypal has executives in control.
| There is no centralized entity that controls Bitcoin.
| mjburgess wrote:
| Central banks only "control" money in the sense that they
| have been granted the exclusive monopoly by the state to
| provide banks with it (and so on).
|
| The state has not taken any view, yet, on who should have
| such a monopoly on crypto; but they can. Defacto
| monopolies exist in the form of the two mining companies.
|
| This is all extrinsic to crypto.
|
| Likewise, literally printing paper money is
| "decentralised". There's nothing about the present
| technology of "fiat" money any more or less
| "decentralised".
|
| What you're talking about is how the state grants
| monopolies. And, as far as that's concerned, crypto will
| not fair well in that regard -- not at all!
| olalonde wrote:
| I see you've reduced your position from "Bitcoin is a
| scam" to "Bitcoin has some potential vulnerabilities".
|
| The 51% attack vulnerability is a well-known risk. It was
| described in Satoshi Nakamoto's white paper. In practice,
| it is highly unlikely due to many reasons which I won't
| elaborate here but I there's a lot of material about it
| online.
|
| As long as there is more than one government, no one
| government can take control over Bitcoin. They can
| possibly outlaw its use within their own borders (with
| difficulty).
| AtlasBarfed wrote:
| The Economist represents a world viewpoint from the days of the
| United Kingdom: as in a small island nation with a monarchy
| exerting centralized economic control over a vast worldwide
| imperial empire.
|
| Why would they like cryptocurrency in any way, unless the Bank
| of England had monopolistic control over it?
| mjburgess wrote:
| You've misread my comment.
|
| I'm angry that they're repeating pro-cypto ideology. If you
| read the article, they do not want gov control. They want the
| scams to play out.
|
| I expect better from the economist. It shares a readership
| with the FT, and the FT has not fallen victim to this
| hysteria.
| logicalmonster wrote:
| > They repeat the same scam-artist lies, crypto is somehow an
| innovation in "trust", somehow more "efficient" than existing
| infrastructure, somehow "smart contracts" are more reliable
| than actual contracts. Things "become possible".
|
| I can't read the article through the paywall to read any
| clarification on these points, but some of what you mentioned
| in that list above is arguably true.
|
| * Say what you will about crypto, but it is an unbelievable
| accounting invention and innovation in trust. Crypto the
| technology is distinct from centralized exchanges.
|
| * In terms of electricity usage and transaction speed, most
| crypto might not be very efficient (yet), but what efficiency
| are they talking about? If crypto-adoption can replace many
| bankers and finance employees because the network automatically
| does a lot of their day-to-day tasks, then there's an argument
| that crypto is highly efficient in some areas.
|
| * Are smart contracts more reliable than traditional contracts?
| Well, that's highly debatable: you have the existing legal
| system that can sometimes be used to enforce contracts, but not
| always. But if the conditions of a smart contract are met,
| there's probably no conceivable force on Earth short of either
| a gargantuan cyberattack or the electricity going down network-
| wide that can stop it from executing. Sure, you might argue
| that smart contracts have numerous potential flaws (unreliable
| data, bugs in the contract, no possibility of rollback, etc)
| but there are good counterpoints, improvements in these areas,
| and some similar flaws in existing contracts. For instance:
| people intentionally cheat on traditional contracts all of the
| time and just dare others to sue: that's much harder with smart
| contracts that automatically execute once the agreed upon
| conditions are met.
| Laaas wrote:
| The mainstream response to this debacle is a bit
| incomprehensible.
|
| FTX was the antithesis of cryptocurrency; it was a centralised
| exchange, that was also trying to become a bank, and was AFAICT
| trying to kill DeFi [0].
|
| The failure/success of FTX has no relation to the soundness of
| cryptocurrency. I do however hope that this crash means fewer
| people will speculate on the prices such that it can finally
| stabilise a bit (and be useful without using stablecoins).
|
| [0] https://www.coindesk.com/policy/2022/11/15/the-sbf-bill-
| what...
| jahewson wrote:
| Cryptocurrency is the antithesis of cryptocurrency.
| Victerius wrote:
| > FTX was the antithesis of cryptocurrency
|
| No true scotsman. "The USSR wasn't real communism."
|
| What cryptocurrency could be or should be in an ideal world is
| irrelevant. If cryptocurrency fails to live up to its ideals,
| it may be because these ideals are impossible to fulfill. That
| could be due to technological limitations, human nature, or
| something else. And in this case, we have no choice but to
| judge crypto for what it looks like in the world of today.
|
| What matters is what cryptocurrency looks like in practice. And
| that is FTX, Mt Gox, Three Arrows, and others.
|
| Crypto isn't sound enough to have mass adoption.
|
| The USSR was real communism. And FTX is crypto principles at
| work.
| whatwherewhy wrote:
| I'm a user of Bitcoin and I never used any exchange.
| legitster wrote:
| Okay, pray tell, how do you buy bitcoin?
| whatwherewhy wrote:
| From people around me, in person.
| chrstphrknwtn wrote:
| Ah, that settles it then.
| frereubu wrote:
| That's irrelevant to the comment you're responding to. The
| point is that there may be people who use it rationally,
| but how it works in the real world now that it's leaking
| out beyond its initial user base is getting really
| problematic.
| whatwherewhy wrote:
| It works in real world without any exchanges. All of them
| could crash and burn and Bitcoin would continue on.
| Victerius wrote:
| Sure, for the 2,000 people who use it without exchanges.
| (made up number)
| colesantiago wrote:
| So when are you going to sell your Bitcoin when it goes to
| $5K or more realistically less than $5K?
| whatwherewhy wrote:
| I don't hold Bitcoin. I use it for cross-continent
| transactions.
| Victerius wrote:
| Why do you need to send money across continents?
| whatwherewhy wrote:
| I pay for software engineering work done in Africa and
| sometimes South-East Asia.
| colesantiago wrote:
| You do realise this is nothing new and you can use
| TransferWise, MPesa or PayTM for this right?
|
| Bitcoin is slower than all this and violently fluctuates
| which loses people's money quickly. People also need to
| pay their bills in fiat anyway so whoever is receiving
| the Bitcoin needs to cash out to fiat anyway.
|
| At that point you might as well just use fiat instead.
| whatwherewhy wrote:
| All of these options you listed are significantly more
| expensive, and some of the contractors I work with don't
| even have that option due to KYC requirements - these
| people don't have access to functioning governments, they
| don't have passports. Also, most of my contractors don't
| use/have bank accounts (because where they live it costs
| money to have one) - so no way to take out the money if
| they used these services.
|
| I did this dance at least 100 times and never ever had a
| problem with price fluctuation. Bitcoin is pretty stable
| on a 3-day timeframe.
| certifiedloud wrote:
| Genuine question: How do you use it? Do you mean you use it
| to make purchases, or do you mean you hold it as a store of
| value, and that's the use? Something else?
| whatwherewhy wrote:
| I don't hold Bitcoin. I use it for cross-continent
| transactions. I buy it from people in my city using a
| local FB group or (way in the past) Localbitcoins.com and
| then send it to the recipient. They usually use
| Localbitcoins to convert it to their own currency AFAIK.
| The fees (transfer and exchange) are much lower this way
| - usually less than 0.5% all things considered. Compared
| to $100+ fee to just transfer the money + 5-10% currency
| exchange fee (both my and the recipient's currency aren't
| the most well known).
| lupire wrote:
| To get that rate, how much do you have to send in one
| batch?
|
| Just obtaining Bitcoin is expensive unless you have a
| high trust off-chain method to prevent double-spending.
| whatwherewhy wrote:
| I'm usually sending around $500-$1000 once every 2-3
| months (per contractor - I work with multiple).
| certifiedloud wrote:
| How long does it take for a typical transaction to
| finalize?
| whatwherewhy wrote:
| 2 days - I get the BTC around noon, transfer it
| immediately, in the evening I get a confirmation from the
| recipient that they got it, and then I see them transfer
| it to someone the second day. Sometimes it's just 1 day.
| pa7x1 wrote:
| I get the point and I can understand how it can feel like
| that from the outside. But the same people that are saying
| that FTX is not crypto now, were saying it before and same
| applies to Coinbase, Kraken, Binance... Luna and Terra were
| crypto, though, economically unsound design with Ponzi
| economics but crypto. And the litmus test is actually super
| simple and foolproof. Does whatever you are doing settle a
| transaction in a public, tamper-resistant ledger that is
| cryptographically verifiable? FTX business and operations
| does not involve such a thing. It's a traditional
| corporation, established in the Bahamas, running some
| SQL/noSQL DB or perhaps more likely paper napkins as a system
| of record... And as such was vulnerable to the same kind of
| abuses that have plagued financial fraud forever.
|
| Here is actual projects that are implemented in a blockchain:
|
| - A exchange, e.g. Uniswap: https://uniswap.org/
|
| Here is a smart contract that executes its transactions: http
| s://etherscan.io/address/0x68b3465833fb72a70ecdf485e0e4c...
|
| You can see the transactions live. You can see the code that
| runs this exchange: https://etherscan.io/address/0x68b3465833
| fb72a70ecdf485e0e4c...
|
| - Lending and borrowing, e.g. Aave: https://aave.com/
|
| - Decentralized staking, e.g. RocketPool:
| https://rocketpool.net ...
|
| Nothing of this has failed. It's working 24/7 without
| maintenance windows. Everything is on-chain, publicly
| verifiable, automated and involves no humans.
| rhn_mk1 wrote:
| This is a silly criticism, as long as the concepts of
| "cryptocurrency as a decentralized idea" and "cryptocurrency
| as many people use it in practice" are described by a single
| word.
|
| If the article is correct about "practicurrency", then you're
| responding to someone saying that it won't affect
| "decencurrency". One of them is indeed not a Scotsman. All
| you're saying is that the word has more than one definition
| for two wildly different things.
| Victerius wrote:
| It is impossible for a monetary system to be decentralized,
| safe, and have mass adoption. Because security requires
| either inconvenience or centralization, and inconvenience
| is a hard barrier to mass adoption.
| redox99 wrote:
| It's not "no true scotsman".
|
| People here did not own any crypto. It's a simple fact, not
| some nebulous idea of what is or isn't communism. People gave
| money to fraudsters, who said "give us money and we'll hold
| crypto on your behalf", but FTX didn't actually have that
| crypto. They just ran with the money.
| godzillabrennus wrote:
| I love the irrational optimism you have for this solution in
| search of a problem.
| tyree731 wrote:
| Soundness of the technology? No. People's willingness to use
| it? Absolutely.
| [deleted]
| jmull wrote:
| > FTX was the antithesis of cryptocurrency
|
| Not really.
|
| The narrative around crypto sells the _idea_ of
| decentralization but doesn 't deliver.
|
| (1) Put money into anything and people will show up to try to
| get as much as they can. That is: _money is a centralizing
| force_.
|
| (2) Crypto, the technology, doesn't have a mechanism in place
| to resist centralization -- one person or entity can own as
| much as they can get their hands on.
|
| Just (1) and (2) means centralization is built-in to crypto.
|
| There are some accelerants too, though:
|
| (3) Crypto resists regulation. What people think of as the
| decentralized nature of crypto is actually about resisting
| intervention by external parties. Obviously, that can be good,
| but also lets people buy, sell, trade, borrow, accumulate
| crypto without limits.
|
| (4) Crypto is confusing. I think this lets people believe the
| things about crypto they want to believe, leading the the
| wildly optimistic narratives around it.
|
| As long as there is money in crypto, you will see the same
| thing keep happening: money goes in, crypto moves around, for a
| while everything seems to be following the narrative, then,
| suddenly, the money is gone, the crypto is gone or worthless
| and we have some more threads about it on HN.
| jimcavel888 wrote:
| jonathanstrange wrote:
| Can I still have a local crypto wallet on my hard disk that
| contains my bitcoins and transfer coins to it from exchanges or
| when people pay me?
| jimpudar wrote:
| The short answer is yes, but your question implies a
| fundamental misunderstanding of Bitcoin and blockchains. The
| coins do not exist "in your wallet" - the wallet just holds
| your keys that prove you own some of the coins visible to
| everybody on the public blockchain.
|
| If you want a really great learning aid, search for "Island
| of Yap Blockchain" and read any of the million articles about
| it.
| lupire wrote:
| Yes, and a dollar bill in my pocket isn't money, just a
| taxpaying scrip that can be used as an IOU with people who
| are interested in taxpaying scrip.
| kojeovo wrote:
| Aren't basically all of crypto transactions facilitated by
| centralized exchanges? Why is FTX alone the antithesis?
| yieldcrv wrote:
| No, decentralized exchanges have had more volume and
| liquidity than centralized exchanges for 2 years.
| kojeovo wrote:
| Cuz of NFTs?
| yieldcrv wrote:
| Not because of NFTs, people that chose to learn how to
| use crypto natively find it easier, faster and less of a
| hassle, than the people that chose to say these are
| insurmountable barriers to adoption and stick with those
| custodial exchanges
|
| Just like with general computer use, after a certain
| point people can't blame the user experience on their own
| incompetence
| wollsmoth wrote:
| Probably most of the ones exchanging fiat for cryptocurrency.
| But you can use defi if you want to swap crypto for crypto,
| and you can always send direct to buy something, although
| most merchants probably immediately convert to fiat using an
| exchange.
| sschueller wrote:
| No, you can trade crypto on a decentralized exchange like a
| token trading contract on ethereum. You do have the risk of
| bugs in the code or poorly coded contracts with backdoor but
| the code is public.
| kojeovo wrote:
| You can but what % are on those? Less than 1?
| lupire wrote:
| Backdoors aren't poorly coded, they are well coded but
| malicious.
| Nursie wrote:
| It was everything cryptocurrency - flim-flam, inflated values,
| the whole thing being based on hot air, technological pipe-
| dreams and unrealistic ideals.
|
| Like it or not, this is the cryptocurrency ecosystem, and it
| has _everything_ to do with cryptocurrency being an unregulated
| wild west of dodgy finance, scams and fraud. Cryptocurrency has
| enabled this stuff.
|
| You might not like that this is where it's gone, but it is a
| direct consequence of the ideals of unregulated 'money'. The
| scammers and the chancers move in, because why wouldn't they?
| Create a system that is resistant to regulation and open to so
| much exploitation and they will exploit.
|
| The problem with hoping for stable valuations is that very,
| very few people are interested in that, because they can't get
| rich off it. I too hope that all of this crap dies and
| cryptocurrency goes back to being a handful of cypherpunks
| swapping tokens around, because at that point the great ripoff
| and fraud on the general public will have come to an end.
|
| Let's regulate all this the fuck out of existence. Sounds like
| everyone will be happy.
| lupire wrote:
| To be clear, Bitcoin was never meant as _unregulated_ money,
| it was meant as an _non-manipulatable supply_ of money.
| Nothing in Bitcoin is incompatible with government regulation
| of your computers or behavior.
| ren_engineer wrote:
| awfully convenient how SBF was highly connected to the current
| leaders of the Federal Reserve and SEC and all this went down
| right as they are pushing for a Central Bank backed digital
| currency and gives them the perfect excuse to try and kill off
| actual crypto
|
| thesis-antithesis-synthesis
| jjgreen wrote:
| This place needs more dialectics
| lupire wrote:
| Now do Terra/Luna and every other crypto project that imloded
| the same way. It's not a conspiracy if everyone around the
| world is doing the same thing.
| [deleted]
| mjburgess wrote:
| It is the ray of light which exposes the ideological con taking
| place: trust between machines isnt trust in an economic sense.
| Centralisation of power has nothing to do with computer network
| decentralisation.
|
| The scam here is, at first, ideological. There's a techbro-
| libertarian wordplay taking place which must be exposed. The
| blockchain has nothing to offer "trust", "contracts", "rights",
| "rewards". Nothing.
|
| And _much worse than this_ , it makes all of the existing
| problems with these "in western society" _worse_.
|
| What every single major "crypto" project exposes is the radical
| disconnect between building functioning social economic
| institutions and programming "on the chain".
|
| ie., what their collapse shows is that the emporer has no
| clothes.
|
| When this sinks in, that all we were ever talking about is a
| stupid append-only log, *then*, hopefully everything else falls
| away.
|
| As in, the homeopathic vial was only ever water, all along.
| mechanical_bear wrote:
| I think you should get a basic understanding of the
| technology if you are going to comment on it.
| mjburgess wrote:
| Ah! I really don't get the idea of a distributed immutable
| append-only log which is reproduced on all clients and
| whose integrity is cryptographically guaranteed by
| recomputing hashes on each append.
|
| Nor do I understand anything at all about systems of power,
| accountability, the political intuitions of the state and
| the economy. I've no idea how central banks regulate the
| supply of money; i'm totally at a loss as to how trust in
| the ability for people to keep their promises is the
| guarantor of the value of money. I'm bamboozled by
| financial risk, and have no idea how productive economic
| systems create value by taking bets on economically
| productive activity.
|
| Rather, I'm a rube. I've been told that when you plug
| computers together and copy-paste cryptographic ledgers
| then we can get rid of The Fed. So that's what I choose to
| believe.
| mechanical_bear wrote:
| Well, in the end, at least you admit it. -\\_(tsu)_/-
| mjburgess wrote:
| You realise, I'm being sarcastic...
|
| I was playing the part of a crypto-advocate who doesnt
| know any of those things, and so thinks that a database
| is going to solve questions about the design of political
| and economic institutions.
|
| It's a genuinely profoundly misinformed view, exploited
| by scammers. It's so egregiously misformed it's
| popularity is incomprehensible.
|
| It's a lot like those on the far-left who think all world
| problems can be solved by taxing a few billionaires. An
| ideological fantasy.
| mechanical_bear wrote:
| Yes...and you do realize that I was being sarcastic in
| turn? Sheesh. You are not doing yourself any favors.
| pixel_tracing wrote:
| The big issue is that soundness of technology is great and all
| but money at the end of the day depends on social factors and
| practicality (not smart contracts, immutable transactions,
| merkle trees, etc.)
| stephc_int13 wrote:
| This sounds a bit like the "no true scotsman".
| tb_technical wrote:
| No, not really.
|
| But we have to be honest with ourselves. Crypto failed.
|
| It was supposed to allow people to make transactions without
| trusted institutions, and the manipulations of the Federal
| Reserve.
|
| Unfortunately it's been subverted as a security.
| nathias wrote:
| > FTX has dealt a catastrophic blow to crypto's reputation
|
| I've been in crypto since 2013 and people have been insulting
| crypto and everyone in it as scammers, I'm not sure how another
| centralized exchange stealing user funds is any diferent than all
| the past ones.
| legitster wrote:
| > Moreover, sceptics should acknowledge that nobody can predict
| which innovations will bear fruit and which will not. People
| should be free to devote time and money to fusion power,
| airships, the metaverse and a host of other technologies that may
| never come good. Crypto is no different. As the virtual economy
| develops, useful decentralised applications may yet appear--who
| knows? The underlying technology continues to improve.
|
| > Instead of over-regulating or stamping out crypto, regulators
| should be guided by two principles. One is to ensure that theft
| and fraud are minimised, as with any financial activity. The
| other is to keep the mainstream financial system insulated from
| further crypto-ructions.
|
| I know people knock the Economist for pretty superficial
| analysis, but honestly appreciate their level-headed take here.
| mjburgess wrote:
| It's not level-headed. They've started with the classical
| Economist premise: gov regulation bad. Then rather than
| understand or research cypto, they contrast lies told by
| charlatans against an unmentioned "sceptical" reality. They
| then conclude with their premise.
|
| This is an exercise in pure ideology, conveys no information,
| and presents the scam sales-pitch around crypto entirely
| verbatim.
|
| It is that most common of trap that classical liberals fall
| into, defending private forces of unfreedom on the basis that
| they underpin the "free" market. What a bleak picture, and as a
| defender of free markets, a betray of that world view.
|
| Freedom, as a contingent property of markets, is a careful and
| precious thing. It requires us to be on the guard against a
| variety of feudal forces, the pinnace of which could be nothing
| other than crypto.
|
| Here, The Economist, on the basis of classical liberalism,
| advocates for a feudalist scam. It's quite saddening.
| RadixDLT wrote:
| economist, axios, ect. are spreading fud to drive the price down
| cooljacob204 wrote:
| When Crypto was young it was this cool new technology that mostly
| interesting because of the underlying tech. But even back then it
| was mostly valuable for buying drugs online and other illegal
| stuff.
|
| Now it's that and a way to scam people of their life savings. I
| do hope it dies out, it should have been heavily regulated from
| the get go. Way too many people saw these high production
| commercials with their favorite celebrities they trust telling
| them to invest in crypto and lost everything.
|
| It never had a real use outside of scamming people and buying
| illegal shit, no matter how hard others pushed to normalize
| crypto it never happened. And why would it? Everyone was yelling
| at people to hold. Don't spend it, it will go to the moon!
|
| And sure it keeps your money away from the spooky scary
| government. But I prefer my government insured bank account using
| a government managed currency and recourse for any scams/hacks
| that might happen to me.
|
| But I don't think it will ever die. Just like MLMS, pyramid
| schemes and other crap like that.
|
| Also don't even get me started on these centralized exchanges
| where you don't even own your key and have to verify your
| identity (Which is how most users interacted with crypto). It's
| completely counter to the point of crypto.
| camjohnson26 wrote:
| Always relevant: https://99bitcoins.com/bitcoin-obituaries/
| lupire wrote:
| Good government is a luxury many lack.
| 7speter wrote:
| Yet some people still want to drown their pretty good
| government in a tub.
| biohax2015 wrote:
| USD is available to anyone
| whitepoplar wrote:
| Nope
| A4ET8a8uTh0 wrote:
| What exactly do you mean by that, because if you do mean
| American dollar, I can point out multiple parties who
| simply cannot use US currency? Hell, I can point out to
| transactions that are prohibited if they even touch some
| type of activity and are in US dollars.
|
| In other words, could you elaborate?
| TremendousJudge wrote:
| Ask any Argentinian
| djbebs wrote:
| Im sure the russians that just saw hundreds of billions of
| usd frozen would disagree.
| cooljacob204 wrote:
| And that's a fair point. But the problem is Crypto is an
| investment playground by people from rich countries and
| legitimate uses of it in countries like say Venezuela is an
| extremely small part of total transactions.
| pera wrote:
| I'm from Argentina but live in the UK: in 2020 my mom
| needed an urgent oncological treatment and the only method
| I had to transfer the money was using a cryptocurrency. I
| really don't like to talk about this stuff but when people
| here in HN keep making arguments like "oh who needs this
| stuff, I can send money to my friends with the Monzo app"
| it really makes me feel like my problems as someone from
| the third world don't matter at all
| runarberg wrote:
| I think most people here agree that it is unnecessarily
| hard and expensive to transfer money between countries.
| However cryptocurrency is a technological solution to a
| regulatory problem. This issue could be solved tomorrow
| by legislation if governments would cooperate and work to
| do so. All the efforts pushing cryptocurrency for this
| particular niche would be better served pushing for
| international standards for cheap and simple instant
| money transfers.
| vaxintar wrote:
| >This issue could be solved tomorrow by legislation if
| governments would cooperate and work to do so.
|
| Again, many countries around the globe don't have a
| functional government capable of produce such legislation
| _tomorrow_.
| runarberg wrote:
| GP was talking about Argentina and the UK. Both have
| pretty functioning governments, and pretty stable
| relation. This could easily be solved for _most_ people
| today. Even China and India have stable governments that
| pass legislation and adopt international standards. You
| will only find exceptions in places like the USA, Iran
| and Russia. However most people don't live there.
| ls15 wrote:
| > All the efforts pushing cryptocurrency for this
| particular niche would be better served pushing for
| international standards for cheap and simple instant
| money transfers.
|
| That seems impossible given today's geopolitics. Crypto
| remittance at least works.
| runarberg wrote:
| Maybe that is true of transferring money between USA and
| Russia, or between USA and the EU, or the USA and any
| other country outside of Canada and Mexico, but there is
| no reason that the UK and Argentina don't have a
| bilateral agreement in place that would make transferring
| money between the two countries quick, cheap, and easy.
| [deleted]
| Sargos wrote:
| >there is no reason that the UK and Argentina don't have
| a bilateral agreement in place that would make
| transferring money between the two countries quick,
| cheap, and easy.
|
| This may be true but the fact is there is no such
| agreement and therefore the friction remains. Crypto at
| least provides a universal low friction option to
| everyone with no need for disinterested political groups
| to spend precious time to take action.
| mr_woozy wrote:
| devoutsalsa wrote:
| The US dollar is used for shady stuff all over the world,
| but we're not trying to ban it.
| cooljacob204 wrote:
| Yes but it's used by far for more legitimate stuff. I
| would argue crypto outside of investing is not.
|
| Also I don't want to ban crypto. I want to crack down on
| these exchanges which encouraged everyone to gamble on
| crypto and lost a ton of people money.
| aww_dang wrote:
| The market is cracking down on these exchanges by
| bankrupting them. I'd prefer a privately run auditing and
| voluntary accreditation model.
| danans wrote:
| > The US dollar is used for shady stuff all over the
| world, but we're not trying to ban it.
|
| That is because it is overwhelmingly used for standard
| non-shady stuff, like trading legal goods and services.
| Crypto can't make a similar claim.
| aww_dang wrote:
| Use of the US dollar is compulsory. Thankfully,
| cryptocurrencies cannot make the same claim.
|
| https://en.wikipedia.org/wiki/Gresham%27s_law
| TacticalCoder wrote:
| 3% to 5% of the world's GDP is linked to criminal
| activities [1]. Cryptocurrencies are a drop in the bucket
| here. It doesn't even register.
|
| [1] And it's highly likely the CIA is still, in 2022,
| deeply tied in drug trafficking and drug money
| laundering.
| throwup wrote:
| https://papers.ssrn.com/sol3/papers.cfm?abstract_id=39421
| 81
|
| > For example, illegal transactions, scams and gambling
| together make up less than 3% of volume.
| sokoloff wrote:
| What constitutes a "scam" in the that paper? That paper
| treats all USDT (Tether) transactions as "not scam".
|
| I think that remains to be proven and I don't think it's
| anywhere near certain.
| hellotomyrars wrote:
| Tether is arguably itself a scam based on their
| incredibly creative account and likely outright lies
| about the backing of Tether.
| aww_dang wrote:
| Turtles all the way down. The US central bank backs the
| US dollar with "The full faith and credit of the US
| government"
|
| https://www.federalreserve.gov/faqs/currency_12770.htm
| hellotomyrars wrote:
| Sure, totally. But I trust the faith and credit of the US
| government a lot more than the faith and credit of
| Tether.
| danans wrote:
| You excluded the first part of that paragraph:
|
| > We show that the vast majority of Bitcoin transactions
| between real entities are for trading and speculative
| purposes. Starting from 2015, 75% of the real bitcoin
| volume has been linked to exchanges or exchange-like
| entities such as on-line wallets, OTC desks, and large
| institutional traders.
|
| So 75% of the transactions are just speculative trading,
| not transactions for goods or services, which is what is
| being discussed. Taking the paper's numbers at face
| value, as a percentage of non-speculative transactions,
| illicit transactions are 12%, which is quite high.
|
| There are also papers which quantify the amount of
| illegal activity as high as 46% [1] in 2018.
|
| Illicit activity is still probably the most durable use
| non-investment use-case for Bitcoin, and realistically
| will be the most enduring use case going forward.
|
| 1. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=31
| 02645
| throwup wrote:
| Illegal transactions are also 11-12% of the USA's
| economy.[1]
|
| In 2019, forex volume was $6.6T per _day_ [2], or $1716T
| per year. Meanwhile global GDP was only $87.5T [3]. In
| other words, almost 95% of global currency volume is
| speculation. Why would anyone use currencies that are
| mainly used for speculation?
|
| Both the traditional and crypto economies are reflections
| of human behavior, but because crypto is more
| transparent, you can see it for yourself. And a lot of
| people don't like what they see. But it's not a new
| problem nor unique to new currencies or technologies.
|
| [1]:
| https://www.investopedia.com/articles/markets/032916/how-
| big...
|
| [2]: https://www.financemagnates.com/institutional-
| forex/executio...
|
| [3]: https://www.statista.com/statistics/268750/global-
| gross-dome...
| KptMarchewa wrote:
| > Illegal transactions are also 11-12% of the USA's
| economy.[1]
|
| Much of that figure are payments for untaxed, but
| otherwise legal activities. On the other hand, crypto
| figures are straight up payments for illegal activities.
| danans wrote:
| > In other words, almost 95% of global currency volume is
| speculation. Why would anyone use currencies that are
| mainly used for speculation?
|
| Much of that trading volume, speculative or not supports
| the international trade of real goods and services and
| hedges currency risk for large international companies
| [1]. The same cannot be said of Bitcoin, which does
| provide the same utility.
|
| https://www.federalreserve.gov/econres/notes/feds-
| notes/the-...
| psychlops wrote:
| Seems like you will get your wish as the trend is leading
| towards a future where only approved transactions will be
| allowed.
| rsj_hn wrote:
| In some sense, yes the ultimate purpose of a bearer
| currency in the era of government controlled custodial
| currencies is having a currency that the government can't
| seize from you or put prior restraint on you spending.
| Thus by definition, the main use case is "illicit".
|
| But remember that "illicit" also includes sending
| donations to protestors in Canada when the government
| froze their bank accounts, or sending payments to
| dissident organizations that have been blacklisted and
| denied banking services, etc.
|
| We can also say that the primary use case of signal is
| "illicit" communication -- that is, attempts to skirt
| eavesdropping by various government security
| organizations, and this is why Signal received funding
| from the U.S. government - it was a device to assist in
| coordinating anti-government protests in nations the US
| wanted to oppose. For the same reason, the U.S. Navy
| created and funded Tor.
|
| So this is a two way street -- the ability to send
| payments and securely communicate even if your government
| doesn't want you to do that is great when they are used
| to support dissidents in nations you oppose, but not so
| great when they are used for similar purposes at home, or
| when they are used for organized crime. Just because a
| technology's primary use case is "Illicit" doesn't mean
| it's not a valuable or useful technology.
| TremendousJudge wrote:
| Agree. For example, people who save in bitcoin or ether. They
| don't have any influence into how the system is managed.
| onion2k wrote:
| Is there any crossover in a Venn diagram of "government is so
| bad you need crypto" and "government is good enough that they
| won't shut off the internet to control the people"? If there
| isn't then crypto isn't very useful in those places.
| philippejara wrote:
| Most governments that are so bad you need crypto are not
| that bad because of repression necessarily, but because of
| corruption or incompetence. Corruption or incompetence
| doesn't care enought to "shut down the internet" and if
| they do odds are a bad job will be done of it.
| cypress66 wrote:
| Yes. Argentina is an example.
| notpushkin wrote:
| It is hard to shut off the Internet (or at least should be,
| if it is properly decentralized).
|
| Point in case: Russia. Government has been trying to block
| everything they don't like for some ten years now I think.
| Controlling all the uplinks from the country is just not
| feasible (although they're working on buying everything out
| I believe), so it was in fact easier for them to make all
| the ISPs install some blocking equipment themselves, which
| works pretty poorly.
|
| Many times they were successful, but they couldn't shut
| Telegram down for example. When TLS ECH is finally adopted
| it's basically game over for them.
| miohtama wrote:
| If you shut down Internet, your economy suffers.
|
| Even China cannot block Github, because it would harm
| their economy too much. Chinese developers need to access
| Github (PyPi, NPM), or they are not productive. The
| global software industry is built on the top of Western
| science that relies of on freedom of information. Thus,
| they need to let free information to flow against the
| authorianship will.
|
| https://en.wikipedia.org/wiki/Censorship_of_GitHub#China
| notpushkin wrote:
| That's interesting! I thought China developers had npm /
| PyPI etc. mirrored so that they don't have to deal with
| the slowed worldwide versions.
|
| UPD: that said, I agree that the Chinese Firewall is
| about as far as you can shut off the Internet in a modern
| country (at least without turning into another North
| Korea).
| archontes wrote:
| I'm not sure it should be regulated. But it should be dyed. I
| should have the ability to say, "No crypto in my retirement
| portfolio, please." and have that be a knowable and enforceable
| property.
| aww_dang wrote:
| The great part about this is that you are not forced to use
| cryptocurrency. It is entirely voluntary.
|
| I like cryptocurrency as an open platform. I don't have a
| problem with the market clearing out the speculative mania. I
| do disagree with detractors who admit that they have no use for
| cryptocurrency demanding regulation. If you like regulated
| markets, stick to them. If you love the security of the
| petrodollar, good on you. Live and let live.
|
| Can I just publish a few cryptogames without the obscene
| generalizations?
|
| The worst part of this is that the entire FTX debacle comes on
| the heels of SBF demanding even more regulatory capture. Shades
| of Bernie Madoff. The insider connections to regulatory bodies
| and SEC board members. History repeats itself.
| jobs_throwaway wrote:
| no one should be allowed to use a system I don't like!!!
| P5fRxh5kUvp2th wrote:
| When bitcoin first came onto the scene I personally knew a guy
| who was running a website to act as an exchange. It was small
| because bitcoin itself at that time was very small.
|
| Then bitcoin had its very first dip and it became unprofitable
| to mine bitcoins. When that happened he shuttered the website
| and kept everyone's bitcoins.
|
| I knew of bitcoin early on due to this guy, but even then I had
| no interest and considered it bullshit. Then when I saw what
| this guy did it just solidified my opinion that it can't be
| trusted.
|
| That's not to say that in theory there aren't uses for it, but
| it's 100% speculative and nothing else. People try to compare
| it to things like gold for protecting your money from
| inflation, but that's completely nonsensical.
|
| If the value of gold crashes it still has an inherent value
| because it's a useful physical good (looking pretty is not the
| only application of gold). a bitcoin has ZERO inherent value.
| It's not possible for the value of gold to go to zero, but it's
| absolutely possible for the value of a bitcoin to go to zero.
|
| crypto will never go away, but it absolutely should.
| BLKNSLVR wrote:
| That's not a Bitcoin problem, but a human problem, and one
| that exists in any realm where value is held by a third
| party.
|
| It's like saying that sausages are bad, and should go away
| from existence, because the dog ate them off the kitchen
| counter.
| paiute wrote:
| it honestly sounds a lot like banking. We just have some
| rules now to prevent this sort of thing. It's not bitcoin
| that's the problem... It's the money changers.
| Loughla wrote:
| If an item only works well in theory, then the item itself
| is the problem.
|
| A firearm is absolutely, 100% safe as long as no one ever
| interacts with it.
|
| Because we are humans, in a society, and everything we do
| relies on human interactions, if Bitcoin (and crypto in
| general) cannot operate positively and effectively, _except
| in theory_ , then it is the problem, regardless of the
| underlying reason.
| majikandy wrote:
| If the value dropped to Zero, I'd "buy" them all and then run
| my own miner to confirm the transaction and sail off into the
| virtual sunset with my story about how I bought all the
| bitcoin in the world. I'd keep running the miner and
| publishing my chain. But then someone would come along with
| more hashpower than me and rewrite all my transactions with
| their longer chain and my sunset would turn to darkness, and
| I'd be poor again... but ironically they'd probably not be
| worth zero anymore. Then people would rewrite that chain with
| more hashpower... And so on, until greed secures the
| transactions again and restores value.
|
| At which point I'd turn my miner off and wind the chain back
| to when I was rich on my private virtual island for one and
| live happily ever after.
| abudabi123 wrote:
| I suspected early period Bitcoin gained enormous deposits
| from corrupt "Tiger" traitors (or defectors) in the Communist
| Party. They exited China's smog for Canada, for example.
| bnralt wrote:
| > If the value of gold crashes it still has an inherent value
| because it's a useful physical good (looking pretty is not
| the only application of gold).
|
| The value of gold is protected by the fact that the majority
| of it's holdings (at least, according to this[1]) aren't used
| for speculation. Still, a good chunk of them are, which means
| there can be pretty huge swings and it's considered a poor
| investment.
|
| Have tried to say the inherent value of a dollar is because
| it's backed by the U.S. military, but fundamentally, it's the
| same reason. Dollars aren't held as speculative assets. The
| poor returns from the dollar are one of the reasons why
| people push other investments. If currency does enter into
| speculative territory, bad things can (and do) happen. See
| Hot Money[2].
|
| Anything, even if it has inherent value, can be extremely
| dangerous when there's a large number of speculators. Because
| no matter the value, speculation can drive the price much,
| much higher. And it's a snowballing effect - the more an
| asset rises, the more people want to buy it for speculative
| reasons, and the more people buy it the more it rises.
|
| And then any inherent value (if it even exists) looses
| significance - you're in a game of chicken with the other
| investors, trying to both hold on as long as you can and get
| out before everyone else does. The winner gets the fortune,
| the loser is left holding the bag.
|
| The thing is, almost everyone in the crypto space seems
| interested in speculation. It might be speculation +
| decentralized voting rights or speculation + digital
| ownership, but speculation is always at the heart of it. The
| idea that if you get in early you'll be able to cash out for
| a big profit. Of course a space almost entirely driven by
| speculation is going to be inherently dangerous and unstable,
| and the "opportunities" are the same type as those of a
| casino.
|
| [1] https://en.wikipedia.org/wiki/Gold_holdings [2]
| https://en.wikipedia.org/wiki/Hot_money
| paiute wrote:
| Central banks hold dollars all the time, as a speculative
| asset. Same reason people buy treasury notes at low
| interest rates.
| arcticbull wrote:
| Gold is priced way higher than it's worth due to
| speculation, yes, but it does have intrinsic value in
| industrial processes and electronics. I wouldn't invest in
| shiny pebbles personally but there is a very real,
| fundamental difference.
| P5fRxh5kUvp2th wrote:
| dang wrote:
| Please don't post HN threads flameward. It's not what
| this site is for, and destroys what it is for.
|
| https://news.ycombinator.com/newsguidelines.html
| P5fRxh5kUvp2th wrote:
| One could argue that the complete and utter strawman by
| the other poster is more likely to start a flamewar than
| someone asking if they understood the actual point.
|
| But let me guess, if I press you on this I'm going to get
| banned in a week or so for such and such reason.
|
| something something assume good faith?
| dang wrote:
| > One could argue that
|
| Sure, but it always feels like the other person started
| it and did worse--so everybody always argues that.*
|
| Let's assume you are right and the other person is wrong.
| Posting an unsubstantive snark is the worst way to
| respond. It poisons the atmosphere, evokes worse from
| others, and ultimately discredits your own position
| (which, if you're right, means you're discrediting the
| truth--and that hurts everyone**).
|
| What you should do instead is one of the following:
|
| (1) respectfully provide correct information, so we can
| all learn; or
|
| (2) chalk it up to the internet being wrong about
| everything and just move on.
|
| * https://hn.algolia.com/?dateRange=all&page=0&prefix=fal
| se&qu...
|
| ** https://hn.algolia.com/?dateRange=all&page=0&prefix=tr
| ue&sor...
| P5fRxh5kUvp2th wrote:
| guidelines state to assume good faith, I asked if they
| understood the actual point.
|
| What's happened here is my assumption of good faith with
| a question got turned into a warning by the mod because
| they, themselves, did not assume good faith on my part.
|
| So the question becomes, are those guidelines taken
| seriously by the moderators of this site or not?
|
| If they are, then maybe admit to your error and lets all
| just move on.
| dang wrote:
| It was obviously an unsubstantive comment, unduly
| personal, and basically a variation on "did you even read
| the article" which the site guidelines ask people not to
| post. That makes it flamebait, regardless of your
| intention when you posted it. I don't think it was a
| borderline call, nor is it hard to understand.
|
| Ironically, the sort of legalistic pleading you're
| resorting to is a sign of a lack of the good faith you're
| claiming. So is the style of your reply sequence: never
| admit or accept a thing, never address what the other
| person says, and simply bring up a new argument every
| time. These are troll tactics, whether you're using them
| that way intentionally or not (https://hn.algolia.com/?da
| teRange=all&page=0&prefix=true&sor...), and part of how
| we moderate HN is not to dance that way.
| nawgz wrote:
| The other poster took the idea you expressed - that
| "[crypto is] 100% speculative and nothing else" - and
| further explored the idea, and some markets they have
| seen where the price action either devolves or remains
| rational.
|
| What exactly did he do that was a "strawman"? Why are you
| so angry? It was an interesting comment thread, and then
| you are acting as if persecuted by the other commenter
| and HN moderators.
| P5fRxh5kUvp2th wrote:
| They spent 90% of their post talking about gold also
| being speculative rather than crypto.
|
| I asked if they understood my actual point because I was
| never denying that gold had speculation, but that when
| that speculation collapses gold still has value due to
| it's application in the physical world.
|
| They obviously misunderstood me.
| sacrosancty wrote:
| wizofaus wrote:
| I don't think I've ever seen a convincing argument that the
| physical "usefulness" of gold is a significant factor behind
| its market value. The closest is the argument that it's
| useful as marker for indicating wealth/status/privilege,
| because of its rarity (and obviously the skill involved in
| crafting it into various ornaments/utensils etc.). But yes,
| arguably more useful than cryptocurrency (where there's value
| in the concept of a distributed cryptographically-backed
| ledger, and the software that exists to support it, but not
| really in any individual unit of a cryptographic currency).
| Then again, there's really no absolute utility in units of
| fiat-issued currency either - it just happens to be the only
| sort of currency that governments accept for paying taxes
| (therefore necessary for keeping yourself out of jail).
| P5fRxh5kUvp2th wrote:
| The point is that gold is useful, crypto-coins are not.
| cft wrote:
| Get ready for CBDC, surveillance of every transaction and
| economic unpersoning then.
| pessimizer wrote:
| The government doesn't need a cryptocoin to monitor
| transactions, or to make using paper currency illegal. It
| can already do what you think it needs a cryptocoin to do,
| and it doesn't do it because it supports wealthy people
| being able to launder money and avoid taxes. US politics
| runs entirely on laundered money and misdirected/avoided
| taxes. You're lobbying for the swamp.
| yonaguska wrote:
| I anticipate CBDC being something for the peons to use,
| not the elite. Yes, the government can monitor
| transactions, but it currently has to jump through a lot
| more loopholes to do so. I understand and agree with your
| sentiment, with the additional point that smaller banks
| are also going to be made obsolete if a CBDC is rolled
| out.
|
| But the wealthy and connected will most certainly have
| their own way of getting around the system. Whether that
| means moving their money into physical assets, or onto
| the market, I don't know. I don't think cash is going to
| go away, but I do see the government incentivizing
| regular people to solely use CBDC, and once you're on
| that system, you are a serf.
| codehalo wrote:
| At this point, if HN is any indication, they deserve it.
| cft wrote:
| I migrated to https://stacker.news ; anxiously waiting
| for them to open other subs
| compsciphd wrote:
| I'd go a step further with the comparison to gold. If
| everyone would stop mining gold today, gold would retain
| value (or perhaps even go up in value). On the flipside, if
| we turned off all bitcoin miners today, bitcoin would go to
| zero instantly (as its worthless without continuous resources
| being pumped into it).
|
| This is why I'm sympathetic to those who say its ponzi
| scheme, it only has value because of new resources continuing
| to be poured into it.
| luddit3 wrote:
| And if we turned off the internet how many companies would
| be worthless, because that is about as likely to happen as
| all mining stopping.
| acdha wrote:
| Normal people would notice and agitate for the internet
| to be restored. Most people's daily lives would be
| significantly impacted.
|
| In contrast, only speculators would notice bitcoin going
| offline. They might laugh at the guys who told them they
| weren't going to make it but that'd be it. Nothing would
| break, nobody would be in line ahead of them failing to
| buy something, etc.
|
| That matters because bitcoin's floor value is zero: as a
| very weak fiat currency, the only reason to use it is
| when you think it'll be profitable and if that confidence
| drops miners will stop putting more hard money into the
| system.
| themihai wrote:
| What is crypto used for? Who uses/needs the crypto
| network for anything except speculation?
| Lerc wrote:
| >if we turned off all bitcoin miners today, bitcoin would
| go to zero instantly
|
| You talk about this like this is an easy action with
| profound consequences. It's like saying If everyone killed
| themselves, there would be no people. This is trivially
| true, but it's not going to happen.
|
| >(as its worthless without continuous resources being
| pumped into it).
|
| All forms of transaction has some form of resources put
| into it. The quantity of resources is what is at issue
| here. Bitcoin does not need the massive quantity of
| resources it currently uses to operate. That is an artifact
| of the high value of Bitcoin coupled with the subsidy of
| the mining reward.
|
| I'm not sure if the creator(s) of Bitcoin evaluated what
| kind of value a Bitcoin should have over time, The mining
| reward halving rate suggests that they were not expecting
| it to have a continual average rise above 20% per year
| (which makes sense because that would be insane). To date,
| however, it _has_ been averaging more than that, resulting
| in an increase in value of the mining reward relative to
| other currencies. Should the value drop or simply not
| increase for a extended period, the mining subsidy becomes
| less. Then only the most efficient miners can make money
| mining and the difficulty drops to a new equilibrium as the
| ones who can no longer make money drop out.
| golergka wrote:
| > If everyone would stop mining gold today, gold would
| retain value (or perhaps even go up in value). On the
| flipside, if we turned off all bitcoin miners today,
| bitcoin would go to zero instantly (as its worthless
| without continuous resources being pumped into it).
|
| "Mining" in bitcoin means two different things, creating
| new coins AND adding transactions to the ledger. If mining
| reward went to 0 (which will actually happen someday), and
| new coins stopped being created, miners would still be able
| get a profit from transaction fees, although it wouldn't be
| "mining" in the same sense as gold.
| Justsignedup wrote:
| I believe that's what we call a pyramid scheme. It only
| works as long as resources are being poured into it. The
| second the money flow stops, it instantly collapses.
| stephc_int13 wrote:
| I've read elsewhere that below $13K it is not profitable to
| mine bitcoins.
|
| We're very close to this threshold now, given what is
| happening now and during the next few weeks I would not be
| surprised if BTC is going below that threshold.
|
| I think it's time to stash a few bottles of champagne.
| shawabawa3 wrote:
| The protocol self adjusts so that it's always profitable
| to mine bitcoins
|
| As it becomes unprofitable miners stop, and the
| difficulty drops so that it becomes cheaper to mine,
| until it reaches an equilibrium
| stephc_int13 wrote:
| Is the difficulty dropping because miners are then racing
| against less miners, or is it a different mechanism?
| Kranar wrote:
| Different mechanism, Bitcoin's difficulty adjusts based
| on how quickly blocks are mined so that on average 1
| block is mined every 10 minutes.
|
| The protocol adjusts every 2016 blocks, if it takes
| longer than two weeks (20160 minutes) to mine the 2016
| blocks then the difficulty decreases, if it takes less
| than two weeks to mine 2016 blocks then the difficulty
| increases.
| r1ch wrote:
| The adjustment algorithm still requires blocks to be
| generated before it adjusts. If enough miners shut down
| at the same time, time between blocks will skyrocket,
| pushing the difficulty adjustment forward even further
| and crippling the transaction throughput.
| tim333 wrote:
| Nitpicking but
|
| >if we turned off all bitcoin miners today, bitcoin would
| go to zero instantly
|
| isn't true. You couldn't trade them normally with the
| miners off but you could start mining up the day after - it
| only takes a couple of computers really.
| [deleted]
| feet wrote:
| Turning mining back on is entirely changing the parent's
| statement.
|
| "Well yea you could do that change to tank the value, but
| imagine if you just undid it huh???"
|
| The point was without mining entirely, there is no value
| Taniwha wrote:
| But there's only ever going to be a fixed number of
| bitcoin - does it all just stop working when it's all
| mined out?
| Lerc wrote:
| The mining reward is not supposed to be the end state of
| the system. It is a subsidy, reducing over time, to get
| the system established.
|
| Once established, the idea is that transaction fees are
| used and the distributed nature of the network causes a
| natural competition to be the most efficient so miners
| can charge the lowest fees while making a profit.
| feet wrote:
| Iirc miners get the gas fees
| majewsky wrote:
| Once all bitcoins are mined, miners are supposed to fund
| themselves solely through transaction fees, as they
| partially already do today.
| arcticbull wrote:
| > You couldn't trade them normally with the miners off
| but you could start mining up the day after.
|
| So if we turn off all the bitcoin miners, it wouldn't be
| possible to transact. All you could do is look at it,
| like a read-only excel sheet.
| mr_woozy wrote:
| snapcaster wrote:
| But you understand why this hasn't happened yet right? if
| everyone else turned off their miners, I for one would be
| interested in money and turn one on
| rhino369 wrote:
| I think Bitcoin has no value. But I don't think mining
| issue you raise is a reason why. The difficulty of mining
| is pegged to size of the mining pool so you don't actually
| need that many miners to operate the whole network.
|
| Mining is bad for other reasons--it's a huge waste of
| resources when bitcoin is worth a lot of money.
| P5fRxh5kUvp2th wrote:
| ^ that was exactly my point and why I asked the other
| poster if they actually understood the point.
|
| but I'm in the middle of getting warned and moderated by
| dang for daring to ask such a question!
| randomdata wrote:
| _> It 's not possible for the value of gold to go to zero_
|
| The price might go to zero, though. The price of oil, which
| is arguably more useful than gold, went _negative_ a couple
| of years back. Having intrinsic value doesn 't necessarily
| mean it is exchangeable, especially if it needs to be
| exchanged at a given moment in time.
| dahfizz wrote:
| The price of oil _futures_ went negative. The spot price of
| oil has never and will never hit zero or negative.
|
| You can't use your regular intuition about commodity prices
| when talking about futures contracts. The negative price
| was a one-day event, and all it really represents is a
| higher-than-normal premium on the calendar spread.
| gizajob wrote:
| The exchange value might fluctuate but the use value
| remains, in the case of oil and gold. Bitcoin has no use
| value. Could say that about other financial instruments and
| derivatives, but they serve a purpose to those who use
| them. There's a big difference to exchange value and use
| value though, Marx made a career out of defining it.
| randomdata wrote:
| Its value is all well and good if you personally have a
| use for it, but if you are merely stockpiling it in hopes
| of selling it later then that doesn't help much if the
| price has fallen to zero. You might be left with
| something pretty to look at and little more as you hold
| out for a recovery, if you don't take the bath and end up
| with nothing.
|
| Which could also be said about Bitcoin. I'm sure someone
| out there would find some kind of academic interest in
| looking at Bitcoins or enjoy collecting them. There might
| be almost no value in Bitcoin, but it would probably
| never erode completely.
| P5fRxh5kUvp2th wrote:
| In fiction there's an idea known as 'plot armor'. In
| essence, it's the idea that causality and realism are
| suspended for some reasons related to the plot.
|
| Your scenario here is plot armor.
|
| Sure, if we pretend that gold stops having ANY use
| outside of being pretty, then when it stops being
| considered pretty it's value will go to 0.
|
| But the fact is, gold has a myriad of uses besides being
| pretty and those uses give it an inherent value.
|
| And when you go to sell it, others' use of it is what
| sets the sell value, not your personal use of it. It
| doesn't matter that I'm not personally using it for
| conductivity if the person I'm selling it to is (or
| someone downstream of them is).
|
| IOW, stop posting fiction.
| randomdata wrote:
| _> Sure, if we pretend that gold stops having ANY use
| outside of being pretty_
|
| I fail to see the purpose of this 'pilot amor'. There is
| no reason why gold would stop being useful beyond being
| pretty. This fiction you've come up with doesn't even
| make any sense and certainly has no relevance to the
| discussion.
|
| However, that doesn't mean there is always a user
| available. When we saw the price of oil go negative there
| were still just as many uses for oil as there ever was,
| but for various reasons there weren't buyers in that
| moment. Gold is not immune to the same.
|
| In case you are still confused, let me be clear: Price
| and value are not the same thing.
|
| _> IOW, stop posting fiction._
|
| Sage advice.
| P5fRxh5kUvp2th wrote:
| This happens entirely too often on this website.
|
| I used the phrase 'inherent value' to describe what
| you're referring to as 'use value'. But of course someone
| decided they had to argue against it by arguing that the
| trade value between countries went negative at one point
| (which isn't all that surprising but has nothing to do
| with the original point).
|
| arguably 'use value' is a better phrase, but given the
| surrounding explanations, the poster engaged in a clear
| strawman.
| w1nst0nsm1th wrote:
| Oil (and gas) are specific cases, not relatable to gold...
|
| The point with oil is its extraction can't be stoped
| overnight, and thus has to be stored in case of excessive
| production, which has itself a cost.
|
| Demand droped significantly when the lockdown occured ;
| storage facilities where saturated ; and oil was kept in
| oil tankers which are pretty expensive.
|
| The negative price reflected the cost of storage.
|
| There is no such issue with gold.
| theGnuMe wrote:
| You have to store the gold somewhere so you have storage
| costs which could theoretically exceed the cost of the
| gold at some point.
| ManuelKiessling wrote:
| Just for the record (and not as a defense of crypto): using
| gold for protecting your money from inflation is completely
| nonsensical, too.
| anonymousiam wrote:
| Although I agree with almost everything you said, under
| certain conditions it would be possible for certain prices of
| gold to go to zero, or even negative.
|
| See: https://www.marketwatch.com/story/oil-prices-went-
| negative-a...
| azangru wrote:
| > When that happened he shuttered the website and kept
| everyone's bitcoins.
|
| > I knew of bitcoin early on due to this guy, but even then I
| had no interest and considered it bullshit. Then when I saw
| what this guy did it just solidified my opinion that it can't
| be trusted.
|
| But isn't it instead an early lesson in "not your keys not
| your coin" maxim that Bitcoin advocates preach?
|
| > If the value of gold crashes it still has an inherent value
| because it's a useful physical good (looking pretty is not
| the only application of gold). a bitcoin has ZERO inherent
| value.
|
| Yes, but: 1) it's very difficult to self-custody gold (it's
| bulky, needs a safe place for storage -- and if you put it in
| a bank, you need to be able to trust that you can get it out
| again); 2) it's very difficult to transfer, especially cross
| borders, especially in large amounts; 3) it's very difficult
| to use as an actual money, whereas bitcoin could conceivably
| be used as such (especially with Lightning).
| runarberg wrote:
| Your parent was talking about gold in the niche case of
| protecting from inflation, and passed no judgement over the
| merit of doing so, only that it was better then
| cryptocurrency in that particular niche.
|
| If you want to purchase gold to protect your money from
| inflation (which you probably shouldn't) then you probably
| buy it through some insured exchange--maybe even through
| your bank--that will keep it for you, if you don't trust
| any exchange, that is your problem. If you need to transfer
| your money, or use it, then you're not protecting it
| against inflation anymore are you? So you will just use
| regular money for that.
|
| Anyway, you shouldn't buy gold to protect your money from
| inflation. Instead you probably should just risk an
| inflation and keep your money in a savings account, or buy
| secure government bonds for it, or something.
| danaris wrote:
| > "not your keys not your coin" maxim that Bitcoin
| advocates preach?
|
| I keep seeing this phrase crop up throughout the past
| several days of cryptocurrency news, and something always
| rubbed me the wrong way about it, but I couldn't put my
| finger on it until today.
|
| It's demanding a change in human nature to accommodate the
| system, rather than changing the system to accommodate
| human nature.
|
| It's really not that different than the people who, 15
| years ago, were saying, "Well, of _course_ your accounts
| got hacked, because you didn 't create a separate
| 27-character totally random password for every single
| account you need, like _I_ do, and never store those
| passwords anywhere except your head! "
|
| People don't want to deal with a hardware token every
| single time they want to do anything with their money...and
| the only reason they _have_ to, with cryptocurrency, is
| because its proponents think an unregulated
| "decentralized" financial system where the only law is code
| is a good idea. (Of course, it was never going to stay
| unregulated forever. None of the aspects of cryptocurrency
| that rely on the government not paying attention can last
| more than another few years.)
| origin_path wrote:
| _" People don't want to deal with a hardware token every
| single time they want to do anything with their money"_
|
| Maybe not, but they have to regardless. Banks force this
| on users anyway (outside the USA). To pay for things I
| have to use either a chip card (token), or equivalent
| embedded in my phone (a token), or log in to e-banking
| using a chip card PIN pad (token) or my phone again, or
| auth an online CC tx with a phone app (token).
|
| But no matter what I do the only way to move money around
| without invoking a hardware cryptographic token at some
| point, is use paper money and physical coins.
|
| So this isn't really something new. Bitcoin was just
| ahead of the curve in this regard. Also, it's really hard
| for banks to reverse transactions outside of the USA.
| What makes bank money "safe" compared to crypto is simply
| that:
|
| 1. Governments will bail banks out because they're too
| big to fail. Of course you end up paying for it through
| inflation anyway.
|
| 2. Everything is KYCd/AMLd up the wazoo so even if money
| is drained from your account in the same way it could be
| for a cryptocurrency, the perps will find it much harder
| to evade capture.
| marcosdumay wrote:
| It is stating the truth. If you don't like it, don't
| participate on the market. If you don't like it and
| insist on participating on the market, you _will_ get
| scammed.
|
| None of that has any ethical or sociological
| consideration inbuilt. It's a simply observation of the
| system.
|
| Anyway, yes, that means the system is bad. But this is an
| ethical and sociological consideration.
| aww_dang wrote:
| Self-custody means users withdrawing their coins from
| exchanges or other custodial services.
|
| >"Well, of course your accounts got hacked, because you
| didn't create a separate 27-character totally random
| password for every single account you need, like I do,
| and never store those passwords anywhere except your
| head!"
|
| The keys can be recorded as a seed phrase. Typically this
| is a sequence of dictionary words. Look into it before
| you dismiss it so flippantly. Things have come a long way
| to make things easier for the user. There are also
| dedicated hardware wallet devices for key storage.
|
| If you're not transacting or conducting business with
| cryptocurrency, why do you care so much? It is literally
| none of your business. Nobody is forcing you to pay taxes
| or finance wars with BTC.
| danaris wrote:
| I wasn't aware that something had to be "my business"
| before I was allowed to discuss it on HN.
|
| And "dedicated hardware wallet devices" are _exactly_ the
| kind of thing that I 'm talking about here. There is no
| way those are going to be appealing to mainstream users;
| thus, _if_ cryptocurrency were ever to genuinely enter
| the mainstream, the _vast, vast_ majority of users would
| be keeping their crypto on exchanges.
|
| Y'know, exactly the way the vast, vast majority of people
| keep their money in regular bank accounts. Which don't
| require this kind of rigamarole, and _never_ result in
| _regular people_ (ie, not the very wealthy) losing money,
| because it 's all regulated and insured by the
| government.
|
| (Yes, I know FDIC insurance has a limit. The limit is
| high enough that _regular people_ will never even have to
| care that it exists.)
| pseudostem wrote:
| >it's bulky
|
| Slight nitpick, Total gold above the earth's surface is
| less than a cube with sides 25 metres each.
| itronitron wrote:
| For anyone that is curious, it's about 4.5 double chests
| of gold block stacks in minecraft. Not particularly
| difficult, but a challenge nonetheless.
| saalweachter wrote:
| The weird thing to me is that the total mass of silver
| mined is only about 8x the total mass of silver, but the
| price spread is 80x.
|
| Copper is much more abundant, over 400x more copper than
| silver has been mined, but silver is _almost_ as scarce
| as gold. It really seems like the price spread should be
| closer.
| soco wrote:
| Uh, I wear some gold on me and cross borders with it and
| keep it at home when not and there's this thing called pawn
| shop in my village and otherwise and... are you sure those
| you mentioned are real problems? Or maybe you mean only the
| large amounts problems - in which case we should underline
| bitcoin aims to solve the problems of the rich, which most
| people on earth are not.
| _fat_santa wrote:
| Broadscale, crypto seems to have had an "Eternal September"
| moment and I think that's where the problems really began.
| Back in the early days before crypto entered the mainstream,
| it was pretty much like any other internet project. It was
| cool to be able to buy a pizza with internet funny money but
| by then it was still pretty small and everyone knew the
| inherent risks.
|
| Then came the "Eternal September" where cryto went mainstream
| and many people started pitching this formerly niche project
| as a real investment vehicle. And people bought in thinking
| it was like any other investment. IMHO cyrpto itself isn't
| bad, it's all the people that pitched it like an old school
| investment vehicle.
| Justsignedup wrote:
| I honestly can't think of any positive thing about crypto.
| It solves nothing, it only acts as a pyramid scheme from
| day 1.
| AlotOfReading wrote:
| I remember getting into Bitcoin in early 2010 when the
| pizza thing happened. Even back then it was hyped to me as
| an investment and an alternative to the corrupt financial
| system.
|
| There's _always_ been an undercurrent of this stuff. The
| eternal September came years later, after big scams like Mt
| Gox had already long imploded.
| origin_path wrote:
| Mt Gox wasn't a scam, just very poorly run.
| AlotOfReading wrote:
| I guess you could argue that it wasn't a scam because it
| wasn't the leadership doing the theft, but it's a bit of
| a meaningless distinction in the end. Lots of bitcoins
| were stolen, withdrawals were halted, and customers lost
| their money regardless.
| at-fates-hands wrote:
| >> It never had a real use outside of scamming people and
| buying illegal shit,
|
| Some anecdotal evidence to support what you're saying.
|
| I work at a large health care company. When crypto and
| blockchain was getting popular, there was a huge push in the
| company to adopt blockchain and to a degree, crypto. I'm
| talking hour long presentations by blockchain companies,
| videos, and trainings. It was heralded as the dawning age of
| technology where people can be treated and pay in crypto, while
| at the same time, all their medical files being securely stored
| on the blockchain. They pushed it as the next step in 100%
| digitizing health care.
|
| 3 months later? It was dropped. Not just dropped, either. It
| was _silenced_ throughout the entire company. The sharepoint
| sites promoting it internally were gone, the videos,
| presentations, and trainings were all scrubbed from the company
| sites and resources, like it never existed.
|
| I started asking around and found out the executives found out
| about several exchanges going under and taking millions of
| people's money and how blockchain was more of a solution in
| search of a problem. That combination became too toxic for them
| to invest and be associated with.
| calculatte wrote:
| Are you pretending that the government's ability to create fiat
| currency out of thin air doesn't endanger anyone? Printing
| trillions over the past few years is what is throwing us into a
| worldwide depression.
|
| You think the "spooky scary government" is harmless? The US
| government has used its funds to kill over 20 million people
| since WWII without officially being at war. 90% of those killed
| in US drone strikes are bystanders.
|
| Domestically, we see unrestrained corruption from nearly all of
| our elected officials leading to every outcome to its own
| citizens. Poisoned water supplies, missing disaster response,
| war. But as long as your bank account is insured, everything is
| cool?
|
| Cryptocurrency was created for, and remains suitable for, valid
| uses that are not "drugs and other illegal stuff." But this is
| a new technology without guardrails. Bad actors are a problem.
| So is FUD from competition and disinformation like the parent.
|
| This is a growing technology that requires a level of knowledge
| to safely use until it is mature enough for mass adoption.
| kragen wrote:
| I see this point of view a lot on Hacker News because it's
| dominated by people living in places like the US. Let me add a
| little perspective on how Bitcoin is used in lower- and middle-
| income countries from my personal experience.
|
| If you live in a country with a highly functional banking
| system and no kleptocracy, Bitcoin is probably a bit puzzling
| unless you have family in Cuba. But it's not puzzling at all
| for those of us who live somewhere in the middle of the broad
| spectrum between Switzerland and Somalia, because most places
| have a _little_ kleptocracy. Argentina is a stable democracy,
| far from being "a failed state,"+ but if you want to send
| US$500 abroad via non-Bitcoin means it's basically impossible,
| and the only broadly available savings vehicle is real estate
| (" _ahorrar en ladrillos_ "), which of course grossly inflates
| real-estate prices, with a substantial part of the capital city
| occupied by empty apartments someone bought "as an investment".
| Historically, Argentines have saved by buying dollars, but
| that's limited to US$200 a month now, and then only if you have
| a non-under-the-table job (about a third of total employment is
| under the table):
|
| <https://www.ambito.com/finanzas/dolares/cronologia-del-
| cepo-...>
|
| Something like 300,000 people out of a country of 40 million
| are legally permitted to buy dollars.
|
| You can see that in September 02019 when this measure was
| imposed the price of a dollar was AR$63.50; now it's AR$305. So
| whatever savings you had in pesos in 02019 have lost 79% of
| their value to peso devaluation. In fact, whatever savings you
| had in pesos a week ago have lost 4%.
|
| I've been using Bitcoin to get paid for several years at this
| point where I live here in Argentina. It's currently 14 years
| after Bitcoin's invention, and some people think it's
| regressing instead of progressing. Well, 14 years after the
| internet's invention was 01983; not only couldn't you get so
| much as a weather report online, much less IRC, but many of the
| early interesting experiments like NLS at SRI had shut down,
| and more and more places were disabling guest access to their
| hosts--you couldn't run so much as a game of ADVENT without
| getting a username. And a password. Things were seriously
| regressing. The only people you could talk to on the internet
| were other people who really bought into the subculture.
|
| In 02001 a lot of Argentines had saved dollars in their dollar-
| denominated, "government insured" bank accounts. This did not
| preserve their savings through the financial crisis that year;
| the cash-strapped government limited withdrawals to a trickle,
| then converted dollar deposits to pesos at a one-to-one rate,
| then released the exchange-rate peg, at which point peso went
| overnight from being worth US$1 to being worth US$0.25 before
| settling at about US$0.31 for the next few years. The US did
| something similar in 01933. There was no recourse for this
| scam.
|
| You might think alternatives to banks like credit unions would
| protect their customers better, since the customers are the
| owners, but Credicoop depositors suffered the same two-thirds
| confiscation of savings as depositors in for-profit banks. And
| they pay the same 3% tax on bank transactions including checks.
| That's more than a fast Bitcoin transaction fee of US$15 for
| transactions over US$500.
|
| But we're not a failed state. There are no gangs of bandits
| roving the streets in Argentine cities (though there are some
| pretty bad slums where you'll get robbed if you wander in
| without knowing anybody). Courts, free public hospitals, and
| roads continue to function, though there are more potholes than
| a couple years ago. Argentine infant mortality is 10 per 1000
| live births, down from almost 20 in the late 01990s and the
| same as the late 01980s in the US; life expectancy at birth is
| 77 years, worse than Switzerland's 84, but the same as China
| and Hungary, and better than Saudi or Mexico. (Somalia is 54.)
|
| Most of the world is worse off than Argentina, although not
| necessarily in such a statistically transparent fashion. About
| one fourth of the people in the world are unbanked, 51% here in
| Argentina, 70% in El Salvador; even advanced countries like
| Russia, Hungary, and Uruguay have roughly a quarter of the
| population unbanked:
|
| <https://www.gfmag.com/global-data/economic-data/worlds-
| most-...>
|
| And if your family lives in a country like Iran or Venezuela
| subject to US sanctions, and you live in the US? Good luck
| sending them an ACH, instant or otherwise!++ It's well known
| that Bitcoin is very popular in Venezuela, which kind of is a
| failed state, so one of the Venezuelan governments is trying to
| tax Bitcoin remittances at 15%.
|
| <https://archive.fo/ZRXzS>
|
| Bitcoin handles a few billion dollars per year in such
| remittances. A few billion dollars a year might seem like a
| trivial amount of money to someone in a rich country, but in
| poor countries, it's enough to keep several million people
| alive.
|
| Even in the US, it's common for the police to confiscate large
| amounts of paper currency just because they can ("civil
| forfeiture"); US bank accounts are probably fine for US$100K
| but probably somewhat risky for US$10M if the bank thinks you
| don't seem like the kind of person who ought to have it. US$10M
| in US$100 bills fits in a box you can wheel around on a dolly,
| but Bitcoin is a lot more practical. (And of course US$10M in
| dollar bills loses about US$200k per year to inflation.)
|
| Transaction fees are usually high enough that you wouldn't want
| to use Bitcoin to pay for a can of Red Bull or even a
| restaurant dinner. But it's extremely practical as an
| alternative to Western Union or US$100 bills or gold; even when
| transaction fees are high, they're low compared to the black-
| market spread.
|
| So, Bitcoin doesn't have to be a cypherpunk utopia to be a big
| improvement on the _status quo ante_. For those of you living
| in stable countries where your worries are things like "instant
| and extremely low-fee ACHs" and "decentralized utopia", this
| may be very confusing, but try to remember that most of the
| world lives in places with much more pressing concerns,
| concerns that Bitcoin helps a lot with. And you may live there
| too, soon--the loyal subjects of Kaiser Wilhelm in 01913
| certainly didn't expect that in 15 years they'd be in the
| middle of a hyperinflation episode that remains legendary a
| century later.
|
| I think that, by providing workarounds to the people who need
| them, cryptocurrencies probably not only ameliorate the most
| immediate and pressing concerns of poor parts of the population
| like Venezuelan immigrants and MS-13 victims, but probably also
| adjust the power balance in a more liberal and democratic
| direction. This will improve the chance of those concerns being
| ameliorated by public policy over the next decades as well. But
| it's hard to tell what will really happen.
|
| Of course, when saving money or making a living becomes
| illegal, I guess they count as "buying illegal shit". But that
| doesn't make them bad.
|
| The potential disaster scenario is that, by making most
| taxation impossible, cryptocurrencies destroy the modern
| welfare state without providing anything to replace it. So the
| public hospitals close, the enormous police force starts to
| support itself by extracting tribute, and the infrastructure
| decays. Pretty similar to what's happened in the US over the
| last 50 years, in fact, only more so.
|
| However, at this point I think the modern welfare state is
| already doing a good enough job of destroying itself without
| any significant help from cryptocurrencies--as evidence, I can
| point to Maduro, Macri, Bolsonaro, Trump, and Brexit, and
| metonymically to the social changes they betoken. So at this
| point I'm more worried about cushioning the collapse than
| preventing it.
|
| ____
|
| + We've remained democratic since 01983, electing presidents
| from three different political parties (UCR, PJ, and PRO), and
| there's no serious insurgency. It's the _economy_ and
| _government policy_ that are ruinously unstable, to a point
| that seems satirical to anyone accustomed to the US, but is
| lamentably common worldwide. Rich people sometimes say they
| don't know of legitimate uses of Bitcoin outside of "failed
| states".
|
| ++ Family remittances are specifically exempted from the US
| sanctions on Iran, but good luck finding a US bank that's
| willing and able to take that risk: <https://www.wiggin.com/wp-
| content/uploads/2019/09/26580_advi...>
|
| See also https://news.ycombinator.com/item?id=27448744.
| polygamous_bat wrote:
| Every time I see the "Bitcoin for remittance" logic, the
| first question I ask is: what is the use case or demand for
| Bitcoin at the third world where you are sending your money?
| Why should anyone want that except for speculation? Clearly,
| Bitcoin is not being accepted at the mom-and-pop shop in
| Bangladesh (they don't even take credit card), so what are
| the people supposed to do with the Bitcoin once they receive
| it?
|
| The answer that I have experienced is that it is being sold
| to the poorly informed local speculator, who have banked
| their hopes and dreams of getting rich someday to buying
| Bitcoin. In that way, Bitcoin is actually stripping wealth
| from the global poor and draining it back to the wealthy
| ones.
| kragen wrote:
| Well, as I explained, _savings_ is a demand for Bitcoin
| that isn 't the same thing as "hopes and dreams of getting
| rich someday". Just having an asset that doesn't reliably
| evaporate like the peso or the bolivar is a pretty big win
| already, even if you aren't going to get rich.
|
| Another important use case that I _didn 't_ mention is
| leaving the country to live somewhere better. Suppose
| you've saved up money in, to use examples I know something
| about, Argentina or Venezuela, and you've managed to do it
| in a form that doesn't evaporate due to inflation: US$100
| bills, emeralds, gold, real estate. Now you want to move to
| Spain, Uruguay, or Mexico. Getting those savings safely out
| of the country with you is going to be very challenging
| indeed; Argentine customs has dogs that are trained to
| sniff out dollar bills, for example. (And of course in the
| case of real estate it's impossible.)
|
| Again, maybe this is an example of "buying illegal shit":
| you aren't supposed to be able to escape these places with
| your life savings, because otherwise how can kleptocracy
| keep klepting? But obviously (at least to me) being able to
| take your savings with you makes the world a better place,
| even if it's illegal.
|
| But it's definitely not "stripping wealth from the global
| poor and draining it back to the wealthy ones". The
| "heavily regulated", "government insured", "government
| managed" world banking system is what does that.
|
| Maybe fleeing the country like this sounds like an
| extremely marginal, unimportant use case to you, but if so,
| that's probably because you don't know anybody from Cuba,
| Ecuador, or Venezuela. Not only are significant percentages
| of those countries' populations already living abroad, but
| even larger percentages of the people living there today
| depend on family members living abroad.
|
| I don't know anything about Bangladesh. I've never been
| there and I don't know anyone from there very well. Maybe
| the situation is different there and Bangladeshi people
| only invest in Bitcoin because they think they'll get rich.
| What are your experiences there?
| matt_s wrote:
| Are you concerned about the falling ratio of Bitcoin to
| USD? Or is the hope that this storm removes a lot of the
| scam artists/ponzi schemes and the ratio stabilizes in a
| way?
|
| Edit to add: it seems like the relative ratio doesn't
| matter much for the scenarios you describe because it is
| much better than the swings in local currency compared to
| USD.
| kragen wrote:
| Bitcoin has in fact lost _more_ value than the Argentine
| peso (or any other fiat currency) over the last year, and
| this is its largest fall ever (it has fallen over 70%
| twice before, but I think this is the first time it 's
| ever fallen 73%), and this is a big concern for its use
| as a savings vehicle, though only a minor inconvenience
| for its use for international remittances.
|
| Also, because the US$ has itself lost about 10% of its
| value over that last year, the fall is even worse in real
| terms than in nominal terms, closer to 75%.
|
| Over other periods of time, like the last two years or
| the last six months, this is not the case (that is, the
| peso has done worse than Bitcoin over those periods), and
| certainly anyone with savings in Bitcoin is hoping that a
| year from now it is at or near its current value, or even
| above it, rather than having fallen another 70% to
| US$4500. But it could. There is no guarantee, and my
| observation of periods of past Bitcoin volatility does
| not make me optimistic that scam artists will go away as
| a result.
|
| There is no prospect that the peso will have equal or
| higher value a year from now; both the general dynamics
| of central-bank-controlled fiat currencies and the
| specific pathologies of Argentina militate strongly
| against it. The long-run expected value of the peso is
| zero -- it's not a question of whether it will inflate
| over time, just how fast. Plausibly ruining the peso's
| usefulness as a unit of long-term account or a vehicle
| for savings is a worthwhile tradeoff for improving its
| usefulness as a medium of exchange; that opinion
| certainly has widespread acceptance among economists.
|
| So clearly anyone who invests their savings in pesos will
| inherit the wind; it's possible that whoever invests
| their savings in Bitcoin will as well.
|
| But maybe not.
| TacticalCoder wrote:
| > I see this point of view a lot on Hacker News because it's
| dominated by people living in places like the US.
|
| Totally. And it's not just about "stable countries".
|
| People in Cyprus (except the russians, who were warned a few
| days before and had the time to move their funds) saw the
| money on their bank account used to do bank bail-ins.
| Probably a test to see how the population would react when
| the same would happen EU wise (as bank bail-ins are now, by
| law, mandatory in the EU for failing banks).
|
| People in Spain were incentivized by the banks to put their
| savings into products yelding x% then the banks defaulted on
| the principal. That one's even more vicious than the Cyprus
| case.
|
| The FED and ECB printed trillions for years and year... But
| we're to believe that saving confiscated through inflations
| are due to only to supply chain issue and to the war that
| started in Ukraine. Yeah. Sell me a bridge too please.
|
| So far people in Spain and Cyprus who had put their money in
| BTC are still winning. Those who got their money confiscated
| by bail in and by bank-sold shady investments not so much.
|
| We'll see.
| [deleted]
| Zaskoda wrote:
| There's this unfortunate mixing up of the technology, the
| community, and the bad actors within the community. Ultimately,
| more crime gets committed with USD than with cryptocurrencies,
| yet we don't blame the dollars for those crime the way we blame
| crypto.
|
| There's a bigger paradigm here that I believe few people
| understand and that I will desperate attempt to explain. I may
| be about to write a word salad, but here's hoping.
|
| When the Internet was young, before e-commerce was a thing, it
| was a delightful space where you could publicly post your
| e-mail address and never worry about the repercussions. If you
| ran a server and a hacker gained access, it was on you to
| improve your security.
|
| Eventually, commerce found the Internet and everything changed.
| Once money was involved, bad actors started to get involved.
| This is when we started to experience the delights of e-mail
| spam, a problem we never really fully solved. And something
| changed about how we handle those hackers. Now that money is
| involved, if a hacker gains access to your system, instead of
| being responsible for your own server you can just call the
| police. And wow, did they crack down on hackers in the early
| days. They were bad at catching them, but when they did the
| punishments were disproportionate. It made things safe enough
| for commerce to grow, but it didn't make us nor the Internet
| much "better" in the long run. Rather, it put us in a rut.
|
| Compare that with introduction of Bitcoin - which was money
| from the moment it was created. Because Bitcoin was about money
| since the beginning, it also attracted those bad actors from
| the beginning. However, the Bitcoin paradigm is different.
| Instead of being connected to the existing financial system,
| it's a self-contained Internet-native system where the
| responsibility of security is put (to some degree) in the
| user's hands. But we users are a bit lazy, especially after
| being hand-fed dumbed-down UX for decades. That makes us
| vulnerable because we trust instead of verify. But Bitcoin
| teaches us to learn, to understand, and hopefully to be more
| responsible.
|
| I believe that Bitcoin and it's derivative technologies have
| created something akin to a bug zapper. It attracts bad actors
| like nothing ever has before. And the only viable retort is to
| improve technology and educate - the opposite of the
| traditional system where we give the state a monopoly on
| violence and then ask them to fix it for us.
|
| If you look over the history of cryptocurrency, you'll see a
| history of rising and falling value and popularity tied to
| hacks, exploits, crimes, scams, etc. Often, the news declares
| the end of the entire enterprise. Yet, each time, the scene not
| only comes back - it comes back stronger.
|
| What I see is greed and wealth attempting to exploit Bitcoin
| the way the traditional system gets exploited - but always
| failing in the long run. And with each failure, the wealth in
| play gets absorbed into Bitcoin. Meanwhile, we continue to
| harden and improve Bitcoin and the ecosystem around it. In my
| mind, it's like a worm that is slowly eating the world's wealth
| through an ongoing interaction with bad actors. I do not
| believe it can nor should be stopped.
|
| So this idea that crypto is inherently a scam is the result of
| scammers being drawn to crypto. It's easy for the public to
| believe this. But Bitcoin and things like it are, in my
| opinion, the medicine we need to move through this and on to
| something else.
| mikhael28 wrote:
| What was the last thing you bought with Bitcoin or Lightning?
| That was over the nominal value of $1?
| hn_throwaway_99 wrote:
| On one point, I fully agree with you - the whole purpose of
| regulations is to stop schemes from getting out of hand
| _before_ the money is gone, because once it 's gone, it can't
| usually be recouped.
|
| But that said, I feel something is fundamentally lacking in our
| education system that people were convinced to put money into
| this shithole because Matt Damon or Tom Brady or Giselle
| Bundchen said it was a good idea. I mean, I have sympathy but
| part of me is like "Stupid is as stupid does". When celebrities
| started hawking crypto, it was the definite equivalent of "shoe
| shine boy giving stock tips" to me.
| LawTalkingGuy wrote:
| > It never had a real use outside of scamming people and buying
| illegal shit
|
| HashCash was invented to make spam expensive and save email.
|
| > Everyone was yelling at people to hold. Don't spend it, it
| will go to the moon!
|
| No, most of us "in the community" were having fun buying pizzas
| with it. The vast majority of the people involved early started
| for the features it unlocked, we didn't foresee being able to
| ride it to riches like this because nobody could picture our
| families using it or putting money into it. We thought it would
| remain a protocol-level thing.
|
| > And sure it keeps your money away from the spooky scary
| government.
|
| Horses for courses. I like having some "untraceable" internet
| money for buying things overseas, like servers, etc. If I
| wanted to have posters put up in Moscow I could find and pay
| someone in BTC but not from USD.
|
| > But I prefer my government insured bank account using a
| government managed currency and recourse for any scams/hacks
| that might happen to me.
|
| Generally, yes. Modulo inflation, "haircuts", forced
| confiscation, looking suspicious because you have too much
| money, etc.
| b0sk wrote:
| As long as there are a) scammers and b) people willing to
| invest in scammy things, these sorta things never die. They'll
| learn and adapt and come up with newer ways. Still the cynicism
| towards crypto on a whole is healthy and a much needed thing we
| need.
| philippejara wrote:
| As it stands, without crypto, you are pretty much a hostage to
| visa, mastercard, discover, and amex to exchange money
| effectively, and those companies are opinionated to a
| disturbing extent about who they deny business with when it
| comes to something so important.
|
| While those companies are not operated as some sort of common
| carrier of transactions crypto is essential for a free global
| society.
|
| Apparently Trump of all people actually tried to make it so[0],
| but Biden seems to have taken it down.
|
| [0]: https://archive.is/wrpvO
| SoftTalker wrote:
| What happened to cash?
|
| While I don't use it a lot anymore myself, I'm struggling to
| think of any service or product I use whose provider would
| not happily accept cash as payment. There are more than a
| couple of small restaurants here that only accept cash. My
| barber only accepts cash.
| BeFlatXIII wrote:
| Payments to remote distances become cumbersome.
| web3isgoing wrote:
| Depends where you live. Most developed countries are moving
| away from cash. Some already have.
| DennisP wrote:
| Cash is risky for any business or charity that's not
| physically nearby.
| bombcar wrote:
| Somewhere between "internet nerd project for buying drugs" and
| "every single Super Bowl ad" regulation should have stepped in.
|
| That kind of shit gives the scams a legitimacy they can't buy
| otherwise.
| pessimizer wrote:
| And by definition, a Ponzi must continue to expand, and
| expand quickly. Regulators are literally waiting until cyrpto
| completely runs out of possible new customers to intervene.
| The government is _maximizing_ the damage that crypto does.
|
| Thank god we haven't gotten to crypto for kids yet, but
| crypto bonuses on credit cards is getting very close.
| bombcar wrote:
| The government moves very slowly and basically waits until
| the problem is over before regulating it.
| Ferret7446 wrote:
| As it should. The problem with government is that it
| lacks perfect knowledge, which would only be exacerbated
| by acting too early.
| majewsky wrote:
| > The problem with _entities_ is that _they lack_ perfect
| knowledge, which would only be exacerbated by acting too
| early.
|
| FTFY. Nothing about this is exclusive to governments.
| MivLives wrote:
| 2017. That last crypto boom. After that whole run we should
| have probably looked into more regulations.
| manofmanysmiles wrote:
| So bad people did bad things to stupid people using made up
| numbers, so people with guns should take other made up numbers
| and give them to people with guns, and tell the people with
| guns to make sure the bad people don't do bad things to the
| stupid people, because they know what's best for them because
| they're too stupid and incapable of becoming strong enough for
| the big scary world?
| azangru wrote:
| > so people with guns should take other made up numbers and
| give them to people with guns, and tell the people with guns
| to make sure the bad people don't do bad things to the stupid
| people
|
| I think people who are doing the telling actually don't have
| guns; but are sitting atop a made-up hierarchy.
| manofmanysmiles wrote:
| This is true. However, the people with the guns believe in
| the hierarchy so effectively the people doing the telling
| have the force of violence behind their words.
| [deleted]
| parker_mountain wrote:
| Despite your tone, actually, yes.
| danans wrote:
| > I do hope it dies out, it should have been heavily regulated
| from the get go.
|
| On the other hand, if it had been heavily regulated from the
| get-go, there would be tremendous pressure to bail it out now,
| so maybe it's for the best that it wasn't regulated by the
| government.
|
| It would have been nice if there was a countervailing force to
| the billionaire-savior cults promoting it, but unfortunately
| our media environment promotes those ideas rather than combat
| them.
| PragmaticPulp wrote:
| > On the other hand, if it had been heavily regulated from
| the get-go, there would be tremendous pressure to bail it out
| now, so maybe it's for the best that it wasn't regulated by
| the government.
|
| This isn't true at all. The FTX collapse is more akin to
| something like Madoff's Ponzi scheme, which was significantly
| larger and did not get a bailout.
|
| The financial bailouts you're comparing this to were mostly
| loans that were paid back with interest, which init
| equivalent to the government handing money over to compensate
| for someone's fraud.
|
| The idea behind the regulation would be to prevent these
| situations from becoming so large in the first place. FTX
| deliberately avoided locations with regulation so they could
| perpetuate their fraud. So, no, regulations in the US would
| not have impacted how FTX operated in the Bahamas nor would
| they have any interest in bailing out a foreign company.
|
| Finally, regulation doesn't _cause_ bailouts. There's no rule
| that says regulated industries get bailouts while unregulated
| industries don't. You're conflating two completely different
| topics and trying to pass them off as one in the same.
| bergenty wrote:
| Outside of cash there needs to be a viable method to do
| anonymous transactions- be it illegal or not. I don't think
| crypto is going away for this reason alone.
| eldaisfish wrote:
| Cash is backed by the military force and economic heft of the
| country issuing it. For an alternative to exist, it must
| first and foremost be able to hold its value reliably and
| that is precisely the niche filled by gold.
|
| Crypto will never fill that void.
| BeFlatXIII wrote:
| > trusted celebrities on an ad
|
| A fool and his money...
| davewritescode wrote:
| I hope it is but I suspect it won't be.
|
| The bottom line is that the benefits of crypto have been
| exaggerated by people who, in may cases, don't have everyone's
| best interest at heart while the downsides have been vastly
| understated. It's particularly frustrating to hear people tout
| the ability to bypass the government when it fact that the most
| popular cryptocurrencies make it trivial for governments to track
| every transaction.
|
| The reality that crypto evangelists never want to talk about is
| that to the average person, crypto is a MUCH worse experience
| than what they have today. Why would I buy something with crypto
| when my credit card offers me a ton of consumer protections?
| Especially if I'm buying something from an entity on the internet
| who may or may not be trustworthy.
| sys_64738 wrote:
| Did anybody on here make any $$$ from crypto? It was all a scam
| in my eyes so I just focused on VTI.
| mmkos wrote:
| Yes. I made $30k by selling dogecoin that I bought all the way
| back in 2014. Not a fortune by any means, but a respectable
| amount nonetheless.
| jobs_throwaway wrote:
| I've bought a lot of cool (illicit) stuff using crypto, and my
| investments in it are still massively up
| giantdude wrote:
| I hope it's the end of centralized exchanges.
| m00dy wrote:
| No, There is no entity to bail out corrupted, centralized crypto
| exchanges. The philosophy is that what doesn't kill you makes you
| just stronger. So, Crypto will come back stronger than ever.
| Nothing is too big to fail in crypto, unlike cancerous financial
| institutions in the current system
| colesantiago wrote:
| Yes and it should be the start of the complete downfall of
| Crypto.
|
| So sick and tired of this absolute grift, it always 100%
| guaranteed ends in failure.
| meehow wrote:
| Fractional reserve is a scam, not crypto. Every institution which
| doesn't have money which they promised to keep safe, should
| collapse. Proof of reserves and audits are extremely easy in
| crypto and it doesn't require any regulations. Self custody of
| crypto is also pretty simple. Market is young, people greedy and
| as a result we got this domino of falling companies. Even after
| Mt. Gox collapse people didn't learn much, but I quietly hope it
| will come.
| AlexandrB wrote:
| > Market is young, people greedy and as a result we got this
| domino of falling companies.
|
| People are always going to be greedy. I'm not sure what you
| think will change in the future that will make large actors in
| the cryptocurrency space behave any more ethically.
|
| > Proof of reserves and audits are extremely easy in crypto and
| it doesn't require any regulations.
|
| A. So why is no one doing them regularly?
|
| B. Is "proof of liabilities" similarly easy? What stops a
| company from taking out a massive loan "off blockchain" using
| their blockchain assets as collateral?
| audunw wrote:
| > Fractional reserve is a scam, not crypto.
|
| Why? Because you say so? Fractional reserve banking is
| generally heavily regulated such that most of the value created
| from new loans are tied to actual physical value in the real
| world. Fraction reserve banking is genius in my opinion,
| because if you want to take out a loan to build say a mine, or
| an oil well, that you know is going to generate millions in
| value, you're not fully dependent on finding smoe kind
| benefactors to loan you their own money to open that mine. If
| you can prove to the bank that you are likely to be able to
| create value greater than what you're borrowing, they'll create
| that money for you. And that's how it should be. If you're
| adding say $10 million to the economy, it's not a problem at
| all that $5 million was created out of thin air to enable that.
| In fact, that's exactly what you want. Ideally nobody who is
| able to create significant value should be stopped just by the
| lack of capital.
|
| There are cases where lending isn't tied to value creation,
| like loans for consumption or stock gambling. Those should be
| regulated out of existence, but that's not fundamentally a
| problem with fractional reserve banking.
|
| Loans for purchasing land is also iffy.. I think Georgism may
| be a solution to that.
|
| Crypto is the exact opposite of a well regulation fractional
| reserve banking system. The creation of cryptocurrencies,
| espcially with PoW, is tied to the _destruction_ of value
| (wasted electricity and silicon), not creation of value. IMO,
| that makes it fundamentally unsustainable.
|
| > Proof of reserves and audits are extremely easy in crypto and
| it doesn't require any regulations.
|
| You say that, but everything we've seen so far indicates the
| exact opposite. Perhaps it's easy in theory, but nobody seems
| to be interested in doing it.
|
| I suspect with all the regulations, external systems and
| oracles necessary to make sure it's all correctly audited,
| you'll find that you could just as easily do without a PoW/PoS
| blockchain and have a far more efficient system. Maybe a proof-
| of-authority blockchains can make sense, just so you have some
| explicit cryptographically signed trace of who you're trusting
| in a transaction. Trustless systems are a lie. You'll always
| find you need to trust some humans/organization in the end.
| RandomLensman wrote:
| Fractional reserves does not mean there are no assets vs the
| deposits.
| AzzieElbab wrote:
| I love the tech but I keep looking at crypto as a financial
| system build on nothing and backed by nothing. Financial system
| is a luxury that has to be a functional layer build on top of
| some economy but crypto is so standalone it is basically only
| supported by peoples interest in it. They forgot to build the
| economy and went straight to money and finance
| SevenNation wrote:
| > The disappointment is that, 14 years after the Bitcoin
| blockchain was invented, little of this promise has been
| realised. Crypto's frenzy drew in talent from bright graduates to
| Wall Street professionals, and capital from vc firms, sovereign-
| wealth and pension funds. Vast quantities of money, time, talent
| and energy have been used to build what amount to virtual
| casinos. Efficient, decentralised versions of mainstream
| financial functions, such as currency exchanges and lending,
| exist. But many consumers, fearful of losing their money, do not
| trust them. Instead they are used to speculate on unstable
| tokens. Money-launderers, sanctions-dodgers and scammers abound.
|
| Here's the thing: Bitcoin doesn't need you, Mr. Entrepreneur. It
| doesn't need your black turtleneck savant charisma. It doesn't
| need your ambition. It doesn't need your "innovation." It doesn't
| need your groveling before regulators to build your moat. And
| most of all, it doesn't need your VC money.
|
| This is a problem for said entrepreneurs and VCs. Because they
| have turtlenecks beanbags, money, innovation, and groveling just
| burning holes in their collective pockets - waiting to find an
| outlet.
|
| But it turns out that "crypto" and "DeFi" do need Mr.
| Entrepreneur and his merry band of VCs. A lot. Why? Because these
| are efforts to replicate the existing financial system on the
| sandy foundation of "blockchain." And that's an expensive
| business.
|
| Toss in the loosest monetary policy in US history and the recipe
| is complete. A quorum of charismatic entrepreneurs fleecing
| gullible VCs and depositors out of fake wealth, tossing it into a
| big pile, dousing with a liberal quantity of gasoline, and
| setting the entire thing ablaze.
|
| This may or may not be the end of "crypto," but Bitcoin continues
| to operate just as before - without the need for exchanges,
| regulators, entrepreneurs, financiers, or visionaries.
| efficax wrote:
| > This may or may not be the end of "crypto," but Bitcoin
| continues to operate just as before - without the need for
| exchanges, regulators, entrepreneurs, financiers, or
| visionaries.
|
| Bitcoin absolutely needs exchanges. Sure, it's a self contained
| decentralized system that could keep churning along without
| needing anything but computation and the internet, but the day
| you can't exchange btc for fiat is the day bitcoin goes back to
| 2010, when it was a curiosity that isn't useful for much of
| anything. The only reason crypto is interesting to anyone
| except the most true of true believers is that you can exchange
| it for real money. What is the _point_ of it without exchanges?
| lupire wrote:
| What is Bitcoin _doing_ while it operates?
| sjsdaiuasgdia wrote:
| Here's the thing: the public doesn't need Bitcoin. The public
| needs quite a few of the services and functions that the
| existing financial system provides. Bitcoin on its own is
| unable to provide many / most of these.
|
| The last handful of True Believers can shuffle Bitcoin among
| themselves indefinitely, this is true. But does that have any
| more significance to the world than a multiplayer game someone
| creates for only them and their friends to play, handing game
| items back and forth among themselves?
| honestduane wrote:
| I can only hope crypto dies soon.
|
| Its actively a violation of the GDPR and this illegal in the EU.
|
| It violates human rights laws, including privacy laws, and is
| this illegal in most other places.
|
| It violates all the laws around SWIFT, at the international
| level, so its illegal under these laws.
|
| It never should have existed. Its a grift and a scam; Even NFT's
| vanish when the host doesn't want the expense of hosting other
| peoples images.
| j0hnyl wrote:
| How does crypto violate gdpr?
|
| It's pseudonymous so no PII.
|
| What privacy laws does it violate?
|
| On-chain NFTs will not vanish.
| kirevmaco wrote:
| > It violates all the laws around SWIFT, at the international
| level, so its illegal under these laws.
|
| But SWIFT itself is working with a "crypto" project:
|
| https://www.msn.com/en-us/money/smallbusiness/swift-is-partn...
| nineplay wrote:
| I'm not a crypto user so I may not understand the ramifications,
| but while I can see why "imminent death of crypto" headlines seem
| like clickbait, is it fair to say that this is the end of the
| crypto exchanges? This is the end of the your average Joe
| investing in crypto because they saw a cool ad during the Super
| Bowl?
|
| I could understand how that would translate to "gone" in the
| practical sense. There will still be the true believers and get-
| rich-quick believers and criminals, but it will be completely out
| of the public's view. No more ads and stadiums and F1
| sponsorships.
| [deleted]
| TacticalCoder wrote:
| > ... is it fair to say that this is the end of the crypto
| exchanges?
|
| I think it's fair to say that exchanges and websites promising
| 8% or 15% year-on-year returns are done. They're not coming
| back any time soon. They'll now be called out by everybody. And
| probably legislated out of existence too.
|
| But the end of Coinbase? Coinbase seems legit. Sadly for them
| the very _bank_ they 're using, Silvergate (ticker SI), may be
| a goner. So USDCs emitted by Coinbase may or may not be
| worthless (and moreover seizable by the state to bail out
| Coinbase investors before Coinbase customers).
|
| I'd like to see how exposed to Silvergate Coinbase is.
|
| I hope Bitfinex dies a painful death. I hope Binance crashes
| and burn.
|
| I hope every single exchange accepting USDTs falls.
|
| But I do hope Coinbase, a HN unicorn, survives.
| curioushacking wrote:
| As a general financial instrument there seems to be too large an
| opportunity for fraud and scams that it seems to generally not be
| worth it outside of hedges against hyper inflation.
|
| But the general idea of web3, personal ownership of data that you
| can seamlessly move to different interfaces, and as a way to
| trust documents still all seem like great reasons to have public
| ledgers. This may not be in the currency space, but I feel like
| general crypto is something I would like to see in the future.
|
| I also love the idea of moving fully to stable coins for better
| tracking related to tax implications. I'm not sure of how this
| would work fully, but there seems far too much opportunity for
| tax evasion and fraud under the current systems and moving to a
| stable coin seems like it could aid in that regard.
| [deleted]
| grzes wrote:
| i would say that it is just begining
| sgt101 wrote:
| There will be another go around - at least one.
|
| Next time will be different(TM) There will be a new breed of
| crypto entrepreneurs(TM). There will be a new generation of
| smarter, more savvy, sophisticated investors (TM). Everyone will
| wear crisp white cotton this time. They will be blonder, or
| darker, or more vegan.
|
| The wheel will spin again, some people will steal some money off
| other people who will loose everything.
| wzy wrote:
| MLM and Ponzi are is still going strong, so crypto has nothing to
| worry about.
| eddsh1994 wrote:
| People say this every bear market. We will be hearing this again
| in a few years after it goes up and back down again.
| boringg wrote:
| Curious what Chris Dixon and A16z have to say about it.
| jdminhbg wrote:
| Something like this, most likely:
| https://www.semafor.com/article/11/16/2022/andreessen-passed...
| boringg wrote:
| Sounds like it didn't pass the sniff test with them.
| k__ wrote:
| The sentiment "inside of crypto" seems to be "The MtGOX collapse
| was worse"
|
| Less money, but overall bigger negative impact.
| dudeinhawaii wrote:
| The end of crypto? No. But could it become the Magic Cards, AOL,
| or MySpace of this generation? Sure. They may even have the
| staying power of MLM companies like Amway.
| sbf501 wrote:
| "There's a sucker born ever minute."
|
| So, no, not the end.
| violiner wrote:
| > Never before has crypto looked so criminal, wasteful and
| useless.
|
| That's really saying something!
| doc_gunthrop wrote:
| Another case of Betteridge's law.
| ryanSrich wrote:
| If I had a nickel for every time the MSM called the death of
| crypto I'd probably be able to buy one bitcoin by now.
| throwaway743 wrote:
| Seriously. This has been asked and called time and time again,
| but has been proven wrong each time
| pessimizer wrote:
| It has that in common with everything that has ever failed,
| in that none of those things had ever failed before they
| failed.
| lupire wrote:
| Ah yes, the logistic fallacy. There are always new people to
| rope in, the world's population is not finite.
| smithcoin wrote:
| Which will come first: the year of the linux desktop, full self
| driving teslas or the death of crypto?
| strix_varius wrote:
| Hell, we're already in the age of the linux desktop, we're just
| not calling it that:
|
| > At 37 million units, Chromebooks represent just under 11
| percent of the total PC market, ahead of the Mac, with 27
| million units and a 7.8 percent share.
|
| https://www.thurrott.com/mobile/chrome-os/chromebook/262126/...
| fsflover wrote:
| Time to talk about Linux on mobile perhaps.
| MrMan wrote:
| self-murdering crypto on the desktop is already here, so
| ploppyploppy wrote:
| No
| Bhurn00985 wrote:
| Are we already seeing the positive impact on total energy
| consumption levels ? What a waste this has been.
| revskill wrote:
| Yes, end of a circle for a new circle ;)
| jpadkins wrote:
| my take: crypto (PoS shitcoins) will take a hit, bitcoin comes
| out looking better than ever.
| etskinner wrote:
| https://archive.ph/coBBz
| mjburgess wrote:
| Piggybacking on this link, since many seem not to have read the
| article.
|
| But this is one of the most pro-crypto articles I've ever read.
| It may as well be a submarine, in the PG sense.
| willio58 wrote:
| Most crypto-related projects are scams or money-rushes. But SOME
| will survive and be built after this with all of the learnings of
| the past few years. This is all very reminiscent of the dot com
| crash and how media was talking about the internet during the
| crash. If things follow that same path for crypto, this is really
| just the beginning of crypto.
| ilrwbwrkhv wrote:
| I think more than anything, this has made a16z and Sequoia lose
| all their merit and credibility. They are now no more than some
| sneaky crypto grifters who can sneak off to Argentina or Dubai
| and their ideas and thoughts have zero intellectual value.
| ccbccccbbcccbb wrote:
| This is the final chapter of the blockchain story, created from
| the scratch by the bankers, who lured early adopters with ideals
| of anonymity, digital anarchy and other cryptopunk ravings, made
| them run the prototype of bankers' future monetary system at
| their own and later investors' expense, provided for schemes to
| make rich richer and poor poorer, made huge profits for the
| energy-generating companies, and what the economist really says
| now is a gloating 'thank you, nerds and wannabe-billionaires, you
| can now go to hell and don't mess in the way of us the big guys'
|
| Expect a world-wide blockchain-based banker-controlled
| centralized biometrically authenticated One World Currency soon,
| which you can loose access to for walking a red light, wearing a
| pajama in public, not joining the next scheduled Je Suis Charlie
| charade or refusing to jab.
| 1970-01-01 wrote:
| Here's how I see it:
|
| Crypto as an investment - Not your keys, not your coin.
|
| Crypto as a currency - I can't _directly_ buy food, water,
| shelter, transportation, energy, or anything fundamental with it.
|
| I know acceptance is growing, but 10+ years later, crypto still
| has extremely limited acceptance for daily goods and services. It
| is almost exclusively held as an investment.
| stephc_int13 wrote:
| This is not an investment because there is no asset behind it.
| (no production)
|
| It is a speculative vehicle.
| cynusx wrote:
| It's an abstraction of the stock market imo. People who
| bought and sold stocks also never understood there was
| something of value beneath it and just look for "is it going
| to go up?" and "why is it down?"
| philippejara wrote:
| The rights to Mickey Mouse are about as productionless as any
| crypto, and I'd struggle to find anyone that doesn't think it
| would be a great investment.
| rhino369 wrote:
| Disney makes Mickey Mouse cartoons and uses it as branding.
| It doesn't have value just because Disney thinks it could
| sell the rights for more later. In fact, they don't ever
| want to sell it.
| seizethegdgap wrote:
| Well, the Steamboat Willie version of Mickey Mouse will be
| entering public domain soon.
| ptudan wrote:
| I work for a crypto payments firm
|
| We're getting there and you can already use our product at 50k+
| stores in the US.
|
| Even in this market, merchants are still interested. We
| launched new ones this week.
|
| Comparing us to Visa or Paypal we are rinky dinky af, no
| denying that. But we are definitely growing.
|
| Your lens of investment vs currency is also very US based.
| Consider countries that frequently experience huge rates of
| inflation. Non-fiat money can be valuable for them.
| solumos wrote:
| I also work for a crypto payments firm
|
| There's a lot of interest in taking crypto payments
| mainstream, but large, established institutions are unwilling
| to expose themselves to the regulatory risk they would take
| on by building this stuff.
|
| A lot of these folks express extreme skepticism in the media,
| but are super willing to talk/partner in private.
| mattwest wrote:
| >I know acceptance is growing, but 10+ years later, crypto
| still has extremely limited acceptance for daily goods and
| services. It is almost exclusively held as an investment.
|
| Which makes sense considering its volatility. Why would I make
| transactions with a unit of currency that sees hundreds of
| percentage change over just a few years?
|
| And as others say, there is no real value to it other than
| speculation. This gets argued to death, but it's true. At least
| fiat has stability, and the USD is used to settle basically all
| energy (and most commodity) transactions. Do people actually
| expect the commodity market to be settled with crypto in the
| future?
| pessimizer wrote:
| > Why would I make transactions with a unit of currency that
| sees hundreds of percentage change over just a few years?
|
| Why wouldn't I? If I'm going to hold bitcoin for five
| minutes, what do I care how its price changes over years?
|
| The problem with bitcoin is that the technology is shit, and
| sucks for transactions, unless the world is prepared to only
| do like 50 transactions a minute.
| mattwest wrote:
| That's only considering the scenario of end-user purchasing
| and also not considering resale.
|
| Goods go through supply chains. Multiple transactions occur
| over a period of time in order to create a final good.
|
| Service industries need to supply themselves with various
| goods in order to provide their services. The cost of those
| goods are used to price their services. When there is huge
| volatility through these processes, things fall apart.
| ignoramous wrote:
| > _Crypto as a currency - I can 't directly buy food, water,
| shelter, transportation, energy, or anything fundamental with
| it._
|
| Cryptocurrency payments is a flourishing market, btw.
| Spivak wrote:
| Where? I don't mean this as snark. Are there any household
| brands that actually accept crpyto?
| livueta wrote:
| I think household brands are the exact opposite of where
| there's been movement: ime, it's concentrated in spaces
| where there's a need or incentive to dodge moralistic
| payment processing cartels. The classic example is
| obviously DNMs, but it is expanding into areas that are
| legal but difficult to process payments for, like firearm
| parts or porn. Since those payment processors are, if
| anything, getting more opinionated, I bet that trend will
| continue, along with the "I personally disapprove of or do
| not require the utility provided by the technology, so I
| will claim it has no utility at all" arguments.
| redox99 wrote:
| > Crypto as a currency - I can't directly buy food, water,
| shelter, transportation, energy, or anything fundamental with
| it.
|
| Not surprising, considering the technology isn't there yet.
| Scalability (and thus fees) are still unsolved. UX has so much
| to improve as well.
|
| It's advancing, but it takes time.
| bertman wrote:
| "Any headline that ends in a question mark can be answered by the
| word no." -Betteridge's law
|
| (Although in this case I wish the answer would be yes)
| cryptonym wrote:
| Another headline ending with a question mark:
| https://www.nasdaq.com/articles/will-crypto-recover-heres-wh...
|
| I think we hit a paradox.
| johnnymorgan wrote:
| This again...every single time we get the death of Bitcoin
| articles.
|
| And every single time the honey badger of financial networks just
| doesn't give a shit.
|
| The tech is solid, people are not, this is not a new information
| coffeeblack wrote:
| Another year, another "the end of crypto" craze.
| barbazoo wrote:
| I never know what people mean when they say "crypto". Are we
| talking about coins, de-fi, blockchain? Just yesterday I was
| presented with an option to pay for a standing desk in ETH and I
| don't see how FTX's downfall would change that. Is ETH just
| another scam? Very confusing stuff.
| dragontamer wrote:
| Fundamental issues of cryptocurrency economy:
|
| 1. Biggest pushers are seemingly tech-bros from FANG companies.
| These companies are laying off staff in record numbers. The
| biggest cryptocoin believers therefore, will have less income
| than ever before (in ~3 months or so, after their severance is
| paid, they'll have to start drawing on savings if they didn't get
| a job yet... and getting a job in this economy is going to be
| harder)
|
| 2. Fed Rate hikes. Cryptocoins and stablecoins (especially
| "staking" concepts) were rationally attractive when your savings
| account returned 0% and when Treasury Bonds were 0.1% to 1.5%. A
| risky yield-earning instrument may have been... erm... risky, but
| it seemed like even with the risks you'd beat a savings account.
| Today, HYSA savings accounts are 3% and the St. Louis Fed
| President argues they're going to 5%. Its a much more difficult
| to sell yield-making instruments (such as "staking" Ethereum)
| when the "safe" risk-free rate is at 5%.
|
| 3. Inflation. Instead of being a hedge on inflation, cryptocoins
| collapsed in the face of it. There are still inflation worries in
| the economy.
|
| 4. Mainstream awareness. Earlier this year, Cryptocoins bombarded
| the typical normie with advertisements. Matt Daemon said "Fortune
| favors the bold" for Crypto.com. FTX had Larry David do ads for
| them. FTX bought out the Miami Heat stadium naming rights. NFTs
| were on talk-shows, being shilled by Jimmy Fallon and Paris
| Hilton. Cryptocoin's era of growth is over, everyone is now
| "aware" of cryptocoins and adjacently NFTs. Entering the public
| consciousness only happens once, from now and forever more,
| people are "aware" of cryptocoins and have formed opinions on it.
| It will not happen again.
|
| 5. Scammy reputation. The Celsius and FTX bankruptcies are in the
| public consciousness. (See #4: for many people, FTX was the
| public face of cryptocoins thanks to their superbowl ads). That
| these institutions couldn't even last 1 year after their
| commercial will forever damage cryptocoin reputation. Sure, Mt.
| Gox had similar issues back in 2014, but Mt. Gox didn't buy the
| naming rights to a stadium or host Superbowl commercials.
|
| Seeing cryptocoins grow under these circumstances seems like a
| longshot to me.
| TacticalCoder wrote:
| > 3. Inflation. Instead of being a hedge on inflation,
| cryptocoins collapsed in the face of it.
|
| I don't disagree with the other points but... That one remains
| to be seen. Bitcoin was precisely created as a gigantic middle
| finger to the central bank's endless money printing to bail out
| the financial system. That's the message in the genesis block
| ("Chancellor on the brink of second bank bail out": it's as
| political as it gets). The early adopters, before the poker
| players (Bitcoin was used to facilitate players-to-players
| transfer on poker sites before Silkroad and drugs where I thing
| IIRC), were libertarians and anarchists fed up with the FED.
|
| This hasn't changed, so far. There are only going to ever be 21
| million Bitcoin. Ethereum, at the moment, is deflationary (more
| ETHs are burned than created through proof-of-stake).
|
| You get, what, 5% on your USD: great. But real inflation is,
| say, 12%. So that's still 7% down.
|
| There's a price at which people are going to enter BTC and
| Ethereum with the promise that it won't be inflated to death.
|
| Many may not like it. _" Inflation in the two digits, good!.
| Helicopter Ben: savior of the economy. Bank bail outs
| mutualizing losses: perfection by our beloved state!"_.
|
| But there are still people out there who see the value in
| something that cannot be printed at will.
|
| I'd say _especially so_ when the FTX and Tether of this world,
| at times in bed with officials, are printing at will their
| worthless token and dumping them on retail with the blessing of
| the New York Times.
|
| > There are still inflation worries in the economy.
|
| Precisely.
|
| I'm certainly not keeping all my life savings in
| cryptocurrencies. I was all in cash after the war in Ukraine
| started and I'm certainly enjoying the firesales on many stocks
| right now (Stanley, Makita, ASML, Intel, 3M and a shitload of
| stocks I handpicked are totally on sale: it was time to sale
| when everybody was yelling "TINA" and the war in Ukraine
| started and it's time to buy now that everybody is yelling
| "falling knifes, it may fall another 90%"... Yeah, sure. If all
| the companies I handpicked are falling 90% more, I'll load up
| the truck and retire in a fancy yacht in a few years).
|
| But this entire USDT/FTX scam (with the blessing of the SEC and
| CFTC), these shitty tokens created out of SBF's farts (sorry
| but it's how it is) and these centralized exchanges makes me
| want to go bullish on BTC / ETH. I'm waiting for tether to go
| bust to go in bigger.
|
| Many hate it here: BTC may not be worth much but "your keys
| your coins" and as long as it's not totally outlawed, nobody is
| going to prevent me from storing BTC (mo matter their value) on
| a hardware wallet.
|
| And f--k fractional reserve banking, f--k bail-ins (Cyprus), f
| --k the vicious states stealing people's money (Spain, where
| banks offered crazy return rates to their customers then
| defaulted on the principal) and certainly f--k mutualized bank
| bailouts.
|
| I have zero confidence in USD / EUR. I have zero confidence in
| banks. I believe in stocks and, yes, in BTC and ETH on my own
| hardware wallet.
| ManuelKiessling wrote:
| > I have zero confidence in USD / EUR. I have zero confidence
| in banks. I believe in stocks and, yes, in BTC and ETH on my
| own hardware wallet.
|
| I'm eager to learn at which institutions you plan to buy and
| sell your stocks, and which currency you are planning to use
| to do so.
| dragontamer wrote:
| > You get, what, 5% on your USD: great. But real inflation
| is, say, 12%. So that's still 7% down.
|
| Sure. But lets say you put $100,000 into BTC last year,
| exactly 1-year ago. BTC's price on Nov 17, 2021 was $60,3xx
| or so. So you'd have 1.66 BTC. Today, that BTC is worth
| $16,650 or so. Or $27,639
|
| Then, real inflation is... I don't think 12% but I don't feel
| like arguing. So I'll use your numbers. According to your 12%
| inflation number, you're at $24322.32 in 2021 dollars.
|
| That is to say, if I stuck with US Dollars, I'd largely have
| most of my money. If you used BTC, you'd have lost most of
| your money.
|
| ---------
|
| We've had the big inflation event that the BTC community was
| "hoping" for for years. And BTC *FAILED* the test. Everyone
| who bet on an "inflation hedge" lost most of their money.
|
| > I was all in cash after the war in Ukraine started
|
| I bought oil. An oldie but a goodie strategy. Wars need oil,
| and Ukraine/Russia have substantial oil trade, so I knew that
| oil prices would rise.
|
| Also, because oil is a huge component of inflation, its...
| like... actually an inflation hedge? (EDIT: I guess others
| could have bought food futures, like grain and/or corn, given
| the huge amount of Farmland in Ukraine that's been hampered
| by the war, plus also as an inflation hedge since Food is
| another major component of inflation. That would have done
| well too)
| JohnFen wrote:
| So you're into it for political reasons as much as anything
| else?
| jimcavel888 wrote:
| latchkey wrote:
| ETH validators are around 8% right now, not 5%.
|
| The 'risk' is that the developers don't successfully implement
| withdrawal or that the whole network goes down. Two, imho, huge
| risks and part of the reason I don't personally stake at this
| time. That said, eip-1559 and 'the merge' did happen, without
| much of a hitch at all, which are pretty major accomplishments.
| Confidence in the developers is a bit higher now as a result.
|
| source: validator rewards section of https://ultrasound.money/
| colineartheta wrote:
| Care to comment on the Ethereum Foundation now removing all
| reference to a date in which "staked" ETH can be withdrawn?
| Or perhaps commenting on the fact that to become a validator
| requires 23 ETH, or approximately $28,000 of upfront
| investment that cannot be withdrawn in order to achieve your
| stated yield?
| dragontamer wrote:
| Indeed. It should be noted that the Fed Rate / Risk Free
| Rate / Overnight lending rate is... well... overnight
| lending. Its the rate you get for a 1-day loan for
| tomorrow.
|
| Its about as risk-free as you can get. So when the Fed Rate
| goes from 3% to 3.75% or whatever (for overnight loans),
| all other loans (ie: riskier 6-month, or 12-month, or
| 10-year, etc. etc.) have to go up in yields to compensate.
|
| -------
|
| Its difficult to compare Ethereum "staking" with
| traditional finance, because traditional finance has much
| better guarantees. My SWVXX and VMFXX money at 3.6% can be
| withdrawn (or deposited) at 5pm every business day. Its
| extremely liquid, far more so than Ethereum staking.
|
| Further adding to the complications, Coinbase allows you to
| trade cbETH (wrapped Ethereum), which is Ethereum that has
| been staked at Coinbase. Its not entirely clear when cbETH
| can be withdrawn and turned back into ETH.
| latchkey wrote:
| There are multiple liquid ETH staking pools where you
| deposit your ETH and get their token in return. You don't
| even need the full 32.
|
| https://ethereum.org/en/staking/pools/
|
| These tokens have also been trading at discounts to ETH
| if you want to just buy and hold the token, which should
| eventually reach parity to ETH. That can also be an
| additional gain, but incurs additional risk.
| dragontamer wrote:
| > which should eventually reach parity to ETH
|
| You're ignoring the issue here.
|
| When I'm talking Fed Rate, its _OVERNIGHT LENDING_. Its
| not "eventually reach parity with dollar", its "this will
| turn into a real dollar tomorrow". Its a loan that is as
| safe as you can possibly get.
|
| You're trying to compare Ethereum staking with the Fed's
| overnight lending. The risk/reward structures at play
| here are completely different.
|
| The Fed Rate is the shortest, and safest, loan in the
| entire marketplace. Ethereum staking is kinda similar in
| some respects (as a yield granted by the "Ethereum
| system" itself, its kinda sorta like a central bank
| rate), but it... really isn't. Because it has an ill-
| specified withdrawal time.
| latchkey wrote:
| > _You 're trying to compare Ethereum staking with the
| Fed's overnight lending._
|
| I don't know how you're drawing that conclusion from my
| comment.
|
| I am responding to your comment about coinbase and
| suggesting that they aren't the only product on the
| market. I also wanted to point out the fact that there
| are other actually liquid solutions to eth staking.
|
| The coinbase product is more like staking as a service,
| but centralized, and not recommended.
|
| https://ethereum.org/en/staking/#how-to-stake-your-eth
| latchkey wrote:
| 32 ETH
| kurtreed wrote:
| The end of cryptography? Somehow I doubt it.
| rvz wrote:
| Betteridge's Law of headlines suggests: No.
|
| So no, it is not the end of crypto, no matter how many scams,
| rug-pulls, bans, etc, etc.
|
| Sorry to burst the bubble and to give the answer you didn't want
| to hear, especially for those who have been begging for its end
| after 14+ years for it to all be banned and to be 100% totally
| shutdown.
|
| Crypto is here to stay.
| citiguy wrote:
| Wow, I never heard of Betteridge's law before, but it makes
| perfect sense. TIL something new!
| tabtab wrote:
| Evolution generally requires "extinction events" to shake things
| up.
| legutierr wrote:
| We are making steady and inexorable progress through the
| technology hype cycle.
|
| From earlier this year:
|
| https://emtemp.gcom.cloud/ngw/globalassets/en/articles/image...
|
| Now we enter the Trough of Disillusionment.
|
| Given the general accuracy of this model/metaphor in the past,
| should we consider it to be any different this time around?
| olalonde wrote:
| Because the "Trough of Disillusionment" has already happened
| 3-4 times...
| efficax wrote:
| This graph is missing a key aspect: the "it utterly fails and
| we never speak of it again" section.
| legutierr wrote:
| I imagine that would be your preferred outcome.
| efficax wrote:
| well i'd prefer if it had never gotten to where it is,
| because every crash in the crypto markets wipes out the
| savings of some sucker who didn't know better. that sucks.
| canadianwriter wrote:
| As others have said: what about the stuff that never catches
| on?
|
| 3D TVs AR glasses Luggage that follows you around phones with
| projectors built in Segway etc
| jmcphers wrote:
| The hype cycle is not applicable to every technology. Some,
| probably even _most_ , technologies are eventually found to not
| be useful or valuable, and never recover once the hype bust
| happens and the technology is forced to compete in the
| marketplace based wholly on its merits.
| legutierr wrote:
| Are you saying that crypto (or blockchain) cannot compete
| based wholly on its merits?
| bena wrote:
| Bitcoin survived MtGox. I'm sure crypto will survive to tulip
| another day.
| felipellrocha wrote:
| i see what you did there
| [deleted]
| throwup wrote:
| I'll add this to the list.
|
| http://bitcoinisdead.org/
| xtracto wrote:
| I prefer this one: https://99bitcoins.com/bitcoin-obituaries/
| TremendousJudge wrote:
| Some great content there. Randomly clicked at one reportedly
| from 2011[1]:
|
| >Beyond the most hardcore users, skepticism has only
| increased. Nobel Prize-winning economist Paul Krugman wrote
| that the currency's tendency to fluctuate has encouraged
| hoarding. Stefan Brands, a former ecash consultant and
| digital currency pioneer, calls bitcoin "clever" and is loath
| to bash it but believes it's fundamentally structured like "a
| pyramid scheme" that rewards early adopters.
|
| They were correct on both counts. Since then, proponents have
| simply stopped trying to sell it as a currency (buy your
| games in bitcoin! pay your rent in bitcoin! -- that was the
| initial pitch), and its pyramid scheme structure has only
| been exploited, not fixed.
|
| [1] https://99bitcoins.com/the-rise-and-fall-of-bitcoin/
| MacsHeadroom wrote:
| Great site!
|
| Looks like Bitcoin has been announced dead about twice a week
| since its inception!
|
| This will probably continue for the foreseeable future.
| colesantiago wrote:
| Looks this website is dead and gone, just like all the money
| people invested in FTX, crypto and bitcoin.
| WrtCdEvrydy wrote:
| I think it moved to the obituaries...
| jobs_throwaway wrote:
| my bitcoin is up a few 1000% actually
| z3 wrote:
| full article -> https://archive.is/coBBz
| agentultra wrote:
| It will continue to fall under increased scrutiny and market
| regulation until it's no longer profitable to run any kind of
| financial system on it.
|
| There will still be believers and people who will throw money at
| it and try.
|
| But I think they will have a harder time convincing investors
| going forward.
|
| I suspect it will end up mirroring the MLM market: still there,
| still profitable for a few, but depends largely on an uninformed
| base of people getting roped in by their friends and relatives
| who are already caught up in it.
|
| Like Avon but for tech bros.
| strix_varius wrote:
| I would argue it's already Avon for tech bros.
|
| That $10,000 Avon "investment" by a teacher making $30k is
| similar to a $100,000 crypto "investment" by a tech bro making
| $300k.
| agentultra wrote:
| Trying to imagine Bloomberg managing an Avon market analysis
| dashboard and reporting on every peak and drop.
| firmnoodle wrote:
| I look forward to the day when The Economist and FT don't
| conflate Bitcoin with all the crypto tokens out there.
| smileysteve wrote:
| No, but for retail, yes.
|
| It's going to be a long time before the retail $16bn + contagion
| try it again, and they probably won't trust it for growth,
| interest bearing accounts; It also may not be needed for interest
| bearing accounts as the Federal Reserve seems to be on a path to
| offer meaningful rates for the long term.
|
| So it's likely the end of mass market crypto? or effective
| advertising for major sporting events (F1, Miami Heat, LA)
| achenatx wrote:
| crypto is supposed to be money that is outside the control of
| central banks or governments.
|
| As a result it is good for:
|
| Getting your money out of a country that is trying to stop you
| from doing that
|
| Transferring your money across borders when the government wants
| to impose high tariffs
|
| Protecting your money from central banks when governments have
| decided to freeze your bank accounts
|
| Protecting your money from a government that reckless with the
| native currency where you have no way to have accounts to store
| large amounts of foreign currency
|
| You might say that this only applies to criminals, but the
| definition of criminal might just be whoever happens to be a
| target of a government. Many governments around the world are
| dictatorships and can decide to confiscate assets on a whim (e.g.
| china).
|
| When the jews fled germany or the chinese fled communist china,
| they took what they could (often times gold or gems). Crypto is
| potentially a way to flee a bad situation while avoiding being
| robbed by carrying your wealth as gold.
|
| Finally it would be interesting if BRICS started transacting oil
| in crypto. It would be a way to possibly break the US dollar as
| the world reserve currency.
| bearjaws wrote:
| Didn't blow up enough to scare people away long term, it will be
| back soon enough.
| varispeed wrote:
| This is coming up every now and then that Bitcoin is no more.
| This video is still relevant:
| https://www.youtube.com/watch?v=XbZ8zDpX2Mg
| ryanSrich wrote:
| Exactly. FTX.com wasn't even legal in the US. The Terra/Luna
| crash was WAY worse for people, and that didn't do much to
| scare people away.
|
| BTC has held above $16k, which is really saying something
| considering the circumstances.
| yieldcrv wrote:
| A bunch of crypto-coins held up off the market with
| bankruptcy trustees for the next decade?
|
| Heck, Mt. Gox hasn't even paid out yet!
|
| Crypto is dead until your neighbor that is dumber than you
| starts getting richer than you, _again_!
| lupire wrote:
| BTC, A deflationary currency that lost 75% in value in a
| year, despite all the problems coming from projects that
| aren't even BTC.
| WrtCdEvrydy wrote:
| > A deflationary currency that lost 75% in value in a year
|
| I don't know, my BTC is still worth one BTC.
| reducesuffering wrote:
| That is sure to comfort you if it buys the equivalent of
| a candy bar.
| WrtCdEvrydy wrote:
| At $15/each, by the time we get back down to $15/BTC
| maybe it will buy me a candy bar.
| [deleted]
| hellotomyrars wrote:
| And what are you going to do with it that isn't based on
| it's value relative to fiat currency?
| WrtCdEvrydy wrote:
| Stare at it on my phone.
| rhino369 wrote:
| You should work for the white house.
|
| What inflation? 1 USD is still 1 USD.
| amanaplanacanal wrote:
| Well sure. And one Papiermark is still worth one
| Papiermark.
| tromp wrote:
| I believe BTC won't drop below $9k until Tether collapses.
| That will be a day worth celebrating...
| jayd16 wrote:
| What's significant about $16k?
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