Crypto currency: What are your thoughts?

[Bicurico]

Hi,

I am a 51 years old engineer.

I worked with computers since I was 10 years old and still today I spend most of my time with technology: CAD/CAM/CAE, CNC, CMM, but also spectrum analysis, TV, CATV and SAT reception and distribution, emulators, electronics, etc.

Yet, I have to confess that I suddenly feel like being part of the "old generation": my younger coleagues at work (former students of mine), in their late 20ies, early 30ies, all use some form of crypto currency. They have credit cards linked to their crypto wallet, they invest some of their money in Bitcoin, Dodgecoin, Ethereal, etc. They talk about their portfolios and basically consider all of that normal.

I, on the other hand, have my money sitting on a bank account without any application (the time to read the contract is more valuable that the interest rate offered). I don't invest in the stock market, either.

The only thing I have done is to invest in real estate.

The reasons for being so avid against investing in crypt currency or stocks is that I cannot afford to lose the little money I have.

But, I could, like my colleagues, take up to 1000 Euro play money and do investments. Yet, somehow I never done it.

But now I am reading more seriously into this new financial world and my conclusions are:

1) Bitcoin does seem like a pretty good Ponzi scheme.
2) I wonder were the different wallet providers get the money to pay 10% to 16% interest rates from?
3) It sounds all so easy, yet so complicated and obfuscated: it is hard to really understand what is behind it, even if the currency is based on "open source".
4) I roughly understand what a blockchain is, but then, do I really? Does the broad public investing in crypto currencies really know what a blockchain is?

Take a look at www.helium.com. They have their own crypto currency HNT and you can mine it by providing a gateway for LoRaWAN. The point is that instead of solving math problems to earn crypto coins, you provide a "useful" contribution to LoRaWAN coverage. But: where does the money come from - up to 500 Euro/month per gateway? Why are the gateways so expensive (100 Euro hardware sold for 600 Euro with huge waiting lists, or buy it from scalpers for 1.500 Euro right away)?

I really would like to know what you guys think and do regarding crypto currency.

Thanks,
Vitor

[ataradov]

Here are my thoughts - crypto currencies are a scam. Take helium. What does use of crypto achieve here? Can they not call it "loyalty points" and add them to the users account just like we did for decades? And this is the case for 99% of crypto currencies. Helium are actually on the right track here, the money comes from the fact that company itself does not have to put up those gateways (the first version of the gateway they were actually giving away for free to seed the market, since their business is the modules for end devices). And you are not getting $500/mo, unless you are in a heavily trafficked area. And once they know what areas are heavily trafficked, they will install their own gateways there, those minimizing your earning potential.

They obviously did it as a way to attract idiots that are now buying up all those gateways and setting them up without having any understanding of what is going on. As usual, some will make some money. Majority will lose. In this case scalpers will benefit the most, cashing in on the hype.

I really don't see what problem do they solve. Ok, you can't mess with transactions. Did we have a problem with the real banks with relational databases mess with transactions? I don't think so.

And if crypto currency were to be adopted as a national  currency, it would have to be under the complete government control, so it just turns into more expensive to run database. I'm excluding pathological cases like Bolivia, where it really does not matter what you do, it is all bad.

My real hope is that this forum is not full of cryptobros and this will not turn into a traditional crypto circle jerk.

[Johnny10]

The OP made his own best point... I can't afford to lose the money.

Enough said.

Play Red on the roulette wheel if you want to take a chance.
You will either win or lose and you will know right away.

[eti]

Fairytale "Money" 

[nali]

Fairytale "Money" 

OK then, so what is "real" money? Mine just says the bank promises to pay me on demand... good luck going down to your local bank (if you can find one now) and getting your £1 worth of <whatever> 

I agree with Johnny10 though. If you want to play, only invest what you're prepared to lose. Sure, crypto has its place and will ultimately be the enabler for other stuff but an investment in current times? nah.

[ataradov]

OK then, so what is "real" money?

That is debatable, but it is pretty clear that crypto currencies are not better in that respect than any other real-world money. And anyone who claims otherwise is either an idiot or tries to take advantage of other idiots.

[Cerebus]

OK then, so what is "real" money? Mine just says the bank promises to pay me on demand... good luck going down to your local bank (if you can find one now) and getting your £1 worth of gold 

What gold? Britain has had a purely fiat currency since coming off the gold standard in 1931. If you went to the Bank of England and demanded they made good on the promise printed on the note they would give you ... another note or perhaps some £1 or £2 coins.

[Bud]

It is a highly speculative instrument at this point in time. Many coins and tokens do have utility value (designed to solve specific problems) and many do not.   If you have fear to lose your investments and have short-time expectations, do not get into crypto.
In case you still have some money that you would like to grow long term and trust Warren Buffet's advice, consider investing in so called index funds.

[daqq]

There are real world applications for cryptocurrencies, though many of them are kinda on the naughty list. Possibly most - I do not know of anyone who actually traded anything other than other crypto or money for crypto.

1) Bitcoin does seem like a pretty good Ponzi scheme.

Fairytale "Money" 

At the end of the day, all money (whether fiat or representative) has value only because people agree that it (or what it represents) has value and therefore are willing to offer goods and services in exchange for said money. Whether the amount of money you have is represented by a number printed onto papers and coins in your wallet, a few kB of database logs in your bank or a few lines in a distributed blockchain database, the concept remains. And anything only has the value that a buyer is willing to trade for it, whether in goods, services or money. Given the "money printer go brrrrr" attitudes, I can see why people want a digital financial service that is not prone to state control and transparent-ish.
While I abhor the absolutely tremendously insane amount of power being consumed by bruteforcing cryptographic algorithms, I can see the value of the concept. Sadly, BTC came first rather than more energy efficient algorithms. And the whole thing devolved into speculative purchases rather than using it as an alternative currency.

[nali]

OK then, so what is "real" money? Mine just says the bank promises to pay me on demand... good luck going down to your local bank (if you can find one now) and getting your £1 worth of gold 

What gold? Britain has had a purely fiat currency since coming off the gold standard in 1931. If you went to the Bank of England and demanded they made good on the promise printed on the note they would give you ... another note or perhaps some £1 or £2 coins.

OK, strike the word "gold" [above post edited] which really only serves to reinforce my tongue in cheek question.

[Johnny10]

"real money" is a store of value.

Our members living in countries with high inflation may move there fiat currencies into gold, diamonds, emeralds to hedge against wild fluctuations.
Converting your inflationary susceptible currency into Crypto doesn't alleviate this problem, I suggest it often makes it worse.

Moving US dollars into Crypto doesn't make sense unless it is for speculation.

But let some of the Latin American members or others from high inflation problem countries tell us what they do when their local currency has 80% or more inflation.

[Whales]

Yet, I have to confess that I suddenly feel like being part of the "old generation": my younger coleagues at work (former students of mine), in their late 20ies, early 30ies, all use some form of crypto currency. They have credit cards linked to their crypto wallet, they invest some of their money in Bitcoin, Dodgecoin, Ethereal, etc. They talk about their portfolios and basically consider all of that normal.

Don't be sucked in by the psychology.  The world is a big place, there are lots of people that treat things as "normal" that you probably want to avoid. 

Pyramid schemes AKA multi-level marketing
Investing and controlling money of other family members
Lots of credit card debt across multiple cards
etc

Be wary of "fear of missing out" and "everyone else is doing it, I want to jump on the bandwagon".  These are strong motivators used by many companies to get people to do what they want and spend money where they want them to spend money.

To be brutally honest: if I wanted to get money quick, I'd target someone who identifies themselves "as part of the old generation" with an investment scam.  I'd show them growth rates, talk about how many other people my age are investing; if I tried enough targets it would probably eventually work (and would pay better than my current jobs).

3) It sounds all so easy, yet so complicated and obfuscated: it is hard to really understand what is behind it, even if the currency is based on "open source".
4) I roughly understand what a blockchain is, but then, do I really? Does the broad public investing in crypto currencies really know what a blockchain is?

Yes all the details matter.

In a perfect world markets don't have any hidden gotchas.  Things go up, things go down, you can put money in and take it out whenever.

In reality all "markets" have their own weird limitations that can trap you.

The bitcoin blockchain is very large, so most people trading it in don't directly run blockchain software on their own computer and instead get someone else to do it for them.  You give money to a company, they hold the coins for you, then they pay you back when you choose to sell the coins again.  Good luck suing/chasing them if they choose to misbehave. 

Bitcoin trading or holding companies do not even have to intentionally misbehave, bitcoins are a lot harder to "hold onto" than physical assets like gold because theft requires only a few small packets of data (micro-seconds of internet time) versus trucks, minis and explosives.  Some of the biggest bitcoin exchanges have collapsed because of hacks and others still lose large amounts of the coins they hold.  I'm not trying to spruik gold here; but it's worth understanding how "small" and "lightweight" bitcoin ownership information is.

If you want to invest/gamble then go right ahead; all markets have risk.  Alas I'm particularly uncomfortable with all "new" markets, including blockchain/crypto ones.  Best of luck.

[nctnico]

Hi,

I am a 51 years old engineer.

I worked with computers since I was 10 years old and still today I spend most of my time with technology: CAD/CAM/CAE, CNC, CMM, but also spectrum analysis, TV, CATV and SAT reception and distribution, emulators, electronics, etc.

I really would like to know what you guys think and do regarding crypto currency.

Stay away from it. Crypto currency is not suitable to replace money as we know it because it can not be printed at will (which is why all countries have left the gold standard).

Imagine a village where they have 1kg worth of gold coins. 1 loaf of bread feeds a family of 4 for 1 week and costs 1 coin in 1900. Fast forward a couple of decades and the number of people have doubled. This means that the amount of bread needed also has doubled. With the same amount of gold it means that 1 coin now buys two loafs of bread. This means that the intrinsic value of the gold has doubled. The people who where able to hold on to some gold have seen their savings double in value without doing anything for it. In the end a system where supply of money doesn't keep up with the size of the economy won't work.

If you want to invest money I strongly suggest to talk to a financial planner. Likely that person will advise you to invest in a fund where fund managers do all the hard work. Unless ofcourse you fancy getting into buying / selling shares but for most this is an expensive hobby. I used to work at a stock trading / fund management firm and being succesful takes a lot of experience and effort.

[NiHaoMike]

Helium is a great idea destroyed by greedy inventors. Perhaps someone could make a decentralized alternative?

There are real world applications for cryptocurrencies, though many of them are kinda on the naughty list. Possibly most - I do not know of anyone who actually traded anything other than other crypto or money for crypto.

Cryptocurrency can be traded for services or physical goods. One perfectly legitimate use is a decentralized alternative to Patreon and Paypal.

While I abhor the absolutely tremendously insane amount of power being consumed by bruteforcing cryptographic algorithms, I can see the value of the concept. Sadly, BTC came first rather than more energy efficient algorithms.

There are altcoins like Curecoin/Foldingcoin that do useful work (biomedical simulations) for mining. A side effect is that because GPUs are almost optimal for that simulation work, there's basically no advantage to developing an ASIC for that.

Some other altcoins like Swagbucks use cryptographic hash brute forcing just like Bitcoin does but with tricks to discourage large mining operations in order to keep the difficulty low and efficiency high, most of them involving the IP address the miner is operating from.

What I would like to see is a cryptocurrency that's "mined" by hosting content, basically Bittorrent that pays you to seed. The end goal is to make an alternative to Youtube.

[David Hess]

Fairytale "Money" 

More properly, fairytale currency, although less so than the dollar.  Neither bitcoin nor the US dollar are money; they are currency.  The dollar has not been money since 1934 and arguably 1913.  At least most cryptocurrencies cannot be wished into existence and arbitrarily devalued by the government to steal it.

[Cerebus]

Imagine a village where they have 1kg worth of gold coins. 1 loaf of bread feeds a family of 4 for 1 week and costs 1 coin in 1900. Fast forward a couple of decades and the number of people have doubled. This means that the amount of bread needed also has doubled. With the same amount of gold it means that 1 coin now buys two loafs of bread. This means that the intrinsic value of the gold has doubled. The people who where able to hold on to some gold have seen their savings double in value without doing anything for it. In the end a system where supply of money doesn't keep up with the size of the economy won't work.

Never, ever, in the history of economics has the same amount of money consistently bought more as time has gone on. In fact, over the long term the opposite is true. According to your model when there was a gold standard there should have been permanent deflation. There wasn't.

[SiliconWizard]

That's gonna be a fun thread on a pretty sensitive topic. It's like this kind of discussion about politics, or sensitive sociological topics, or systemd.

[SiliconWizard]

Fairytale "Money" 

More properly, fairytale currency, although less so than the dollar.  Neither bitcoin nor the US dollar are money; they are currency.  The dollar has not been money since 1934 and arguably 1913.  At least most cryptocurrencies cannot be wished into existence and arbitrarily devalued by the government to steal it.

A currency is nothing more than the trust we collectively put into it, helped by the military when trust seems to be at stake.

The "problem" with "cryptocurrencies", as they are decentralized, is that not only can't it really be controlled by governments, but no country is going to use its army to defend it because of that. Large organizations ready to fight for something they can't control? Let's see...

Proponents and opponents essentially share the same understanding - at least when they understand what a currency is and how it works. They just don't share the same view of the world. Which is more right is basically a political debate.

[Halcyon]

The technology behind it is interesting and has actual legitimate uses, however the "currencies" themselves are nothing more than the modern-day equivalent of trading cards that you used to collect as a kid. Arguably very few are a decent investment. It's extremely high risk and very vulnerable to manipulation. I'd rather buy property personally. Unlike actually currency, crypto is not guaranteed or backed by the government. The savings in my bank account are.

That being said, I've made a decent net profit buying and selling crypto and my current holdings will only contribute to any future profits (if they all fell to a zero dollar value, I'd still be ahead).

Will they "exist" in the long-term in their current form? Who knows. Governments everywhere are turning the screws on tighter regulation and I fear that the vast majority will disappear into obscurity.

[VK3DRB]

"real money" is a store of value....

No it isn't. It is a store of PERCEIVED value, often by minority interests. Real value is something different altogether. Cryptocurrency is like the tulip bubble in Holland from in 1634 to 1637. Its foundation is greed, and it will ultimately fail. My guess is within a few years.

A persons worth is often based on a how much money or property they have. Bezos net "worth" is over $200 BILLION, with much of it made out of underpaying and exploiting vulnerable workers. A person's worth should be more akin to people like this judge and the priest. The $1000 gift will have a more value in it than the obscenely rich would realise....

[SiliconWizard]

Unlike actually currency, crypto is not guaranteed or backed by the government.

True. See above.

The savings in my bank account are.

I don't want to sound too pessimistic here, but I think you're a bit deluded with this one.
I don't know exactly how things work over there, but in most countries, savings are backed up to a certain amount only, and this maximum tends to get lower and lower as time goes by.
Oh, and even getting this minimum guaranteed is if everything else goes well... in case of a major bank failure. If the crisis is severe, I don't know what the government will back exactly. =)

Will they "exist" in the long-term in their current form? Who knows. Governments everywhere are turning the screws on tighter regulation and I fear that the vast majority will disappear into obscurity.

It's hard to tell, but being decentralized by nature, it will be very hard to shut off, unless the internet is modified *worldwide* in such a way that many decentralized services will also become near impossible. Which is not necessarily a great future.

[Rick Law]

What is money and what is currency:

I am going to regress to 1992 (pre-internet) meaning since meaning of words are always changing and some time become less well defined or even confusing.  So may be this old clearer definition can bring some clarity...

1992 The American Heritage Dictionary:

Money:
1.   A commodity, such as gold, or an officially issued coin or paper note that is legally established as an exchangeable equivalent of all other commodities, such as goods and services, and is used as a measure of their comparative values on the market.
2.   The official currency, coins, and negotiable paper notes issued by a government.

Currency:
1.   Money in any form when in actual use as a medium of exchange, especially circulating paper money.


So, non-currency money (definition #1) such as gold is a commodity with intrinsic value.  When you ask for 2 ounces of silver to fix my TV set, I know or I can find out how much 2 ounces of silver is worth, and I can decide if I want to give you 2 ounces of my silver in exchange you fix my TV.  That is 2 ounces of silver is 2 ounces of non-currency money.

There was a time currency was Gold Standard or Silver Standard.  The "Bank Note" is a promise that it is equivalent to a certain amount (in weight) of gold or silver.  You can exchange (with the issuer) that "bank note" face value to real physical metal commodity (gold or silver) at any time and at your discretion.  So rather than carrying a pound of sterling silver in metal form, you can carry a "1 Pound Sterling Note".  This is when the currency's value is "backed" by the government or "backed" by the issuing bank.

Now, currency are no longer directly tie to a commodity.  No Gold Standard, no Silver Standard.  Currency's value now is from "government decree" only.  So, the amount currency to actual commodity equivalence changes moment by moment, and the change is dependent on how the government is managing the currency's value at that moment. Gold price at the time I write this is USD $1805 per ounce.  I am sure it would have changed by the time you look.  That is not an once's of gold's value changed, but instead, it is the value of USD$1805 changed.  How much $1805's can buy will vary, by day, hour, or even milli-second.  It is not "backed" by anything.  It has value solely by government fiat, hence they are call fiat currency or fiat money.  Fiat currency is what is today's Euro, US $, CND $, AUS $...  I don't know of a bank/nation that is still on a commodity standard.

If US Government plans to do more "quantitative easing" between now and tomorrow,  quantitative easing means increasing the money supply, increasing money supply means each dollar will be worth less.  So if more "quantitative easing" occurs, it will take more than $1805 to get an ounce of gold merely knowing that supply-increased or an increase is coming soon.  That expanded supply of currency (in paper form, digital form, or any other form) is inflation.  As you can imagine, US dollar or Euro, the US/EU government can inflate (ie: increase) the supply by many means without limit.  So value of dollars/euro is entirely dependent on government actions (or inaction).

That supply of currency can increase in very unexpected ways.  Say for example if US Government pass a law that limits collateral to no more than 10% of the loan's value, that means I can borrow $1 million dollar on my $100K house, that is a lot more money floating around to be used.  So currency supply can increase in very unexpected ways other than merely government printing more money.

Crypto-Currency's promise (as I understand it, at least for Bit Coin) is that the build in mechanism sets an upper limit on how much can be issued, ever.  So once the upper limit is reached, inflation is no longer possible.  Where as, there is no limit to government printing more money.  So, it is not possible for crypto-currency to become worthless because of continuous inflation, but, crypto-currency has other means to loose value - such as, if no one trust that they can redeem the coin because no one will buy it, then that crypto-currency lost all it's value entirely without inflation.  Another way, and the mostly like way is: government regulating crypto currency making it harder to be used as a currency to exchange value.

EDIT:
Typo error, I had repeated a "not" unknowingly.  Corrected. "...So is not not possible..." replaced with "So it is not possible..."
Other typo correction without affecting meaning but merely to increase readability.

[alexanderbrevig]

Fun thread.

They waste A LOT of energy.

I discovered bitcoin early 2012 on Tor, being a curious IT nerd I did like the concept. Then I saw it could basically get you drugs, child pr0n or a targetted kill on an enemy. This made a lasting impression, so I will not touch it unless it is backed by my govurnment and bound to our actual currency.

I don't even regret not getting any.
I have a few friends that "did well" but to my surprise the common misconception is that they were smart, when in reality they got in the game because they are criminals. You could perhaps calling it smart not selling at the first bull, but I call it greed.

[Kim Christensen]

government regulating crypto currency making it harder to be used as a currency to exchange value.

This is why most cryptos cannot be used as "currency"... It is just too volatile. Using something like Bitcoin would be like living with 5-20% inflation one week and then 5-20% deflation the next. Markets would freeze up if our currency was that volatile.

[Bud]

. Then I saw it could basically get you drugs, child pr0n or a targetted kill on an enemy.

Should we compare how many drugs were sold and enemies killed that got paid for by fiat money vs crypto?

[SiliconWizard]

government regulating crypto currency making it harder to be used as a currency to exchange value.

This is why most cryptos cannot be used as "currency"... It is just too volatile. Using something like Bitcoin would be like living with 5-20% inflation one week and then 5-20% deflation the next. Markets would freeze up if our currency was that volatile.

Of course. But they are volatile against regular currencies, not inherently. And they are volatile precisely because there's a lot of exchange between cryptos and regular currencies, and the net exchange is almost never close to zero. This is what drives the volatility. If you take a closer look, most exchanges that have an impact on value for cryptos do not come from small investors whatsoever. They usually mainly come from very big investors, some being big companies, some even being institutional organizations, that can regularly buy or sell for hundreds of millions of dollars per day. So much for the greedy chap speculating a couple grands in his room.

[eti]

Yet, I have to confess that I suddenly feel like being part of the "old generation": my younger coleagues at work (former students of mine), in their late 20ies, early 30ies, all use some form of crypto currency. They have credit cards linked to their crypto wallet, they invest some of their money in Bitcoin, Dodgecoin, Ethereal, etc. They talk about their portfolios and basically consider all of that normal.

Don't be sucked in by the psychology.  The world is a big place, there are lots of people that treat things as "normal" that you probably want to avoid. 

Pyramid schemes AKA multi-level marketing
Investing and controlling money of other family members
Lots of credit card debt across multiple cards
etc

Be wary of "fear of missing out" and "everyone else is doing it, I want to jump on the bandwagon".  These are strong motivators used by many companies to get people to do what they want and spend money where they want them to spend money.

To be brutally honest: if I wanted to get money quick, I'd target someone who identifies themselves "as part of the old generation" with an investment scam.  I'd show them growth rates, talk about how many other people my age are investing; if I tried enough targets it would probably eventually work (and would pay better than my current jobs).

3) It sounds all so easy, yet so complicated and obfuscated: it is hard to really understand what is behind it, even if the currency is based on "open source".
4) I roughly understand what a blockchain is, but then, do I really? Does the broad public investing in crypto currencies really know what a blockchain is?

Yes all the details matter.

In a perfect world markets don't have any hidden gotchas.  Things go up, things go down, you can put money in and take it out whenever.

In reality all "markets" have their own weird limitations that can trap you.

The bitcoin blockchain is very large, so most people trading it in don't directly run blockchain software on their own computer and instead get someone else to do it for them.  You give money to a company, they hold the coins for you, then they pay you back when you choose to sell the coins again.  Good luck suing/chasing them if they choose to misbehave. 

Bitcoin trading or holding companies do not even have to intentionally misbehave, bitcoins are a lot harder to "hold onto" than physical assets like gold because theft requires only a few small packets of data (micro-seconds of internet time) versus trucks, minis and explosives.  Some of the biggest bitcoin exchanges have collapsed because of hacks and others still lose large amounts of the coins they hold.  I'm not trying to spruik gold here; but it's worth understanding how "small" and "lightweight" bitcoin ownership information is.

If you want to invest/gamble then go right ahead; all markets have risk.  Alas I'm particularly uncomfortable with all "new" markets, including blockchain/crypto ones.  Best of luck.

Yep. The whole “but everyone does it, sooo…” simpleton logic, makes me despair at times. I’m one of those who subconsciously tends to avoid (most) things, tv shows, fads et cetera, not because I’m aloof or “better” than anyone, of course I’m not, but I feel that if the masses (and a great deficit of critical thought) are all doing something, and then next month they’ve forgotten all about that fad and dropped it like a child bored of a toy… well, erm, yeah, nah you’re alright thanks, I enjoy my little bubble where I do as I please.

[eti]

I have a bridge to sell you - no please, wait, hear me out before you run off - it’s no ordinary one, it’s made of blockchains and magic dust.

If you can “source” a copy, the fantastic documentary “Inside the Bank of England” shows you a very rare, very hands-on insider view of the institution, complete with stacks and stacks of MILLION POUND (and higher) NOTES, yes they actually exist, and I think they have one hundred million pound notes also.

https://www.bbc.co.uk/news/magazine-21145103

The point of a banknote is that the issuing bank promises to make good on that legal tender. Where’s that same promise with fairytalecoin?

[langwadt]

isn't it Musks private money printing machine?, all he has to do to make a few tens of millions is a few tweets about some crypto currency, while investing in same

[Halcyon]

The savings in my bank account are.

I don't want to sound too pessimistic here, but I think you're a bit deluded with this one.
I don't know exactly how things work over there, but in most countries, savings are backed up to a certain amount only, and this maximum tends to get lower and lower as time goes by.
Oh, and even getting this minimum guaranteed is if everything else goes well... in case of a major bank failure. If the crisis is severe, I don't know what the government will back exactly. =)

I'm speaking from my seat here in Australia. Money in various types of accounts is guaranteed to $250,000 per account holder, per institution. Just about every major bank or credit union in Australia are covered under the scheme. If a bank covered under the scheme fails, processes are automatically triggered and the Australian Prudential Regulation Authority will act to electronically transfer funds to an alternate bank account. If you have multiple accounts across two different banks, then you're covered for an additional $250k with that other institution as well.

This scheme doesn't just protect consumer money in savings or term deposit accounts either, it applies to things like mortgage offset accounts and superannuation as well.

You can read a general overview of how it works at: https://www.apra.gov.au/financial-claims-scheme-0

[Kim Christensen]

But they are volatile against regular currencies, not inherently. And they are volatile precisely because there's a lot of exchange between cryptos and regular currencies,

Global FOREX dwarfs crypto trading, yet most currencies are far less volatile than crypto... I'd say it's got more to do with the speculative nature of cryptos rather than anything else.
ie: Crypto isn't really used for anything other than speculation. Regular currencies, while there are FOREX speculators, are mostly used to buy and sell goods and are kept relatively stable by central banks.

[langwadt]

invest in Champagne instead, https://www.reuters.com/markets/europe/asset-bubbles-champagne-outfizzes-big-tech-bitcoin-2021-2021-12-24/

[Rick Law]

government regulating crypto currency making it harder to be used as a currency to exchange value.

This is why most cryptos cannot be used as "currency"... It is just too volatile. Using something like Bitcoin would be like living with 5-20% inflation one week and then 5-20% deflation the next. Markets would freeze up if our currency was that volatile.

The crypto-currency volatility doesn't make it unsuitable as currency; it just made crypto-currency unsuitable as fiscal value-storage medium.

If I agree with you that I will send you $X in crypto for you to do YY and email it to me.  The value just has to hold for the duration from my offer to your acceptance/shipment and ends with my payment.

So, upon agreement of $X, I can exchange my commodity backed money (my fiscal value storage) to $X crypto, after you received the payment, you can exchange your $x to your commodity backed money (your fiscal value storage).

In fact, one can go one step further.  We can make the agreement that instead of $X, we will do the exchange upon completion at say XX milligram of gold.  At agreed-upon payment time, we check the current gold price for that specific crypto we are using, do the math and transfer the crypto-dollar eqv of XX milligram of gold.

[Kim Christensen]

The value just has to hold for the duration from my offer to your acceptance/shipment and ends with my payment.

I disagree.. If the value of crypto $X was rapidly going down, I would wait as long as possible before offering my services in trade for $X. Likewise you would want to do the deal ASAP, but would be hard pressed to find anyone willing to take your $X.. The inability of both of us being able to place a fixed value on the deal using $X, makes the transaction so much more difficult to negotiate.
Just look at what happens in economies when there is hyperinflation or hyperdeflation. It's a mess.

crypto-dollar eqv of XX milligram of gold

Then we are not actually using crypto for the exchange but the value of gold instead.

[eti]

[Bud]

isn't it Musks private money printing machine?, all he has to do to make a few tens of millions is a few tweets about some crypto currency, while investing in same

It is not Musk, it is his idiot followers.

[daqq]

There are altcoins like Curecoin/Foldingcoin that do useful work (biomedical simulations) for mining. A side effect is that because GPUs are almost optimal for that simulation work, there's basically no advantage to developing an ASIC for that.

Well, curecoin has a market cap of 1.5MUSD, Foldingcoin 0.3MUSD. So about 0.8ppm of the total market cap (2.2TUSD). So, yay I guess?

[Johnny10]

This is a lively conversation.

A conversation that I suppose government lawmakers are making right now given that Crypto has a notational value of 2.2 Trillion dollars.

If you will notice, in the US, the Federal Reserve, the SEC, and Congress are all in conversation about regulating crypto.

[rsjsouza]

government regulating crypto currency making it harder to be used as a currency to exchange value.

This is why most cryptos cannot be used as "currency"... It is just too volatile. Using something like Bitcoin would be like living with 5-20% inflation one week and then 5-20% deflation the next. Markets would freeze up if our currency was that volatile.

The crypto-currency volatility doesn't make it unsuitable as currency; it just made crypto-currency unsuitable as fiscal value-storage medium.

If I agree with you that I will send you $X in crypto for you to do YY and email it to me.  The value just has to hold for the duration from my offer to your acceptance/shipment and ends with my payment.

So, upon agreement of $X, I can exchange my commodity backed money (my fiscal value storage) to $X crypto, after you received the payment, you can exchange your $x to your commodity backed money (your fiscal value storage).

In fact, one can go one step further.  We can make the agreement that instead of $X, we will do the exchange upon completion at say XX milligram of gold.  At agreed-upon payment time, we check the current gold price for that specific crypto we are using, do the math and transfer the crypto-dollar eqv of XX milligram of gold.

As someone else alluded prior to this thread, anyone that lived through the hell of inflation years in the 80's in the peripheral economies knows that by heart - by then, US Dollars were the anchor of the economy, not the local fiat currency. The difference back then is that, due to the lack of internet and electronically automated pricing mechanisms, the devaluation of the local currencies were done in human speed, not multi-GHz speed. In other words, price tags on supermarkets were manually updated at the speed of the operator of the tag machine, not in a database where a UPC barcode could enable a price change between picking up the product in the shelf and paying at the cashier (despite this, it was not uncommon to see four, five price tags piled on top of each other as the days went by with unsold products).

A similar idea happened during the housing crisis that started in 2008. To me it was a complete sense of déja-vu to see the perceived value of property crumble - operative word is perceived. Back in the 80's with high inflation, you purchased a house/apartment at a given value with a previously agreed monthly payments with a specific rate and some level of monthly readjustment (typically based on inflation). However, the government also added a readjustment of the principal also based on inflation - basically turning the property value into an almost unpayable moving target since, at the end of the twelve years mortgage period, it wasn't uncommon for someone to still owe 150% to 200% of the initial principal.

During these years there were all sorts of crooks and pyramid schemes, to where my dad taught us all an important lesson: only go for high volatility or risky investments with play money and never with your core savings. That saved a few of his friends from ruin. And that is how I would suggest facing such crypto investments: only use with something you can afford to lose.

[nctnico]

The savings in my bank account are.

I don't want to sound too pessimistic here, but I think you're a bit deluded with this one.
I don't know exactly how things work over there, but in most countries, savings are backed up to a certain amount only, and this maximum tends to get lower and lower as time goes by.
Oh, and even getting this minimum guaranteed is if everything else goes well... in case of a major bank failure. If the crisis is severe, I don't know what the government will back exactly. =)

I'm speaking from my seat here in Australia. Money in various types of accounts is guaranteed to $250,000 per account holder, per institution. Just about every major bank or credit union in Australia are covered under the scheme. If a bank covered under the scheme fails, processes are automatically triggered and the Australian Prudential Regulation Authority will act to electronically transfer funds to an alternate bank account. If you have multiple accounts across two different banks, then you're covered for an additional $250k with that other institution as well.

This scheme doesn't just protect consumer money in savings or term deposit accounts either, it applies to things like mortgage offset accounts and superannuation as well.

Most countries in the EU have a similar consumer protection system.

[Johnny10]

If you want to know how you really feel about crypto.

January 1st 2022
Your company calls you in and says from today forward you will be paid in bitcoin.
And your 401K will be invested in a Bitcoin ETF.

[Bicurico]

So far all replies share my current opinion, which means that those who believe in crypto currency are all quiet and those of us posting here are old generation or I don't know where the people adding to the hype are.

I was expecting to have pros and cons arguments instead of only cons.

Truth is that I know people who live their day to day life with the interest profits of their crypto currency. And they do that for a few years now.

And I wonder is at least some of the crypto currencies are not far beyond the point of disappearing again.

While I do have my serious doubts, I start to believe that crypto currency has opened doors to a disruptive technology that eventually will end up shaping the future.

As with Monopoly, where the game is done as soon as one player owns all the hotels, our western economy is at a point where younger generations will never be able to afford ownership of real estate.

My fear is that the future generations deception of what they can expect compared to previous generations might lead to a war.

Perhaps crypto currency will be able to counter the current economic imbalance where money is produced in unimaginable amounts, without ever reaching the common people.

Please go on discussing, perhaps some interesting points will appear!

[emece67]

.

[nctnico]

So far all replies share my current opinion, which means that those who believe in crypto currency are all quiet and those of us posting here are old generation or I don't know where the people adding to the hype are.

I was expecting to have pros and cons arguments instead of only cons.

Truth is that I know people who live their day to day life with the interest profits of their crypto currency. And they do that for a few years now.

But the same is true for people buying & selling shares. But the thing is: those people only brag about their wins, not about their losses. Before the dot-com bubble bursted (2001) you'd be bombarded (thru advertising) with share trading platforms allowing people to easely buy & sell shares. After the dot-com bubble that went silent; most people lost their money (*). Nowadays you get bombarded with crypto currency trading platforms. I hope you spot the trend.

If you are really interested in crypto then buy some (say for 300 euro or so) and start doing day trading. Be prepared to lose all your money though.

* Including professional stock traders. I recall a conversation where one had a whole bunch of shares in a telecom company which he bought at 18 euro per share. The share price of that telecom company went up to 1/3 of that price in peaks during the past 20 years.

[tom66]

Crypto makes some sense, but the current pricing of BTC/ETH is pure speculation and not reasonable. 

It's a bit like how TSLA is priced at like 400x PE, it's not reasonable.  But who knows how long it'll last?  Enjoy the ride while it lasts.

ETH is going from proof of work to proof of stake, which makes it much more energy efficient, one of my big bugbears with BTC is how it consumes something like the entirety of Czech Republic's electricity, but processes 1/1000th the transactions per second that Visa does.

[madires]

Crypto currency is simply a bet, a speculation bubble, or we could call it also lottery 3.0. If you're lucky you can make some money. Most are simply too volatile to be considered a currency while a few are trying to be stable. However, they all share several issues. Blockchains aren't very scalable and many require significant number crunching. Next problem is that crypto money is criminal's best friend, great for money laundering. Law makers will take care about that - just a matter of time. So (pseudo) anonymity could become a thing of the past, maybe crypto money will become illegal, or we'll have some official crypto currencies regulated like our classic money. It's easy to steal crypto money, e.g. by SIM-swapping or direct attack of crypto exchanges. Several security issues with 'smart contracts' are also exploited already. It's a mess!

[Algoma]

For every win, there is a loss. Complete Gold rush, with late buyers being parted of their money to the few that were there early.

The only real driver is the cost of mining.. Only real use is to pay ransoms. Its the power companies and Hardware manufactures that are claiming all the final profit, if there is any. Nvidia is doing great thanks to everyone buyuing into the whole pyramid scheme that is bitcoin.

While the Blockchain as a concept is a good idea, the implimentation isn't yet ready for a true crypto currency.

[SiliconWizard]

The savings in my bank account are.

I don't want to sound too pessimistic here, but I think you're a bit deluded with this one.
I don't know exactly how things work over there, but in most countries, savings are backed up to a certain amount only, and this maximum tends to get lower and lower as time goes by.
Oh, and even getting this minimum guaranteed is if everything else goes well... in case of a major bank failure. If the crisis is severe, I don't know what the government will back exactly. =)

I'm speaking from my seat here in Australia. Money in various types of accounts is guaranteed to $250,000 per account holder, per institution. Just about every major bank or credit union in Australia are covered under the scheme. If a bank covered under the scheme fails, processes are automatically triggered and the Australian Prudential Regulation Authority will act to electronically transfer funds to an alternate bank account. If you have multiple accounts across two different banks, then you're covered for an additional $250k with that other institution as well.

This scheme doesn't just protect consumer money in savings or term deposit accounts either, it applies to things like mortgage offset accounts and superannuation as well.

Most countries in the EU have a similar consumer protection system.

Which is exactly what I said. (Except for the specific part about mortgages, which is a scheme that we do not have over here, at least not in the same form.)

My points were:
1/ They guarantee only up to a certain amount - which depends on each country - so it may or may not be all of your savings. Of course you may reply that if you ever have more than this, you can split it across different banks. Yes. Now you seem to be slightly better off in Australia with 250k AUD. Over here, it's 100k EUR. 250k AUD is approx. 160k EUR. (But maybe  the cost of living is higher in Australia too, not sure about this, or if the maximum guaranteed would have anything to do with it.)
2/ In case you want to secure more than this amount, yes you can split across several banks - but make sure those are not related in any way. These days, many banks are part of the same groups, and they keep fusing faster than light. (Almost  ) So, keep an eye on it on a regular basis. You may object that having more than $250k in savings is a concern for only a minority of people. Probably. Or that if you have more, you better invest it in things rather than keep it in a bank. Which may be a good idea anyway, even if you have less...
3/ This guarantee holds, as I said, if everything goes "well". So yeah, your bank happens to fail, but it's an isolated case. The guarantee works. You're all happy. Now if there were a major systemic bank failure, things might be different. You're protected by law until said law is broken as part of an exception. It's not like it never happens. Especially lately.
4/ I suggested the guaranteed amount is likely to get lower over time, by law, if things start to go sour. It's not at all unlikely IMHO. If it never happens over there in Australia, good thing. =)

Ultimately, the whole thing is an excellent illustration of how it's all based on *trust*. You apparently happen to have full trust. I'm just evoking other possible views and scenarios if you happen to be a bit less trustful.

[Bud]

Only real use is to pay ransoms.

This is a very dull statement. And what all those crooks do with the coins they get as ransom payout if the coins are so useless?

Until recently Tesla accepted bitcoin as payments for cars. Bet you did not know that.

[SiliconWizard]

Bitcoin payments are accepted by many more companies that some seem to think.
https://99bitcoins.com/bitcoin/who-accepts/

And, it's so useless that: https://www.bloomberg.com/news/articles/2021-12-14/morgan-stanley-backed-bitcoin-firm-nydig-raises-1-billion

[Johnny10]

I imagine they figure a 50% loss on any ransom payments they get. Just as diamonds may sell for 20% of retail at a fence shop.

That's what I am looking for... a place to store my wealth that fluctuates 20 - 40% on a monthly basis.

[nctnico]

Ultimately, the whole thing is an excellent illustration of how it's all based on *trust*. You apparently happen to have full trust. I'm just evoking other possible views and scenarios if you happen to be a bit less trustful.

No, I'm pragmatic instead of being paranoid. The reality is that the real linkage is not trust but mutual dependancies.

[Algoma]

I recall first looking into bitcoin when it was only $0.40 / Bitcoin.  Did a bit of pooled mining and tradeing until I had over 0.68 bitcoin.. Before the exchange I was using, BTC-E was seized by the US.. It was gone.

I retain a bitter view of Crypto as an IT Professinal, it been the primary driver behind the constant goldrush to compromize even the smallest system.

Setup a honeypot network and crack the door with the slightest intential flaw, it only takes seconds before some RAT is uploaded for either Ransomware or Additional Crypto mining...

[David Hess]

The "problem" with "cryptocurrencies", as they are decentralized, is that not only can't it really be controlled by governments, but no country is going to use its army to defend it because of that. Large organizations ready to fight for something they can't control? Let's see...

I agree with all of your points.

It is a problem for the government which would prefer a currency that they can control and devalue as needed to finance whatever they like without the bad publicity of increasing taxes.  Germany did exactly this to finance World War 1.  All governments did it to finance World War 2.

The US uses its currency to devalue its massive debt by effectively taxing its lenders.  That would be impossible with money, or a cryptocurrency like Bitcoin.

Proponents and opponents essentially share the same understanding - at least when they understand what a currency is and how it works. They just don't share the same view of the world. Which is more right is basically a political debate.

Most people, even those who should know better (1) and many posters in this discussion, confuse money and currency.  The US Constitution authorizes the government to regulate and mint *money*.  It does not authorize currency.

Congress shall have Power…to coin Money, regulate the Value thereof, and of foreign Coin.

No state…shall make any Thing but gold and silver Coin a Tender in Payment of Debts.

It is almost as if the authors of the Constitution knew the difference between money and currency.   The dollar as it exists now, is not money.  It has not been money for about 100 years.

"real money" is a store of value....

No it isn't. It is a store of PERCEIVED value, often by minority interests. Real value is something different altogether. Cryptocurrency is like the tulip bubble in Holland from in 1634 to 1637. Its foundation is greed, and it will ultimately fail. My guess is within a few years.

But the same thing could be said about any currency, like dollars now, and at least cryptocurrencies, like Bitcoin but not all possible cryptocurrencies, are bounded like money is.  Money is not just a store of perceived value, but is tied to a tangible thing.

A persons worth is often based on a how much money or property they have. Bezos net "worth" is over $200 BILLION, with much of it made out of underpaying and exploiting vulnerable workers. A person's worth should be more akin to people like this judge and the priest. The $1000 gift will have a more value in it than the obscenely rich would realise....

Then Bezos net "worth" is $200 billion of currency, not money.  When the government inflates the "money" supply, which is really currency, his net worth measured in currency increases.  Meanwhile those vulnerable workers have their wages decrease and costs increase.  Who are you supporting here by confusing currency with money?

(1) TIK recently posted a video which discussed the difference between money and currency in connection with what happened with the Weimar Hyperinflation leading to World War 1, https://youtu.be/YygQ0Wq0wDA

[SiliconWizard]

Ultimately, the whole thing is an excellent illustration of how it's all based on *trust*. You apparently happen to have full trust. I'm just evoking other possible views and scenarios if you happen to be a bit less trustful.

No, I'm pragmatic instead of being paranoid. The reality is that the real linkage is not trust but mutual dependancies.

Not being fully trusting it not the same as being paranoid. Strawman argument. =)
And there are some objective facts that can alter trust a little bit. See David Hess's post. But anything that has been happening at least for the past two decades should be enough to make you question full trust a little bit.

As to mutual dependency... yeah. Are you sure the forces at stake are really all balanced?

[SiliconWizard]

Then Bezos net "worth" is $200 billion of currency, not money.  When the government inflates the "money" supply, which is really currency, his net worth measured in currency increases.  Meanwhile those vulnerable workers have their wages decrease and costs increase.  Who are you supporting here by confusing currency with money?

Yes, this is what's been happening particularly "violently" for the past two years. Net result is the richest people have never been that rich in modern history. And many small businesses have shut down. Middle class is increasingly becoming dependent and vulnerable. How much trust in the system does that really instill?

[nctnico]

Ultimately, the whole thing is an excellent illustration of how it's all based on *trust*. You apparently happen to have full trust. I'm just evoking other possible views and scenarios if you happen to be a bit less trustful.

No, I'm pragmatic instead of being paranoid. The reality is that the real linkage is not trust but mutual dependancies.

Not being fully trusting it not the same as being paranoid. Strawman argument. =)
And there are some objective facts that can alter trust a little bit. See David Hess's post.

Quoting far outdated texts and complaining about governments printing money. No, I'm not convinced. If all it shows a deep lack of knowledge how the monetary system works and what money actually represents. Money doesn't represent gold or silver, at the very basic level it represents an amount of labour. Why is your boss paying you? What do you give in return?

[Johnny10]

Money is a commodity accepted by general consent as a medium of economic exchange. It is the medium in which prices and values are expressed. It circulates from person to person and country to country, facilitating trade, and it is the principal measure of wealth.

Its an agreed upon barter system.
Gold, Silver, Shells, Beads, Beany Babies, Bitcoin doesn't really matter as long as we can agree upon an exchange rate.

The benefit of it being backed by governments is that it can be have an enforced value, protection from counterfeiting. Accepted as payment of all bills and taxes.

[nctnico]

Money is a commodity accepted by general consent as a medium of economic exchange. It is the medium in which prices and values are expressed. It circulates from person to person and country to country, facilitating trade, and it is the principal measure of wealth.

Its an agreed upon barter system.
Gold, Silver, Shells, Beads, Beany Babies, Bitcoin doesn't really matter as long as we can agree upon an exchange rate.

Not quite. Whatever is used as money needs to be produced at will by the body that governs it without being limited by resources. This precludes anything that is a scarse resource one way or another. Otherwise it will hinder economic growth. In the end there has to be enough money to carry all the transactions within the economy.

[Johnny10]

Yes, one of the reasons we went off the gold standard.
Simply not enough gold to cover all the transactions.

I collected Large size Gold and Silver certificates.
Which could be exchanged for actual coins.

[NiHaoMike]

Well, curecoin has a market cap of 1.5MUSD, Foldingcoin 0.3MUSD. So about 0.8ppm of the total market cap (2.2TUSD). So, yay I guess?

We need to expand on the concept. I remember in 2008, there was a program you could run on your PC to legally get free music, as an alternative to piracy. It used your PC for computation which companies would pay for. It didn't take off since was little demand for mass computation that didn't need the data to be secured. Had it been introduced just a few years later, things might turn out very different!

[madires]

'Critical' Polygon bug put $24 billion in tokens at risk until recent hard fork (https://www.theblockcrypto.com/post/128784/polygon-critical-bug-24-billion-matic-tokens-at-risk-hard-fork)

[Rick Law]

...
The crypto-currency volatility doesn't make it unsuitable as currency; it just made crypto-currency unsuitable as fiscal value-storage medium.
...

As someone else alluded prior to this thread, anyone that lived through the hell of inflation years in the 80's in the peripheral economies knows that by heart - by then, US Dollars were the anchor of the economy, not the local fiat currency. The difference back then is that, due to the lack of internet and electronically automated pricing mechanisms, the devaluation of the local currencies were done in human speed, not multi-GHz speed. In other words, price tags on supermarkets were manually updated at the speed of the operator of the tag machine, not in a database where a UPC barcode could enable a price change between picking up the product in the shelf and paying at the cashier (despite this, it was not uncommon to see four, five price tags piled on top of each other as the days went by with unsold products).
...
...

I too lived the hellish inflation of the 80's, but that started not in the 80's but in 1976.  1980 was the change in policy (from Carter to Reagan) and it took a long while to recover.  During the Carter years, a new "pain index" was invented: unemployment rate plus inflation rate.  It was awful time, high unemployment, high inflation.

I agree with the "US Dollars were the anchor of the economy" part but I disagree with "not the local fiat currency."  It was a fiat currency, but used by other locality (nations) because of USA's then very good fiscal reputation.  US Dollar start to deviate from the Gold Standard in 1933.  Per US Federal Reserve, the care-taker of US Dollar, in 1971, USA official abandoned the Gold Standard^[1]  thus making US Dollar is a fiat currency.

While it became a fiat currency, USA regained its credibility and the green-back continued to be accepted as a world wide currency solely on the USA's reputation.  Reputation must be earned, and can be lost.  We are introducing a lot of measures that is inflationary in the last couple of decades.  Hard to imagine, gold was merely $35 an ounce when we came off the gold standard.  When I first posted gold price two days ago (Dec 29), it was $1805 an ounce.  Today (Dec 31), two days later, now is USD is $1831/ounce.  This is a 1.4% drop in value for the USD in two days.

One can speculate in anything: stocks, paper currencies, live-stocks, and even crypto-currencies.  One can also make money whether the instrument of speculation go up or go down.

Crypto-currency speculation is in it's infancy.  Stock on the other hand very developed as a speculative tool making it far more suitable for speculation.  Gold would have been a good "value storage medium" but of course governments will do everything possible to make it difficult to invest in Gold.  In the now defunct Obama Care (socialized medical care plan that Obama said he didn't mind it being called Obama Care), one must report Gold purchase > $600^[2].  Why would that be a medical issue is anyone's guess.  I suppose  the more people invest in Gold, fiat money's value decrease is more visible, and he would need to inflate the dollar supply quite a bit to made his plan work.

Reference:
[1]  Federal Reserve History: "Nixon Ends Convertibility of U.S. Dollars to Gold and Announces Wage/Price Controls"
^{https://www.federalreservehistory.org/essays/gold-convertibility-ends}
[2] New Max magazine: "New Tax on Gold Is Hidden in Obamacare"
^{https://www.newsmax.com/Finance/StreetTalk/New-Tax-Gold-Hidden-Obamacare-healthcare/2010/07/21/id/365283/}

[Rick Law]

The value just has to hold for the duration from my offer to your acceptance/shipment and ends with my payment.

I disagree.. If the value of crypto $X was rapidly going down, I would wait as long as possible before offering my services in trade for $X. Likewise you would want to do the deal ASAP, but would be hard pressed to find anyone willing to take your $X.. The inability of both of us being able to place a fixed value on the deal using $X, makes the transaction so much more difficult to negotiate.
Just look at what happens in economies when there is hyperinflation or hyperdeflation. It's a mess.

crypto-dollar eqv of XX milligram of gold

Then we are not actually using crypto for the exchange but the value of gold instead.

Yeah, it is a mess.  But you are using crypto as the instrument of payment, just not as the instrument of valuation.  The valuation is based gold on since I said equivalent crypto dollars for X milligrams of Gold at the time of the transaction.

As to delaying or moving up the transaction time, that is something that could be done with paper currencies too.  Everyday, when you look at currency exchange rates, you will find the rates different.  Relying on movement of currency value is speculating on the currency.  You may win, or loose -- depending on the clarity of your crystal ball.

[tszaboo]

My thoughts are:
1) I almost made more money with them this year, than at work, with much less effort.
2) Banks are obsolete, and they are clueless about it. It will take them like the post office, when they got wiped out by email.
3) Bitcoin is technological dinosaur, best would be to shutdown it's mining, and move them tokenized to a PoS network. ETH as well.
4) I have a lot more thing to say about it, but then I decided to make a youtube channel out of it, about ~6K subscribers now.

[eti]

My thoughts are:
1) I almost made more money with them this year, than at work, with much less effort.
2) Banks are obsolete, and they are clueless about it. It will take them like the post office, when they got wiped out by email.
3) Bitcoin is technological dinosaur, best would be to shutdown it's mining, and move them tokenized to a PoS network. ETH as well.
4) I have a lot more thing to say about it, but then I decided to make a youtube channel out of it, about ~6K subscribers now.

Banks are “obsolete”?

Okkkk. I’ll put this down to you maybe having had too much New Years Eve booze.

[Bud]

You may not know that nowadays you can get a loan for your crypto as a collateral. Yes you get actual dollars that you can use. Return the loan and take your crypto back once you are done.
I would not say banks are in danger at this time but crypto is expanding into financial services so they do have to worry.

[David Hess]

Quoting far outdated texts and complaining about governments printing money. No, I'm not convinced. If all it shows a deep lack of knowledge how the monetary system works and what money actually represents. Money doesn't represent gold or silver, at the very basic level it represents an amount of labour. Why is your boss paying you? What do you give in return?

So it shows a deep lack of knowledge about how the monetary system works and what money represents, while you confuse money with currency?  They are very distinct.

Which texts are you relying on that confuse money and currency?  TIK, in that link I provided, makes this very point.  Even older otherwise excellent texts are not always careful about this which leads to much confusion about definitions.  In some texts the confusion is deliberate to undermine thought.

[nctnico]

Quoting far outdated texts and complaining about governments printing money. No, I'm not convinced. If all it shows a deep lack of knowledge how the monetary system works and what money actually represents. Money doesn't represent gold or silver, at the very basic level it represents an amount of labour. Why is your boss paying you? What do you give in return?

So it shows a deep lack of knowledge about how the monetary system works and what money represents, while you confuse money with currency?  They are very distinct.

Which texts are you relying on that confuse money and currency?  TIK, in that link I provided, makes this very point.

Nahh, he is jabbering on about intrinsic value of money / currency. Just another random youtube video using an example of the past (and likely quoting people out of context) to make a poor point. The values & availability of the big currencies like dollar, euro, yuan and pound are very carefully controlled and strongly interconnected. In the past 20 years there have been 3 large economic crisis and the system has dealt with those just fine.

Ofcourse you can turn this into a semantical discussion but the general public uses the words currency and money for the same: what is in their wallet and bank account. Nobody says they have currency in the bank; everyone says they have money in the bank. It is also very debatable whether currency has no intrinsic value; you can use it to buy a commodity called work.

Wanting to go back to some kind of 'gold standard' just isn't going to work. All the gold mined up to today is worth about 8 times less than the size of the world's economy. Heck, it isn't even enough to cover the US' economy. Gold is also a commodity used for many other purposes as well (think about gold plated PCBs and so on). How are you going to buy gold and then use it in an industrial process to make a product? With a gold standard in place, you are basically destroying money that way.

Also, in the past several countries have resorted to prohibiting people owning gold in order to make it available to back money because there wasn't enough gold in the government's hand to sustain the size of the economy. Often at prices set by the government (=artificially inflating / deflating the price of gold); how is that any different compared to fiat currency? This also means that people would not be able to convert their money into gold if they wanted to; so what is having a gold standard actually worth then? You have money that is backed by gold but you can't get (legally own) the gold the money represents.

And the very bottom line is that gold is just stuff found in the earth and people like how it shines pretty in the sunlight. You can't eat it; it is pretty much useless to sustain your life in any way. Like paper money gold is just stuff that has some imaginary (commonly agreed upon) value assigned to it. To paraphrase TIK: you have been tricked into thinking gold is special in some way.

[David Hess]

Nahh, he is jabbering on about intrinsic value of money / currency. Just another random youtube video using an example of the past (and likely quoting people out of context) to make a poor point. The values & availability of the big currencies like dollar, euro, yuan and pound are very carefully controlled and strongly interconnected. In the past 20 years there have been 3 large economic crisis and the system has dealt with those just fine.

The Great Depression happened *after* money, but not all of it, was replaced with fiat currency, so the cause and effect are backwards from what advocates of fiat currency would have you believe.  So what exactly was the cause of those 3 large economic crisis?

Of course you can turn this into a semantical discussion but the general public uses the words currency and money for the same: what is in their wallet and bank account. Nobody says they have currency in the bank; everyone says they have money in the bank. It is also very debatable whether currency has no intrinsic value; you can use it to buy a commodity called work.

But the value of a currency can be changed at whim.  Money is based on an objective standard.

You have demonstrated the general confusion between the terms money and currency which goes back decades, and is deliberate.  One way to prevent knowledge and discussion in the epistemological sense is to corrupt definitions.  Both Rand and Orwell had a lot to say about that.

Wanting to go back to some kind of 'gold standard' just isn't going to work. All the gold mined up to today is worth about 8 times less than the size of the world's economy. Heck, it isn't even enough to cover the US' economy. Gold is also a commodity used for many other purposes as well (think about gold plated PCBs and so on). How are you going to buy gold and then use it in an industrial process to make a product? With a gold standard in place, you are basically destroying money that way.

But money can be based on other objective things.  It does not have to be gold.

Also, in the past several countries have resorted to prohibiting people owning gold in order to make it available to back money because there wasn't enough gold in the government's hand to sustain the size of the economy. Often at prices set by the government (=artificially inflating / deflating the price of gold); how is that any different compared to fiat currency? This also means that people would not be able to convert their money into gold if they wanted to; so what is having a gold standard actually worth then? You have money that is backed by gold but you can't get (legally own) the gold the money represents.

That is the common and necessary pattern when governments replace money with currency.  And it leads to a discussion of why price controls result in shortages and my new favorite aphorism that politics consists of denying economics.

And the very bottom line is that gold is just stuff found in the earth and people like how it shines pretty in the sunlight. You can't eat it; it is pretty much useless to sustain your life in any way. Like paper money gold is just stuff that has some imaginary (commonly agreed upon) value assigned to it. To paraphrase TIK: you have been tricked into thinking gold is special in some way.

Gold, any many other things, have an objective value.  It costs the same amount to print a 100 dollar bill instead of a 1 dollar bill, or to expand a bank's currency reserves by a billion dollars instead of 1 dollar.

[SiliconWizard]

Gold, any many other things, have an objective value.  It costs the same amount to print a 100 dollar bill instead of a 1 dollar bill, or to expand a bank's currency reserves by a billion dollars instead of 1 dollar.

Yes. Two of the main criterions is that it has a cost for extracting it, increasing with the amount extracted, and it's relatively scarce. Bitcoin has the two same properties.
Of course, gold has the benefit of requiring no maintenance once you own it, so it's infinitely more resilient, and it has also been a store of value for thousands of years, so it has like passed the test of time...

[nctnico]

Of course you can turn this into a semantical discussion but the general public uses the words currency and money for the same: what is in their wallet and bank account. Nobody says they have currency in the bank; everyone says they have money in the bank. It is also very debatable whether currency has no intrinsic value; you can use it to buy a commodity called work.

But the value of a currency can be changed at whim.  Money is based on an objective standard.

You have demonstrated the general confusion between the terms money and currency which goes back decades, and is deliberate.  One way to prevent knowledge and discussion in the epistemological sense is to corrupt definitions.  Both Rand and Orwell had a lot to say about that.

Sorry, but that is just conspiracy theorism. The majority of the countries are using fiat money/currency and each of these countries have economists who are in control of such a system. On top of that there are the IMF and EMF (for the EU). Argueing they are wrong is like being Don Quichot chasing windmills.

You really need to realise that the only commodity that really backs up any form of money/currency is work. Plain and simple.

Imagine the world goes to shit and we both show up at a farmer who has some food. You have a bar of gold and I brought my bag of tools. I'm 100% sure I'm going back home with the food after fixing something that is broken at the farm. OTOH a bar of gold is of no use to the farmer so you are left with nothing. And I can do the same thing the next day and the day after.

Ofcourse it is easier to have some uniform way of bartering but in the end whatever you use represents the exchange of work. In the past gold (and silver) was the best thing they could come up with because it was hard to come by and thus hard to forge. But lets not stay stuck in the past. In a way cryptocurrencies with built in scarcity have been obsolete from the start because they are based on old ideas.

[David Hess]

Sorry, but that is just conspiracy theorism. The majority of the countries are using fiat money/currency and each of these countries have economists who are in control of such a system. On top of that there are the IMF and EMF (for the EU). Argueing they are wrong is like being Don Quichot chasing windmills.

Whether they change the definition of the words money and currency is irrelevant to their true nature.  Things are classified by their similarities and differences, and they are not the same thing no matter what word is assigned or how the definition of that word is changed.  It is no conspiracy theory, by your definition, that men will confuse the issue to prevent discussion and knowledge.  Anybody could have seen it happen many times over the past couple of years if they were observant enough.

So if you want to discuss money, and want to discuss currency, pick some definitions and stick with them instead of obfuscating the subject for your own interests.  Of course if you do not, then we know what those interests are, so admit it.

[David Hess]

Gold, any many other things, have an objective value.  It costs the same amount to print a 100 dollar bill instead of a 1 dollar bill, or to expand a bank's currency reserves by a billion dollars instead of 1 dollar.

Yes. Two of the main criterions is that it has a cost for extracting it, increasing with the amount extracted, and it's relatively scarce. Bitcoin has the two same properties.
Of course, gold has the benefit of requiring no maintenance once you own it, so it's infinitely more resilient, and it has also been a store of value for thousands of years, so it has like passed the test of time...

Gold is also fungible.  Any gram of gold as as much "gold" as any other gram of gold, and it can be divided and combined as needed.

Update, this only occurred to me later:

You really need to realise that the only commodity that really backs up any form of money/currency is work. Plain and simple.

Work is not a commodity because it is not fungible.  The Soviet Union tried to do this.

[eti]

"Cryptocurrency" lemmings. Wow. How money distorts (un)common sense.
Do they not know that the people who ACTUALLY made lots of money from the gold rush, were the merchants, and people selling the panning equipment, etc? Had all these people "investing" (hah!!) in "BitCoin" had their brains turned on, they'd have invested REAL MONEY in Nvidia and graphics cards! DOH!

[nctnico]

"Cryptocurrency" lemmings. Wow. How money distorts (un)common sense.
Do they not know that the people who ACTUALLY made lots of money from the gold rush, were the merchants, and people selling the panning equipment, etc? Had all these people "investing" (hah!!) in "BitCoin" had their brains turned on, they'd have invested REAL MONEY in Nvidia and graphics cards! DOH!

The share prices of NVidia say you are right!

[pcprogrammer]

"Cryptocurrency" lemmings. Wow. How money distorts (un)common sense.
Do they not know that the people who ACTUALLY made lots of money from the gold rush, were the merchants, and people selling the panning equipment, etc? Had all these people "investing" (hah!!) in "BitCoin" had their brains turned on, they'd have invested REAL MONEY in Nvidia and graphics cards! DOH!

That has some flawed reasoning in it, just like time travel paradoxes. If it was not for the people buying the graphics cards by the millions to do the crypto mining, the shares would not have gone up that much.

And what is REAL MONEY. Company shares are just as virtual as cryptocurrency. Money is a man made concept to make trade easier, and it all went sour when money it self was turned into a product (commodity) and human greed took over to obtain as much of it as possible.

Cryptocurrency is just another way to obtain it, and some people have made "good" money of of it, and others will have lost quite a bit on it. Just as in the stock market.

[SL4P]

It’s all a bit like ‘cloud computing’

Virtualisation is great, but where is your data, and what happens if the cloud server goes away for any reason.

Crypto is great, but where is your investment, and what happens if the repo server goes away for any reason.

It’s looking like religion… blind faith won’t save your soul or life.

[PlainName]

Had all these people "investing" (hah!!) in "BitCoin" had their brains turned on, they'd have invested REAL MONEY in Nvidia and graphics cards!

And lost most of it.

DOH!

That must be you when you checked your nVidia shares today, right?

[SiliconWizard]

Ahah. Meanwhile, I did buy some Bitcoin a few years ago (unfortunately too little, otherwise I'd be rich by now, but I didn't know what to expect). It has had a lot of ups and downs, like with most other cryptos, and with other kinds of investments too anyway, but it has made approx. x20. Let's see how you made that with anything else.

And I'm not talking about moral aspects, or sustainability, or anything else. Just facts. Times 20.

[Someone]

Ahah. Meanwhile, I did buy some Bitcoin a few years ago (unfortunately too little, otherwise I'd be rich by now, but I didn't know what to expect). It has had a lot of ups and downs, like with most other cryptos, and with other kinds of investments too anyway, but it has made approx. x20. Let's see how you made that with anything else.

And I'm not talking about moral aspects, or sustainability, or anything else. Just facts. Times 20.

Semiconductors...  true story 23.5x

[Bud]

It’s all a bit like ‘cloud computing’

Virtualisation is great, but where is your data, and what happens if the cloud server goes away for any reason.

Crypto is great, but where is your investment, and what happens if the repo server goes away for any reason.

What repo server? Cryptocurrencies are decentralized, that is - there is no single server sitting in the boss's basement that may fail. There are thousands of servers all hosting the same copy of the 'repo'. Your investment is in the form of transaction records in those ledgers. Cryptographically signed with your encryption keys. Just do not store your keys on crypto exchanges, which are businesses that are fat targers for hackers and may be run by questionable characters.

[tom66]

Oh please tell me those stupid YT bots that tell you to contact Mrs Samantha Williams on WhatsApp for amazing financial advice are not coming here 

[pcprogrammer]

Navigating through money stress can feel overwhelming, but it's important to remember that there are strategies and tools available to help manage financial worries effectively.

Yeah, buy high and sell low, or no wait was it the other way round. Of course it was, but with the hot air that crypto's represent for most it will boil down to the first option.

Bitcoin went high and now it is falling again.

Best advice is never use money that you can't spare for this kind of bollocks. It is very similar to going to the casino.

But that is my opinion, your mileage may vary.

[Artz]

Navigating through money stress can feel overwhelming, but it's important to remember that there are strategies and tools available to help manage financial worries effectively.

Bitcoin went high and now it is falling again.

Every single bitcoin bullrun has had a 20% drawdown before extending its leg up in a big way.

Those who can't learn from the pattern will sell out for meagre gains or a loss, those who learn it are in for much larger rewards.

[pcprogrammer]

Navigating through money stress can feel overwhelming, but it's important to remember that there are strategies and tools available to help manage financial worries effectively.

Bitcoin went high and now it is falling again.

Every single bitcoin bullrun has had a 20% drawdown before extending its leg up in a big way.

Those who can't learn from the pattern will sell out for meagre gains or a loss, those who learn it are in for much larger rewards.

Until that pattern changes due to something unforeseen and it drops even further, or never goes up again because governmental supervision took over. It is not for nothing that there is a warning for investing that results from the past are no guarantee for the future.